Corporate Law, Enhanced Voting Shares, Stable Shareholders
European law is moving towards plural voting
The “stable shareholders”: multiple voting and increased voting
The issue of enhanced voting shares is constantly evolving in Europe between competing jurisdictions.
The dual structure introduced in Italy in 2014 for listed and unlisted spas is confirmed with the “Capital Law” of 2024, which increases the number of votes achievable with a single share or with its prolonged ownership.
But many problems that have already arisen remain unchanged and others are added: here are some hypotheses for regulatory improvement that take into account the most recent studies and the proposals present in the Listing Act Package.
Passim
The innovations arrived with the law of 5 March 2024, n. 21
How does law no. operate? 21/2024 to encourage growth by intervening on multiple voting? Here I limit myself to considering only the main innovations, as there is no space here for a detailed analysis of the regulations resulting from the changes that have occurred.
A) The first innovation consists in the modification of the art. 2351, paragraph 4, c.c. to increase the maximum multiple vote threshold from three to ten votes: this conforms to the practice encouraged by the main competing systems; and nothing else is added.
Consequently, the threshold potentially necessary to acquire legal control of the company through multiple voting shares decreases: from just over 25% to just over 9% of the share capital. And this is on the assumption that all other shares have a vote in the resolutions relevant to control.
But no provision previously and now prevents multiple voting shares and non-voting shares from being placed on the gaming table at the same time for relevant resolutions regarding control.
Therefore, if – respecting the legal limit – half of the shares issued did not give the right to vote for such resolutions, they would be sufficient to give control by right of multiple voting shares in the maximum allowed amounting to approximately 4.6% of the share capital. .
It is well known that the combination of power/risk – and with it every principle of proportionality not limited by default rule – in corporate law has been broken for some time.
If in s.r.l. the content of the particular right that gives control is not in the least correlated to the amount of the investment (of the owner of the right compared to that of the other shareholders), it is not surprising that this also happens in joint stock companies. closed, increasingly closer to the first species in the wide world of SMEs.
However, it is a question of deciding whether this disinterest is justified even when the joint stock company begins with listing on first growth and then regulated markets, especially if no legal limits are imposed on the use of the instrument: an absence of limits which currently remains also for joint stock companies. which are listed on regulated markets maintaining the multiple vote connected to shares already issued; in fact, on this point the provision which already allowed it remained unchanged.
Future prospects and the task of the legislator
It is legitimate and appropriate to ask ourselves what further developments the regulatory framework could have, taking into account both the regulatory pressures coming from the now imminent production of EU legislation and the delegation, included in the art. 19, law n. 21/2024, for the organic reform of the provisions on capital markets contained in the T.U.F. and those relating to joint-stock companies contained in the civil code also applicable to issuing companies.
As has been mentioned, European law, in the aforementioned proposal for a directive, moves towards multiple voting, which is already available to our SMEs that list on growth markets; but it will be necessary to comply with the required limitations, currently mostly absent, listed below.
The mandatory limitations include: i) the determination of strengthened majorities in the general meeting which decides on the introduction of multiple voting, with approval by the special meetings where there are multiple categories of shares; ii) in addition to a maximum limit of votes that can be attributed per share, the indication of the maximum percentage of the share capital that the multiple voting shares can represent: and here the reflection should lead to questioning and deciding once and for all what is best – in those listed on regulated and growth markets – the minimum share of risk capital that those who legally control must have and maintain; iii) the definition of restrictions (not specified) in matters in which the assembly should decide with qualified majorities. The optional limitations include: iv) the extinction of multiple voting rights in the event of a transfer of shares; v) the extinction of multiple voting rights after a certain period of time or upon the occurrence of certain events; vi) the suspension of multiple voting in relation to shareholders’ resolutions on ESG-relevant issues (resolutions aimed at preventing, reducing or eliminating “negative impacts” of corporate operations on human rights and the environment). The opportunity could, therefore, be propitious to provide for multiple voting, with appropriate limits, also for companies that are listed or are already listed on regulated markets.
Source Company Law Journal
Giuseppe A. Rescio
