REPORTS FOR THE EARLY EMERGENCE OF BUSINESS CRISIS

REPORTS FOR THE EARLY EMERGENCE OF BUSINESS CRISIS

In the previous article, https://bit.ly/3Ixrmd2, we delved into the topic of adequate organizational, administrative and accounting arrangements by virtue of the transposition of the regulations contained in the "Code of Business Crisis and Insolvency," Legislative Decree No. 14/2019, with which Italian companies must comply.

The new Article 3 of the CCII stipulates that the entrepreneur must have appropriate measures and adequate organizational, administrative and accounting arrangements in order to detect a possible state of crisis in a timely manner, according to paragraph 3, letter b, allowing: "...detect the signs referred to in paragraph 4 of the CCII for the timely prediction of the crisis, i.e.

the existence of payroll debts overdue for at least 30 days equal to more than half of the total monthly payroll amount;
the existence of payables to suppliers that have been overdue for at least 90 days in an amount exceeding the amount of payables that are not overdue;
the existence of exposures to banks and other financial intermediaries that have been past due for more than 60 days or that have exceeded the limit of credit facilities obtained in any form for at least 60 days provided that they represent in the aggregate at least 5% of the total exposures
the existence of one or more of the debt exposures provided for in Article 25-novies, paragraph 1 (i.e. to qualified public creditors such as INPS, INAIL, Agenzia delle Entrate-Riscossione)."

REPORTS AND RESPONSIBILITIES

It follows that, the existence of the debt must be reported by the aforementioned creditors to the entrepreneur and to the controlling corporate bodies, where present, with the invitation to take recourse to the Negotiated Crisis Settlement by petition, if the conditions are met.

Accordingly, within the companies, the Board of Directors or the Director has the task of assessing the adequacy of the arrangements of which the company is constituted, pursuant to Article 2381 of the Civil Code, Paragraph 3, while the Board of Statutory Auditors is entrusted with the role of controlling the adequacy of the arrangements constituted, as well as their functioning, as indicated in Article 2403 of the Civil Code, Paragraph 1.

In detail, considering Article 25-octies of the CCII, under the heading "reporting by the control body," it is noted that:

the corporate control body shall report, in writing, to the administrative body the existence of the prerequisites for the submission of the application to join the Negotiated Settlement; this report must be justified and transmitted by means that ensure proof of receipt, containing the establishment of an appropriate deadline, not exceeding 30 days, within which the administrative body must report on the initiatives taken;
timely reporting to the administrative body and supervision of the progress of negotiations are assessed for the purposes of the liability provided for in Article 2407 of the Civil Code.

Therefore, the auditors would be jointly and severally liable with the directors for any omissions or actions taken by the latter, especially when the damage detected would not have been so if they had supervised in accordance with the obligations inherent to their office.

Article 25-novies of the CCII, on the other hand, goes on to consider the reports of qualified public creditors, which are crucial for the supervisory body in determining whether or not the prerequisites for filing a Negotiated Settlement petition are met, especially:

for INPS, a delay of more than 90 days in the payment of social security contributions in an amount exceeding
- to 30 percent of the amount due in the previous year and the value of € 15,000, in the case of enterprises with employees and parasubordinate workers
- to € 5,000, in the case of enterprises without employees and para-subordinate workers;
for INAIL, the delay of more than 90 days in the payment of unpaid insurance premiums amounting to more than €5,000;
for the Internal Revenue Service, the existence of a VAT debt overdue, resulting from periodic settlements, and unpaid for an amount greater than € 5,000, an amount in any case not less than 10% of the turnover resulting from the declaration for the previous tax year. It is specified that the creditor's report must in any case be sent to the company if the debt was more than € 20,000;
for the Agenzia delle Entrate-Riscossione, the existence of credits entrusted for collection, self-declared or definitively assessed and overdue for more than 90 days, exceeding
- to the amount of € 100,000 for sole proprietorships,
- to the amount of € 200,000 for partnerships,
- to the amount of € 500,000 for other companies.

Regarding VAT debt, it is pointed out that it should be reported by the Internal Revenue Service when simultaneously:

the overdue debt is in excess of € 5,000,
the overdue debt is in excess of 10% of the amount of turnover resulting from the declaration for the previous tax year.

However, since the rule requires sending the report whenever the debt exceeds €20,000 it is necessary to verify this amount in the first instance and:

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