The DDL Capitali Bill and Dematerialisation of LLC Shares
On 27 February 2024, the Italian Senate gave final approval to a bill known as the "DDL Capitali". The law introduces measures to enhance capital competitiveness and empowers the Government to carry out a comprehensive reform of the rules governing capital markets, as set out in Legislative Decree no. 58 of 24 February 1998. The dematerialisation of LLC shares — contained in the "DDL Capitali" — represents a significant step in this direction, offering considerable benefits to both businesses and investors.This process transforms company shares from paper to digital form, simplifying transactions and increasing access to capital for unlisted companies.
Access to Capital Markets
Dematerialisation facilitates investment transactions, making company shares similar to traditional financial securities. Shareholders / quotaholders can now deposit their shares in custody accounts with banks, benefiting from a centralised management and trading process via Euronext Securities Milan. This entity not only ensures smooth circulation of shares but also enhances the security and transparency of transactions.Benefits
The benefits of dematerialising LLC shares are numerous:-
Greater security and transparency: the traceability of dematerialised shares significantly reduces the risks associated with loss, forgery and disputes, ensuring a safer investment environment.
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Reduced bureaucracy and costs: by eliminating the need to handle paper documents, SMEs can benefit from streamlined procedures and reduced costs and time involved in share transactions.
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Increased liquidity and accessibility: shares become more easily tradable, broadening the potential market for investment in SMEs. This increase in liquidity makes companies more attractive to investors, encouraging the inflow of new capital. Once dematerialised, shares can be easily transferred, registered in securities accounts with banks and become eligible for investment services and tax incentives, such as alternative individual savings plans (alternative PIRs).
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Immediate access to information and greater operational efficiency: digital technologies enable investors to access up-to-date information on company performance in real time, improving transparency and supporting more informed investment decisions.
A Regulatory Path Towards Dematerialisation
The dematerialisation of shares in limited liability companies (S.r.l.) marks a turning point for Italian Small and Medium Enterprises (SMEs), representing not only a revolution in how capital is managed but also a bridge to new funding opportunities.
This legal and financial innovation sits at the heart of a series of regulatory and market changes aimed at lowering the barriers between SMEs and access to investment capital.
In recent years, the Italian regulatory environment has indeed sought to bring SMEs closer to the capital markets, gradually overcoming the limitations that have historically held back capital raising for these businesses. Legislative Decree 179/2012, for example, introduced the option for S.r.l. companies to issue shares with standardised nominal value and characteristics, bringing them closer to securities and facilitating their circulation.
This standardisation and tradability of shares marks a fundamental step towards the integration of SMEs into the capital markets.
