Tax Observatory › Companies, accounts and reorganisations › Srl above the thresholds of Article 2477 of the Civil Code: when to appoint a supervisory body or an auditor, and what happens if the company fails to do so

Srl above the thresholds of Article 2477 of the Civil Code: when to appoint a supervisory body or an auditor, and what happens if the company fails to do so

Where an srl (Italian limited liability company) exceeds one of the limits of Article 2477 of the Civil Code for two consecutive financial years, it must appoint a supervisory body (organo di controllo) or an auditor (revisore legale) within thirty days of the shareholders’ meeting that approves the financial statements. This note covers when the obligation arises, the choice of body, remuneration, inaction by the shareholders and the report under Article 25-octies of the Codice della crisi d’impresa (CCII, Italian Code of Business Crisis and Insolvency). It reflects the rules as they stand after Legislative Decree No. 47/2026.

An srl (società a responsabilità limitata, Italian limited liability company) must appoint a supervisory body (organo di controllo) or an auditor (revisore legale) in three cases: where it is required to prepare consolidated financial statements; where it controls a company that is subject to statutory audit; or where, for two consecutive financial years, it exceeds at least one of the limits set by Article 2477, second paragraph, of the Civil Code. Those limits are total assets of EUR 4 million, revenue from sales and services of EUR 4 million, and an average of 20 employees during the year. The shareholders’ meeting that approves the financial statements showing that the limits have been exceeded must make the appointment within thirty days of approving them; if it fails to do so, the court makes the appointment.

The thresholds and when the obligation arises

The values are those introduced by Article 2-bis of Decree-Law No. 32 of 18 April 2019, converted into law by Law No. 55 of 14 June 2019. The text of Article 2477 applicable on 13 November 2026 is the one that has been in force since 18 June 2019: neither Legislative Decree No. 125 of 6 September 2024 nor Legislative Decree No. 47 of 27 March 2026 has amended it.

A company need only exceed one of the limits in each of the two consecutive financial years; in our view, it does not have to be the same limit. The fifth paragraph links the obligation to the meeting “that approves the financial statements in which the limits are exceeded”. Since the requirement is fully met only in the second financial year, in our view it is the meeting approving those financial statements that must make the appointment. For example, if revenue exceeds EUR 4 million in 2024 and in 2025 and the 2025 financial statements are approved on 29 April 2026, the shareholders must resolve on the appointment by 29 May 2026.

Exceeding the limits in a single financial year triggers no obligation, but it means that the following financial year must be monitored: if a limit, even a different one, is exceeded in that year, the appointment must be made when its financial statements are approved. The obligation based on the thresholds (Article 2477, second paragraph, letter (c)) ceases when no limit is exceeded for three consecutive financial years. Article 20, paragraph 8, of Decree-Law No. 91 of 24 June 2014 treats the fact that the obligation no longer applies as just cause for removal. The provision was introduced when the obligation linked to the amount of the company’s capital was abolished in 2014, but in our view it also applies to the cessation provided for in the third paragraph of Article 2477. For a sindaco (member of the supervisory body), the resolution removing him or her takes effect only once it has been approved by a decree of the court, after the person concerned has been heard (Article 2400, second paragraph, referred to by Article 2477, fourth paragraph). For the auditor, the shareholders’ meeting resolves on removal after hearing the supervisory body, if one has been appointed (Article 13, paragraph 3, of Legislative Decree No. 39 of 27 January 2010).

The deadline for adapting the deed of incorporation (Article 379, paragraph 3, of Legislative Decree No. 14/2019) was transitional and has expired. If the articles of association are silent, the supervisory body consists of a single standing member (Article 2477, first paragraph).

Sindaco unico, board of statutory auditors or auditor

Where a supervisory body is appointed, even a single-member one, the rules on the board of statutory auditors (collegio sindacale) of the società per azioni (spa, joint-stock company) apply (Article 2477, fourth paragraph). Since 29 April 2026, supervision has been governed by Article 2396-quinquies of the Civil Code (Legislative Decree No. 47/2026), which in our view applies to the srl by virtue of the cross-reference in Article 2477, fourth paragraph. It covers compliance with the law and the articles of association, sound administration, and the adequacy and actual functioning of the organisational, administrative and accounting arrangements. The body meets at least every ninety days (Article 2396-octies) and records its proceedings in the book of decisions of the board of statutory auditors (Article 2478, point 4).

Article 2397, second paragraph, requires at least one standing member and one alternate member to be registered auditors (revisori legali iscritti); in our view, the sindaco unico (sole member of the supervisory body) must therefore be a registered auditor. The articles of association of a company that is not required to prepare consolidated financial statements may entrust the statutory audit to the supervisory body, which in that case must consist of registered auditors (Article 2409-bis, second paragraph). Alternatively, the srl may appoint an auditor or an audit firm entered in the register. The auditor issues an opinion on the financial statements and checks during the financial year that the accounts are properly kept (Article 14, paragraph 1, of Legislative Decree No. 39/2010), but has no supervisory role over the organisational arrangements, which Article 2396-quinquies of the Civil Code entrusts to the supervisory body. The differences in function are explained in the note on statutory audit and the board of statutory auditors.

Term of office, remuneration and registration

The sindaci hold office for three financial years, and their term expires on the date of the shareholders’ meeting called to approve the financial statements for the third financial year (Article 2400, first paragraph). Their annual remuneration, if not fixed in the articles of association, is set by the shareholders’ meeting at the time of appointment for the entire three-year term (Article 2402). Before accepting, the candidates disclose to the meeting the positions they hold in other companies. The directors register the appointment in the Business Register within thirty days (Article 2400, third and fourth paragraphs); failure to register exposes them to the administrative fine under Article 2630 of the Civil Code.

Under Article 13, paragraphs 1 and 2, of Legislative Decree No. 39/2010, the shareholders’ meeting confers the engagement on the auditor on a reasoned proposal from the supervisory body (if one has been appointed) and sets the fee for the entire three-year term and any criteria for adjusting it. The fee must be commensurate with the resources and hours required (Article 10, paragraph 10). Removal requires just cause, and the resolution is passed after hearing the supervisory body, if one has been appointed (Article 13, paragraph 3).

If the shareholders’ meeting fails to act

The appointment is then made by the court, at the request of any interested party or on a report from the registrar of the Business Register, the conservatore del registro delle imprese (Article 2477, fifth paragraph). The registrar reports, but neither makes the appointment nor imposes fines. If the meeting, once called, does not pass a resolution, the directors themselves may apply to the court for the appointment. Article 2631 of the Civil Code imposes an administrative fine of EUR 1,032 to EUR 6,197 on directors who fail to call the shareholders’ meeting in the cases provided for by law. In our view, it is doubtful whether the fine applies to directors who fail to put the appointment on the agenda of a meeting that has in any case been called, because the provision penalises the failure to call the meeting. The directors remain liable to the company under Article 2476, first paragraph, read in the light of the duty to establish adequate organisational arrangements under Article 2086, second paragraph.

The last paragraph of Article 2477 still refers to Article 2409, which was repealed by Legislative Decree No. 47/2026. The complaint to the court for serious irregularities is now governed by Article 2396-quater, and the two provisions will have to be reconciled by interpretation.

The report under Article 25-octies CCII

Since 28 September 2024 (Legislative Decree No. 136 of 13 September 2024), both the supervisory body and the person entrusted with the statutory audit have been required to report in writing to the management body that the conditions set out in Article 2, paragraph 1, letters (a) and (b), of the CCII are met, for the purposes of filing an application for composizione negoziata (negotiated settlement of the crisis). The provision still refers to the supervisory duty under Article 2403 of the Civil Code, which Legislative Decree No. 47/2026 has reworded. The report must state its reasons, be sent by a means that provides proof of receipt and set a deadline of no more than thirty days for the management body to report on the measures taken. Timely reporting and supervision of the negotiations are taken into account to mitigate or exclude the liability of the sindaco or the auditor; the report is in any case timely if it is made within sixty days of its author becoming aware of the state of crisis.

In practice

• Directors, for each set of financial statements: check the three parameters and record them in the minutes of the meeting approving the financial statements.
• Shareholders, at the meeting approving the financial statements for the second financial year or within thirty days: resolve on the appointment and on remuneration for the three-year term, together with the acceptance of office and the list of other positions held.
• Directors, within thirty days: register the appointment in the Business Register; keep the financial statements, the minutes, the acceptance and the engagement letter.
• Directors of an srl that exceeded the limits in 2024 and 2025 and has not made the appointment: call a shareholders’ meeting immediately with the appointment on the agenda, without waiting for the 2026 financial statements; once the thirty days have passed, any interested party, or the registrar, may apply to the court.
• Management body, on receiving a report under Article 25-octies: resolve on the measures and record them in the minutes within the deadline set.
• Companies whose articles of association predate 29 April 2026: check the clauses that refer to Articles 2403 and 2409 of the Civil Code, which have since been reworded and repealed respectively.

Frequently asked questions

Does an srl that exceeds the limits in only one financial year have to appoint a sindaco?

No. Two consecutive financial years are required; exceeding the limits in a single year only means that the following year must be monitored.

Can the company appoint only an auditor?

Yes. The auditor audits the financial statements and the accounts and remains subject to the reporting duty under Article 25-octies CCII, but does not supervise the organisational arrangements; that task belongs to the supervisory body.

When can the company do without a body already appointed?

When no limit is exceeded for three consecutive financial years. In our view, the fact that the obligation no longer applies is just cause for removal, but the removal of a sindaco takes effect only once approved by the court (Article 2400, second paragraph); the shareholders’ meeting resolves on the removal of the auditor. Alternatively, the company may let the three-year term expire without renewing the appointment.

Sources

Civil Code, Articles 2086, 2396-quater, 2396-quinquies, 2396-octies, 2397, 2400, 2402, 2403, 2409, 2409-bis, 2476, 2477, 2478, 2630 and 2631, text in force on 13 November 2026

Article 2-bis of Decree-Law No. 32 of 18 April 2019, converted into law by Law No. 55 of 14 June 2019

Article 20, paragraph 8, of Decree-Law No. 91 of 24 June 2014, converted into law by Law No. 116 of 11 August 2014

Articles 2, 25-octies and 379 of Legislative Decree No. 14 of 12 January 2019 (CCII)

Article 7 of Legislative Decree No. 136 of 13 September 2024

Articles 10, 13 and 14 of Legislative Decree No. 39 of 27 January 2010

Article 9 of Legislative Decree No. 47 of 27 March 2026 (Official Gazette No. 86 of 14 April 2026, Ordinary Supplement No. 14), implementing Article 19 of Law No. 21 of 5 March 2024