Sofia Mercedes Bovoli– Trainee
An important provision that must be taken into consideration when preparing for the transfer of a company, a company branch or, in any case, an operation similar/comparable to the same, is art. 2557 of the Civil Code concerning competition.
Art. 2557 of the Civil Code sanctions, for the specific protection of the purchaser of a company, the prohibition for the transferor, following the completion of the operation, to conduct competitive activities, for a maximum period of five years from the transfer. Therefore, as a natural and automatic effect of the transfer, whoever proceeds to the alienation of a company will have to refrain from starting a new business which, due to its object, location or other circumstances, is likely to divert the customers of the transferred company.
There are two issues that need to be highlighted: on the one hand, the automatic application of the prohibition and, on the other, the extensive force and analogical application of the same.
Analyzing by points:
(a) The automatic application of the prohibition: the prohibition of competition is placed by the legislator as a natural effect of the business transfer, underlying the social economic function of the transaction itself. Therefore, in the silence of the parties, this prohibition will unfold its effects independently of an explicit will in this sense. Consequently, unless otherwise provided for, the prohibition will automatically apply within the limits and under the conditions imposed by the legislator.
However, the parties are allowed to derogate from the non-competition clause either by weakening or strengthening it. First of all, with regard to its duration, it is possible to provide for a duration shorter than the 5 years provided for by the legislator, but never longer, in order to protect the private initiative of the assignor. In addition, the scope of application of the prohibition can be limited from the point of view of object or location and therefore the assignor can be prevented from exercising the activity in competition only in a delimited territory and for specific activities. On the contrary, in a specularly opposite manner, it is possible to envisage limits that extend the effectiveness of the regulatory provision, extending the object of the prohibition to further activities with respect to those already exercised through the transferred company. In any case, any "worsening" derogations imposed on the transferor cannot be such as to effectively prevent him from carrying out of any professional activity.
b) Extensive force and analogical application of the provision: The Supreme Court has, on more than one occasion, reiterated the non-exceptional nature of the prohibition and has, therefore, acknowledged, on several occasions, the analogical application of article 2557 of the Civil Code. Consequently, it seems appropriate to identify the cases and the operations assimilated to the transfer of a company to which it is possible to extend this prohibition.
Doctrine and jurisprudence agree in considering possible the analogical application of the prohibition to all the hypotheses in which, in substance, operations similar and analogous to the transfer of a company or a branch of it are carried out. Jurisprudence has recognized the automatic application of the prohibition also in the case of the transfer of majority shareholdings in a company. Moreover, the violation of this prohibition would take place both in the event that the transferring shareholders set up a new company with the same corporate purpose as the one transferred and in the event that they take on the role of directors in a competing company. The need to protect the transferee is always the same, consider, for example, the possibility of diversion of clients deriving from the taking over of the management of a subject who, being known to the clientele, of which he knows the tendencies and habits, may have a considerable capacity to attract them. Therefore, in order to evaluate the possible analogical application of the provisions of art. 2557 Civil Code, also because of its automatic application, it is necessary to evaluate case by case the underlying will of the parties and the economic result they intend to pursue with a certain operation. In fact, not infrequently, the choice between transferring a company or a shareholding is mainly determined by reasons of fiscal opportunity or limitation of the transferee's responsibilities.
It should be pointed out that violation of the non-competition clause governed by art. 2557 of the Civil Code would entitle the transferee to request
a) termination due to breach of contract.
b) compensation for the damage suffered and incurred as a result of the violation (equal, for example, to the loss of earnings or the reduction in the value of the company due to the diversion of customers);
c) the inhibition, as a precautionary measure, of the illicit conduct pursuant to art. 700 c.p.c..
In conclusion, taking into account the automatic effect of the regulations analyzed here, when we are about to undertake operations that in fact realize a substitution of one subject for another in the running of the company and in the exercise of a given activity, it is necessary, in order to avoid incurring unpleasant surprises, to move accordingly, regulating the application and scope of the prohibition.