Content developed with the assistance of AI tools and reviewed by the author.
Why Australian-owned Italian subsidiaries face voidable resolutions — and what to fix before your next due diligence
Your Italian subsidiary holds a board meeting next month. The directors join by video call from Sydney, Melbourne, and Milan. The resolution is signed. A contract is executed. Then, eighteen months later, a buyer's due diligence team or an Italian tax inspector asks a simple question: does your statuto — the company's constitution — actually allow remote participation? If it does not, every resolution passed remotely may be voidable. The contract downstream of it sits on sand.
This is not a theoretical risk. It is the most common governance defect Panato Law Firm encounters in Australian-owned Italian limited liability companies, the società a responsabilità limitata (SRL). The fix is achievable in four to eight weeks. Left unaddressed, it compounds with every meeting.
Yes — but only if the company's governing document expressly says so. Under Article 2479 of the Italian Civil Code (codice civile), the rules on shareholders' meetings of an SRL can permit remote participation, but the permission must appear in the statuto itself. For directors' meetings, the same principle applies by analogy, as confirmed by established notarial practice and by the guidelines of the National Council of Notaries (Consiglio Nazionale del Notariato, study no. 5-2020). A clause that is silent on the point confers no authority. Silence is prohibition.
Every subsidiary incorporated in Italy before 2020 — and many updated since — carries a statuto drafted when physical attendance was the default. The pandemic normalised video meetings as a matter of practice. The law never followed automatically. The result is a generation of Italian SRL subsidiaries whose directors have been passing resolutions remotely on the assumption that accepted practice amounts to legal authority. It does not.
A resolution adopted without valid authorisation in the statuto is annullabile — voidable — under Article 2379 of the Italian Civil Code. Any interested party can challenge it within ninety days. A successful challenge unwinds the resolution and everything that flows from it.
Under the Corporations Act 2001 (Cth), an Australian company may hold a directors' meeting by any technology that allows directors to communicate, without any special provision in its constitution (section 248D). The default rule permits remote participation unless the constitution restricts it. Italy works in the opposite direction: the default rule prohibits remote participation unless the statuto expressly permits it.
This reversal surprises most Australian in-house counsel. They review the meeting mechanics against the Corporations Act framework and find no problem. They then assume the Italian subsidiary follows a similar logic. It does not. The Italian Civil Code is a civil-law codification: it prescribes what is permitted, not merely what is restricted. A company constitution that is silent on video conferencing offers no foundation for a valid remote resolution.
The fix requires a notarised amendment to the statuto, filed with the Registro delle Imprese — the Italian Companies Register, broadly equivalent to ASIC's companies register — by means of a notarial deed of amendment. Until the amendment is registered, remote resolutions remain at risk. Budget approximately €1,500 to €2,500 for the notarial deed and registration fees, depending on the complexity of the statuto and the notary's tariff.
A procura notarile is a notarised power of attorney that formally delegates corporate-signing authority from the company — or from a director who cannot be present in Italy — to a local representative. It is the instrument an Australian parent uses when no director is physically available to sign contracts, open bank accounts, execute tax filings, or appear before a notary in Italy.
Nemo plus iuris ad alium transferre potest quam ipse habet — no one can transfer to another more authority than they themselves possess. This Roman maxim governs every Italian power of attorney: the scope of delegation is strictly bounded by the authorising company resolution. If the underlying resolution is voidable because the meeting that adopted it lacked a valid statuto clause, the procura notarile built on that resolution inherits the same defect.
Italian tax authority inspectors and opposing counsel in litigation know this chain. They work backwards from the document to the resolution to the statuto. In transfer-pricing assessments — which the Agenzia delle Entrate, Italy's revenue authority, conducts on intra-group transactions — the formal validity of board resolutions approving transfer-pricing policies is scrutinised directly. An invalid resolution does not simply embarrass the company; it can be used to challenge the binding nature of the intra-group arrangement itself.
Yes, in most cases involving corporate authority. Where an Italian act requires a notarial deed — purchasing real property, amending a statuto, granting certain banking mandates — the power of attorney authorising someone to act on behalf of the company must itself be notarised to the same standard. A simple board resolution signed by a director in Sydney is not sufficient for acts before an Italian notary.
When the power of attorney is executed in Australia, two additional steps are mandatory before an Italian notary will rely on it. First, the document must carry an apostille issued under the Hague Convention of 5 October 1961. In Australia, apostilles for corporate documents are issued by the Department of Foreign Affairs and Trade (DFAT) or, depending on the document type, by the relevant state or territory authority. Second, the document must be accompanied by a sworn translation into Italian, prepared by a certified translator. The Italian notary examines both the apostille and the sworn translation before proceeding. Without either, the document is inadmissible in the notarial act.
The sequencing of apostille and sworn translation adds ten to twenty working days to any transaction timeline where the signatory is based in Australia. Companies that have not built this lead time into deal schedules miss completion dates.
A foreign director can vote remotely if — and only if — the company's statuto expressly authorises it and the meeting is conducted in compliance with the conditions the statuto sets out. Typical requirements include the ability of all participants to see and hear one another simultaneously and a mechanism for verifying identity. The meeting minutes must record that these conditions were met; a bare notation that the meeting was held "by videoconference" without procedural detail is inadequate.
Where a director cannot attend even remotely, or where the company's statuto does not permit remote voting, the alternative is a procura notarile granting a local representative authority to vote on behalf of the absent director. This is the instrument most commonly mishandled in Australian-Italian structures.
This is the point competitor articles do not make. The most frequent and most damaging mistake in Australian-owned Italian subsidiaries is not the absence of a power of attorney. It is the timing of it.
The sequence typically runs like this. The Sydney board passes a resolution authorising a local Italian manager to sign a contract. The manager signs. A few weeks later, the company's Italian adviser prepares a procura notarile to formalise the authority retrospectively. The procura is executed, apostilled in Australia via DFAT, sworn-translated, and delivered to the Italian notary. The Italian notary declines to rely on it as authority for the act already done, because under Italian law a power of attorney must pre-date the act it authorises. Retrospective ratification of a notarial act by a subsequent procura is not a mechanism that Italian notarial practice recognises in the same way common law ratification operates.
The consequence is that the act — the contract, the mortgage, the amendment — was signed by a person without formally documented authority at the time. It may be valid as between the parties if the counterparty acted in good faith under Article 1398 of the Italian Civil Code. But it creates a gap in the corporate-authority chain that appears in every subsequent due diligence report and must be remedied by a corrective notarial act, at additional cost.
In our files, the most common version of this error arises when an Australian parent closes a deal quickly and instructs the local Italian manager to sign first and "sort out the paperwork afterwards." Italian notarial practice does not accommodate that approach. Authority must exist before the signature, not after it.
The correct sequence for any corporate act requiring a notarial deed in Italy is: (1) verify the statuto permits the corporate decision to be made remotely; (2) adopt a valid resolution; (3) execute the procura notarile in Australia, apostille it through DFAT, and obtain a sworn Italian translation; (4) deliver the complete set to the Italian notary before the act is executed; and only then (5) sign.
A statuto amendment to introduce a remote-meeting clause requires a notarial deed in Italy. Typical all-in cost, including notarial fees and Registro delle Imprese registration, runs between €1,500 and €2,500 for a standard SRL. Registration of the amendment with the Companies Register takes approximately five to ten working days once the notarial deed is executed. Until registration is complete, the old statuto governs.
A procura notarile executed in Australia adds the apostille process (allow five to fifteen working days through DFAT or the relevant state authority) plus three to seven working days for a sworn Italian translation. The full cycle from instruction to a valid procura in the hands of an Italian notary is realistically four to six weeks if all parties move promptly. Factor this into any transaction timeline with a fixed completion date.
The American economist and jurist Guido Calabresi observed that legal rules impose costs in two directions: the cost of compliance and the cost of non-compliance. For Australian companies managing Italian subsidiaries remotely, the cost of bringing the statuto into order is modest and finite. The cost of a voidable resolution discovered during a €10 million acquisition due diligence is neither.
The practical next step is not to send an email to your local Italian manager asking whether the statuto is up to date. Retrieve the current registered statuto from the Italian Companies Register — it is publicly available — and have it reviewed against Articles 2370 and 2479 of the Italian Civil Code before the next scheduled meeting. If it is silent on remote participation, no remote resolution passed since incorporation is on solid ground.
Our Italian SRL was incorporated in 2018 and has held video board meetings since 2020. Are all those resolutions void?
Voidable rather than automatically void — there is a distinction in Italian law. Under Article 2379 of the Italian Civil Code, a challenge must be brought within ninety days of the resolution. Resolutions older than ninety days that have not been challenged are unlikely to be successfully attacked today. The risk is concentrated in resolutions passed recently and in any resolution that a counterparty, a tax inspector, or a future buyer has a current interest in challenging. The forward-looking fix is a statuto amendment; a review of recent resolutions is also advisable.
Can we use an Australian-law power of attorney for acts before an Italian notary, or does it need to be Italian?
An Australian-law power of attorney can be used in Italy, but only after apostille under the Hague Convention 1961 (to which Australia acceded) and sworn translation into Italian. The document must grant authority that is at least as broad as the act the Italian notary is being asked to execute. The Italian notary will examine the original apostilled document and the sworn translation; a certified copy is generally not sufficient. Allow four to six weeks from instruction to a document ready for use.
If a director is based in Australia and cannot travel, can they ever validly authorise a corporate act in Italy?
Yes. There are two routes. First, if the statuto authorises remote participation, the director can attend the relevant meeting electronically and vote, with the minutes recording the technical conditions met. Second, the director can execute a procura notarile in Australia — apostilled and sworn-translated — that grants a named Italian representative authority to act. The procura must be in the hands of the Italian notary before the act is executed, not afterwards. Both routes are valid; the choice depends on whether the act is a recurring corporate decision or a one-off notarial transaction.
HREFLANG BLOCK:
Editorial Team — Panato Law Firm Staff
