The società benefit (Italian benefit company): a status, not a new type of company

The pursuit of a common benefit sits alongside the profit motive, with precise governance and reporting duties. Here is what really changes for the articles of association, the directors and the accounts.

Introduced by law no. 208 of 28 December 2015 (paragraphs 376 to 384), the società benefit made Italy the first European country with a comprehensive set of rules modelled on the United States benefit corporation. The status is not a new type of company: it is an additional qualification which the companies covered by Book V, Titles V and VI, of the Italian civil code — partnerships, companies with share capital, cooperatives and mutual insurance companies — may take on while remaining fully profit-making (paragraph 377).

What sets a società benefit apart

Beyond the aim of distributing profits, a società benefit pursues one or more common benefit purposes, operating responsibly, sustainably and transparently towards people, communities, territories and the environment. It is a commitment written into the objects clause, and it binds the way the company is run.

The common benefit purpose is not a mere form of words: the law requires it to be stated specifically in the objects clause (paragraph 377). A società benefit that does not pursue its common benefit purposes is subject to the provisions on misleading advertising (d.lgs. no. 145 of 2 August 2007) and to the consumer code (d.lgs. no. 206 of 6 September 2005); the related tasks are carried out by the Autorità garante della concorrenza e del mercato, the Italian competition and market authority (paragraph 384).

For a company already in existence, taking on the status requires an amendment to the instrument of incorporation or to the articles of association, made in accordance with the provisions governing amendments that are proper to each type of company; the amendments are filed, registered and published under arts. 2252, 2300 and 2436 of the civil code. Adding the words “Società benefit” or the abbreviation “SB” alongside the company name is, by contrast, optional (paragraph 379).

Società benefit, impresa sociale and B Corp: three different things

The three are often confused. The impresa sociale (d.lgs. 112/2017) is a third-sector entity subject to restrictions on how profits may be used; the società benefit, by contrast, remains an ordinary company free to distribute its profits. B Corp certification is a private standard awarded by B Lab and carries no legal force: a company can be a società benefit without being a B Corp, and the other way round.

Governance and directors’ liability

Paragraph 380 requires the company to be managed by balancing the members’ interest, the pursuit of the common benefit purposes and the interests of the categories identified in paragraph 376, in accordance with the provisions of the articles of association. That balancing becomes a statutory management criterion and must be actively overseen:

• Impact officer — appointing the person charged with pursuing the common benefit is mandatory; failing to do so counts as a breach of the rules.
• Management liability — failure to observe the obligations under paragraph 380 may amount to a breach of the duties imposed on directors by law and by the articles of association, and the liability rules proper to each type of company then apply: art. 2260 of the civil code for partnerships, arts. 2392 ff. for the s.p.a. and art. 2476 for the s.r.l. (paragraph 381).

The annual impact report

This is the central requirement, and the one most often overlooked: paragraph 382 requires an annual report on the pursuit of the common benefit, to be attached to the financial statements, describing the objectives and the actions taken, the assessment of the impact generated and the new objectives for the following financial year. The standard cannot be freely chosen: the assessment must be carried out using an external evaluation standard which necessarily applies the methods and criteria of annex 4 to the law and covers the areas of assessment identified in annex 5 (paragraph 378, letters c and d). The report must also be published on the company’s website, if it has one; certain financial data may be omitted in order to protect the beneficiaries (paragraph 383).