Can a third party non-shareholder be a director of a simple partnership under Italian law?

The focus of the case dealt by the Roman Civil Court (Tribunale Roma, 25 agosto 2021, n. 4971) was the appointment of a third-party non-partner as the director of an Italian simple partnership, specifically, the director of the two parent companies of the partnership. The Court allowed the appointment for two key reasons:

• Firstly, the law permits joint-stock companies or limited liability companies to own shares in simple partnerships. Therefore, it is evident that the parent company, as a shareholder of the simple partnership, cannot act as its director, but must instead appoint either one of its directors or a third party as the director.
• Secondly, the judges compared the regulations of different types of companies under Italian law and highlighted that only some companies have an explicit prohibition on appointing a non-shareholder as a director. The court inferred that it is permissible to appoint a third-party non-shareholder as the director of a simple partnership, given the absence of any explicit prohibition in the law. This ruling provides interesting insights into the managing body configuration of a company, particularly with respect to the participation of corporations in partnerships.

Next steps

The aforementioned ruling affirms the interpretation previously upheld by the Italian Supreme Court, thereby validating the appointment of non-shareholders as directors. This approach also establishes that the relationship between the directors of the partnership is contractual and not necessarily tied to the role of the shareholder, which means that a shareholder can choose not to be a director. However, all shareholders of a simple partnership still have unlimited liability for the partnership's obligations.

Check here to read more (in the Italian language).

Authored by Pierluigi Feliciani.