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

The pursuit of common benefit sits alongside the profit-making purpose, with specific governance and reporting obligations. Here is what really changes for the articles of association, the directors and the financial statements.

Introduced by legge 28 dicembre 2015, n. 208 (paragraphs 376 to 384), the società benefit (Italian benefit company) made Italy the first European country to adopt a comprehensive set of rules modelled on the United States benefit corporation. The status does not create a new type of company: it is an additional qualification that any company governed by Book V of the Italian Civil Code may take on, while remaining fully profit-making.

What sets a società benefit apart

In addition to the purpose of distributing profits, the società benefit pursues one or more common-benefit purposes, operating in a responsible, sustainable and transparent manner towards people, communities, territories and the environment. It is a commitment that enters the corporate purpose and binds management.

The common-benefit purpose is not a stylistic formula: the law requires it to be stated specifically in the corporate purpose. Generic clauses expose the company to challenges at the registration stage and on grounds of misleading advertising.

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

Confusion is common. Theimpresa sociale (social enterprise) (Legislative Decree 112/2017) is a Third Sector entity subject to restrictions on the allocation of profits; the società benefit, by contrast, remains an ordinary company that distributes its profits freely. The B Corp certification is a private standard issued by B Lab with no legal force: a company may be a società benefit without being a B Corp, and vice versa.

Governance and directors’ liability

Paragraph 380 requires the company to be managed by balancing the interests of the shareholders, the pursuit of the common benefit and the interests of the other stakeholders. The balancing exercise becomes a legal management criterion and must be actively overseen:

• Impact manager — the appointment of the person entrusted with the functions of pursuing the common benefit is mandatory; failure to appoint one counts as non-compliance with the rules.
• Management liability — failure to comply with the obligations may amount to a breach of the directors’ duties (Articles 2392 et seq. and 2476 of the Italian Civil Code), with a tangible widening of the scope of liability.

The annual impact report

This is the central obligation and the one most often overlooked: paragraph 382 requires the company to draw up each year a report on the pursuit of the common benefit, to be attached to the financial statements, describing the objectives, the actions taken, the impact assessment carried out against an external standard and the objectives for the following financial year.