Social Enterprises and Benefit Corporations in Italy

Abstract

Italy has been the first country in the world to adopt the US benefit corporation model (so-called società benefit (SB)), which it transplanted into its legal system at the end of 2015. The Italian società benefit statute is a mix between the US Model Benefit Corporation Legislation and the Delaware Public Benefit Corporation Act but is characterized by some peculiar features, such as the scope of the legislation, which is applicable to all for-profit and cooperative organizational forms provided by the law, and the existence of a public enforcement mechanism based on the attribution of supervisory powers to the Italian Competition Authority. A few years after its introduction, società benefit seems to have been widely accepted, and the movement continues to grow. Furthermore, the Italian legal system continues to support the spread of the SB model, e.g., through the 2019 amendment of the “Public Contract Code,” which introduced new reward criteria for tendering companies that publish the annual report required by the società benefit law to assess their social and environmental impacts. From a comparative law perspective, the Italian “for-benefit” model has been the first one adopted by a civil law system and seems to have influenced other civil law countries.

This publication is one of the results of the R&D&I project UAL2020-SEJ-C2085, under the European Regional Development Fund (ERDF) Andalusia 2014-2020 operational program, entitled “Corporate social innovation from Law and Economics”. On the 8th of June 2022, during the public conference “Social Entrepreneurship and Philanthropy – Mobilizing resources for the public good” organized by the Geneva Centre for Philanthropy in collaboration with the Schwab Foundation for Social Entrepreneurship, this publication was awarded the "Fondation Lombard Odier Prize for Academic Excellence in Philanthropy" in the “Status of purpose-driven companies in a particular national context” category.

1 An Introduction to the Italian Benefit Corporation

The new capitalist paradigm embodied by the benefit corporation movement is not something completely new for Italy; on the contrary, it is deeply rooted in a traditional Italian line of economic thought—the so-called civil economy¹—based on the civic humanism of the thirteenth and fourteenth centuries and developed through the Italian Enlightenment philosophy in the eighteenth century by both the Milanese² and Neapolitan³ schools.⁴

Furthermore, the Italian entrepreneurial environment has experienced business models close to that of the benefit corporation long before its birth. Among many, examples are the stakeholder approach of the Olivetti group carried out from 1943 to 1960⁵ or the humanistic enterprise business model of Brunello Cucinelli’s luxury fashion brand funded in 1978.⁶

It is therefore not surprising that Italy has been the first country in the world to adopt the US benefit corporation model (so-called società benefit), which it transplanted into its legal system at the end of 2015, effective since January 1, 2016.

The legal transplant⁷ was preceded by the development of the B Corp certification movement, sponsored by B Lab. Nativa s.r.l., a sustainability consultancy company, ⁸ has been, since February 2013, the first certified B Corp in Italy (and, together with other four companies,⁹ the first to register as a società benefit on February 26, 2016). Since then, it has become the country partner of B Lab in Italy and has been a key actor in introducing the benefit corporation law. ¹⁰

Società benefit (SB) were introduced in Italy with the 2016 “Stability Law”,¹¹ which incorporated the parliamentary initiative bill on “Disposizioni per la diffusione di società che perseguono il duplice scopo di lucro e di beneficio comune”.¹²

2 The Benefit Corporation Phenomenon in Italy: Some Data

Data show that at the beginning of 2022, in Italy, there were over 120 certified B Corps. ¹³ As for the number of società benefit, it is not possible to have complete information, given that, according to law, it is not mandatory to use the denomination società benefit or the abbreviation SB next to the company name registered with the Italian Company’s Register Office, and there is not a special section in the register exclusively dedicated to società benefit. However, as of September 30, 2021, there were 1344 società benefit registered with such name in the national Company’s Register. ¹⁴

Studies carried out between 2019 and 2021 reveal that as far as their organizational structure is concerned, the majority of SB are organized as società a responsabilità limitata (i.e., limited liability company). ¹⁵ Among the società benefit registered in the national Company’s Register as of September 2021, over 9% were società per azioni (i.e., corporation), while about 87% were società a responsabilità limitata. ¹⁶ The others were cooperative companies or organizational forms that can be placed under the partnership category.

Among the existing società benefit, as of January 2022, 84 were also certified B Corps. ¹⁷ It is necessary to highlight that, like in the United States, not all certified B Corps are società benefit and vice versa. On the one hand, there are SB that are not certified B Corps because Italian law does not require società benefit to be also certified by B Lab. It only requires the assessment of the company’s impact through the use of any third-party standard available on the market (B Lab’s Benefit Impact Assessment is only one of the available standards). On the other hand, according to B Lab’s internal regulation, Italian certified B Corps shall adopt the legal status of società benefit within a few years (two or three) from their certification to maintain the certification itself.¹⁸

Data from 2019 and 2021 also show that most società benefit are small-medium enterprises, ¹⁹ privately owned, and located in northern and central Italy. ²⁰ As for the business sector, SB mainly operate in three macro-sectors: wholesale/retail trade, manufacturing, and service sectors. ²¹

It is worth mentioning that the status of società benefit has been acquired also by certain peculiar companies, such as companies with mixed public-private ownership ²² and companies overseen by public independent authorities, like the Italian Stock Exchange Supervisory Authority ²³ and the Italian Insurance Supervisory Authority. ²⁴

Since its establishment, the SB movement in Italy has continued to grow. In December 2018, a representative association for the Italian società benefit, so-called Assobenefit, has been founded with the purpose of disseminating information on the “for benefit” model and fostering the birth of società benefit or the transformation of already existing firms into this business model.²⁵

3 The Background of the Legal Transplant

The Italian system was traditionally based on the dichotomy between (i) for-profit entities (or “business entities”), business organizational forms with profit-making purposes provided in Book V, Title V, of the Civil Code, and (ii) nonprofit entities, characterized by ideal or altruistic purposes, such as foundations and associations, provided in Book I, Title II, of the Civil Code. In addition, the Civil Code, Book V, Title VI, provides for cooperative companies, which are characterized by a “mutual benefit purpose,” that is, achieving exchanges of mutual aid between the members and the company. ²⁶

The fundamental distinction between for-profit and nonprofit entities has been partially overcome with the emergence of the Italian social enterprise movement. ²⁷ The starting point in that direction dates back to the 1990s, when the law recognized the existence of the so-called cooperative sociali (social cooperatives). ²⁸ Social cooperatives essentially provide a) social services, such as healthcare and educational services, or b) work integration (i.e., the performance of any activity with the aim of providing employment for disadvantaged people).

Later on, in 2006, the so-called impresa sociale (literally “social enterprise”²⁹) was introduced. ³⁰ In Italy, the legal status of the “social enterprise” can be acquired by all eligible organizations, regardless of their structure (business organizations, cooperatives, nonprofit entities). To be eligible as a “social enterprise,” an organization must be privately owned, have a social purpose, comply with the nondistribution constraint, ³¹ and make publicly available its financial statements and social report on the fulfillment of its social mission.

A “social enterprise” must perform an “entrepreneurial activity” (i.e., the activity must be productive, professional, economic, and organized ³²), but its business has to be of social utility (i.e., working in the sectors of welfare, health, education, training, research, culture, environmental protection, and social tourism or helping the integration into the workplace of underprivileged or disabled people, regardless of the sector of activity). Moreover, “social enterprises” were originally characterized by strict limitations on the remuneration of workers and managers and by a strong nonprofit purpose, meaning that the net profit deriving from their activity could not be distributed (directly or indirectly) among its members and owners.

The strict areas in which a “social enterprise” could operate and the nondistribution constraint (together with the other drawbacks of the 2006 statute, such as the absence of any tax benefits and difficulty in raising finances), were partially amended by the Italian legislator through the “Third Sector Reform” of 2017. ³³ The reform expanded the possible activities of a “social enterprise.” It provides the possibility of generally pursuing (mainly and permanently) civic, solidarity, or social utility objectives (including microcredit, social housing, fair trade, social farming, or employing in its activity at least 30% of disadvantaged or disabled workers) and allowed the distribution, though to a limited extent, of its net profits and surpluses to the members. ³⁴

The introduction of the “social enterprise” status allowed for the first time the use of for-profit organizational forms (provided in Book V of the Civil Code) for social utility purposes. However, it is important to stress that Italian “social enterprises,” notwithstanding the nondistribution constraint amendment of 2017, remain firmly rooted in the nonprofit area, i.e., the “third sector.”

This represents the most important difference between the Italian “social enterprise” and the sociatà benefit, the latter being included in the for-profit area and new “fourth sector” of the economy, in which boundaries between public, private, and nonprofit sectors are blurred and enterprises integrate social and environmental purposes with the business method.³⁵

4 The Italian Società Benefit

4.1 Sources and Legislation Features

The legal transplant of the benefit corporation into the Italian system was not the result of a long academic and political debate, considering that the provisions regulating società benefit were included in the 2016 “Stability Law” (a law aimed at regulating the country’s economic policy through public finance and budgetary measures) approved at the end of 2015, when the debate was completely focused of the national economic policy rather than on the introduction of the new hybrid form. ³⁶

Before discussing the content of the Italian statute, it should be observed that the introduction of the società benefit seems to be in line with other provisions introduced into the Italian system in recent years. Among them are (i) the abovementioned introduction in 2006 of “social enterprises,” subsequently reformed in 2017; (ii) the 2015 amendment of the Corporate Governance Code related to listed companies promoted by Borsa Italiana (the Italian Stock Exchange Supervisory Authority), which included references to the creation of value in the medium- and long-term periods, ³⁷ further amended in 2020 by introducing an explicit reference to sustainability; ³⁸ and (iii) the transposal of Directive 2014/95/EU, as regards the disclosure of nonfinancial and diversity information by certain large undertakings and groups, ³⁹ and Directive (UE) 2017/828, as regards the encouragement of long-term shareholder engagement. ⁴⁰

The Italian benefit corporation law is inspired by both the US Model Benefit Corporation Legislation (Model Act) and the Delaware Public Benefit Corporation Act, but it features some novelties. In particular, Italian law attempts to overcome a critical issue of the US model, ⁴¹ the one of controls on the actual pursuit of the public benefit.

The law does not create a new type of company in addition to those provided for in the Italian Civil Code (ICC) (in Book V, Titles V and VI), but rather, it outlines a new legal framework where the double purpose of profit and public benefit (i.e., beneficio commune) lies in the company’s purpose clause, in the company’s governance system, and in disclosure requirements.

In the Italian system, as opposed to the Model Act or major US benefit corporation state laws, società benefit is a governance model and a status available to all existing for-profit organizational forms⁴² (i.e., partnerships, limited liability companies, corporations) and cooperative companies⁴³ provided by the Civil Code, not just to corporations. ⁴⁴

Like in the United States, the Italian statute regulates only SB’s main features, such as the entity’s purpose, the directors’ fiduciary duties, the disclosure requirements, and the control mechanisms, while the existing company law applies in matters not expressly regulated.⁴⁵

4.2 Definitions and Purpose

With regard to the purpose, the Italian law resumes the provisions of Delaware: SB are characterized by a dual-purpose clause, combining the production of profits and the pursuit of both a “General” and (one or more) “Specific” public benefits.⁴⁶

Società benefit shall pursue, in addition to the profit-making purpose, one or more public benefit purposes (i.e., the Specific public benefit) and operate in a responsible, sustainable, and transparent manner vis-à-vis several categories indicated in a not exhaustive definition, such as individuals, communities, territories and the environment, cultural and social heritage, entities and associations as well as other stakeholders (i.e., the General public benefit).⁴⁷ The law provides broad definitions and does not clearly indicate how these different interests should be prioritized, giving directors a large degree of flexibility in this respect.

With regard to the general public benefit, the law also describes the scope of the general reference to “stakeholders,” defining them as “the individuals or groups of individuals directly or indirectly involved in, or affected by, the activities of the benefit company, being, inter alios: workers, clients, suppliers, lenders, creditors, public administration and civil society.”⁴⁸ The definition is very general and is not a “closed definition,” and it permits identifying stakeholders different from those listed by law.

As for the specific public benefit, a società benefit shall identify, in its company purpose clause, the particular public benefit aim/s that the company intends to pursue.⁴⁹ Beneficio comune (public benefit) is also defined by law in a broad manner⁵⁰ as the pursuit of one or more positive effects or the reduction of negative effects with respect to one or more categories of stakeholders, such as the ones listed above.⁵¹

The public benefit purpose (both specific and general) can be considered as a complementary but equal purpose with respect to that of the company itself (i.e., profit-making purpose or mutual purpose). Consequently, from a theoretical standpoint, it is possible to affirm that the introduction of società benefit into the Italian system ends the rigid dichotomy that exists, in a functional perspective, between for-profit entities (as a model for speculative associationism, characterized by the selfish distribution of economic results) and nonprofit entities (as a model for other associations pursuing ideal or altruistic purposes, characterized by the unselfish distribution of economic results).

4.3 Formation

Both newly established companies and already existing companies can acquire the status of società benefit. A new SB shall be incorporated in accordance with the applicable company law and società benefit statute. An existing company may become a società benefit by amending its articles of incorporation and by-laws (so that they contain the double-purpose clause: for profit and for benefit) in compliance with the relevant provisions applicable to each organizational form provided by the Italian Civil Code.⁵²

The law does not explicitly address dissenters’ rights with regard to shareholders who oppose the transition to or from the SB status. However, the amendment of the articles of incorporation and by-laws requires a special majority vote to protect the minority shareholders in the case of fundamental changes to the entity’s purpose clause, such as the introduction of or deletion of the SB mission. Such amendment shall also be made public by filing it with the competent Company’s Register Office in compliance with the applicable Civil Code provisions.

Regarding the amendment of the articles of incorporation and by-laws to acquire an SB status, a fundamental question under Italian law is the eventual application of the exit right granted to minority shareholders, especially in joint stock companies (S.p.A.) and limited liability companies (s.r.l.).⁵³

According to Italian company law, minority shareholders have the right to withdraw from the company in a wide range of circumstances, all grounded on the disagreement of the minority with the resolutions passed by the majority shareholders. In case they decide to exercise their cash exit rights, ⁵⁴ the company has the duty to repurchase the shares of the withdrawing shareholders.

In particular, shareholders of joint stock companies and limited liability companies are entitled to exercise their exit rights whenever a resolution that changes the business purpose clause of the company is adopted. In order to exercise their withdrawal right, the amendment must result in a significant or substantial change in the company’s activity, which is reflected—according to scholars—in the investment risk. ⁵⁵

Thus, in the case of the introduction or deletion of the SB status, the amendment to the entity’s purpose clause may, in practice, take a very different stance and may result or not in a change that can be considered relevant for the exercise of the withdrawal right. The relevance of the amendment depends on the activity already pursued by the company and the changes produced adding the public benefit purpose. The evaluations must be carried out on a case-by-case basis. However, it is worth remembering that minority shareholders are generally protected by the abovementioned special majority vote required for the approval of the amendments to the articles of incorporation and by-laws. ⁵⁶

Finally, to mirror the change in the purpose clause, the law provides that società benefit can choose to add, along with the company name and company type, the words “Società Benefit” or the abbreviation SB and use such denomination in its official document and communications to third parties.⁵⁷

4.4 Accountability and Governance Structure

The direct consequence of the inclusion of a public benefit purpose in the corporate purpose clause is the alteration of the governance structure and the powers, duties, and responsibilities of the directors.

With regard to directors’ duties and responsibilities, Italian law draws its inspiration from the Delaware statute. In fact, it requires the directors to manage the company in a responsible, sustainable, and transparent manner (i.e., pursuing the general public benefit), balancing the (i) interests of the shareholders, (ii) the interests of other stakeholders (like those materially affected by the company’s conduct), and (iii) the pursuit of the specific public benefit, or public benefits, identified in its articles of incorporation and by-laws.⁵⁸ Thus, directors have great discretion in achieving a higher purpose than simply maximizing shareholder value.

Failure to comply with this balancing obligation may be deemed a breach of the duties imposed on directors by law and the by-laws, with the consequent application of the relevant provisions on directors’ liability provided by the Italian Civil Code for each organizational form.⁵⁹ Only the company itself and the shareholders (through a derivative action) have standing to bring suits alleging the breach of directors’ duties and the failure to pursue public benefit in case of damages (e.g. reputational damages).

The law does not explicitly provide for (nor denies) any kind of duty or additional liability of directors vis-à-vis third parties benefiting from the public benefit. Thus, directors are generally protected from claims made by the beneficiaries of the public benefit that have no standing to sue both the company and its directors for failing to pursue the company’s social mission. The only exception is represented by the doubtful (and difficult) possibility of bringing an action pursuant to articles 2395 (for corporations) and 2476, paragraph 6 (for limited liability companies), of the Italian Civil Code.⁶⁰ These articles provide for the right of third parties to bring a liability action against directors in the event they suffered damages as a direct result of the directors’ misconduct.

The Italian statute, like the one of Delaware and unlike the Model Act, does not provide for any limitation or exoneration from personal liability on the part of società benefit’s directors and does not exclude the possibility of bringing claims for monetary damages against them. A personal action against directors is the central private enforcement tool offered to shareholders against directors’ failure to comply with their duties of conduct and the duty to pursue a public benefit.

From the organizational perspective, a società benefit shall identify one or more individuals to be appointed as “impact manager/s,” with the specific task of pursuing the public benefit.⁶¹ The choice of the impact manager is left to the board of directors that has wide discretion in the selection. He/she can be a director, an officer, or another person working within the company, but the function can also be outsourced.

The law, unlike the Model Act, does not regulate in detail the role of the impact manager but more generally refers to “individuals … with the role and tasks for pursuing the common benefit.” The impact manager may assist directors in their activities or check whether the company’s activities are consistent with its social and environmental objectives. However, the appointment of the impact manager and his/her eventual liability does not exonerate directors and auditors from their duties and responsibilities.⁶²

4.5 Transparency Requirements and Control Systems

To create greater accountability and transparency, companies adopting the “for-benefit” model are required to publicly report on their social and environmental performance so that customers, workers, investors, and policy makers can assess the company’s impact.

In regulating the transparency requirements and the control system, the Italian law does not simply transplant the US provisions but introduces new elements.

In accordance with the Model Act, Italian law requires società benefit to produce and publish on their website (if existing)⁶³ an annual benefit report⁶⁴ detailing their pursuit of the public benefit.⁶⁵ Moreover, the company’s impact and the pursuit of the public benefit must be assessed using a third-party standard.⁶⁶

In particular, the annual benefit report shall include the following:⁶⁷

• (a) the description of the specific objectives and actions implemented by the directors to pursue the public benefit purposes, and the possible mitigating circumstances, which have prevented or slowed up their achievement;

• (b) the evaluation, through the chosen third-party standard, of the impact generated by the company in the areas of corporate governance, workers, other stakeholders, and environment;⁶⁸

• (c) a specific section containing the description of the new objectives that the società benefit intends to pursue in the following fiscal year.

The third-party standard used must comply with the requirements listed by the law. It must be comprehensive (in that it assesses the impact of the business and its operations aimed at pursuing the public benefit on all the possible stakeholders), independent (developed by an entity not controlled by, or affiliated to, the società benefit), credible (developed by a subject that both has access to the necessary expertise and uses a balanced scientific and multistakeholder approach), and transparent (in that information about the criteria used, the process and persons developing or supervising those criteria, and the sources of financial support for the organization developing them are made publicly available).⁶⁹

Italian law goes beyond the US model in that, on the one side, it requires the annual benefit report to be attached to the company’s annual financial statements (and filed with the Company’s Register Office),⁷⁰ with all the legal consequences and sanctions this entails in the event of a failure to deposit.⁷¹

On the other, differently from the United States (where there is no public enforcement on benefits corporations’ activities), Italian law overcomes the private enforcement system, based on the company’s action or the shareholders’ derivative suits and the eventual reactions of consumers and the market to greenwashing, establishing a system of public enforcement. It gives the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato (AGCM)) the power to apply the regulation on misleading advertising and misleading business practices⁷² to sanction companies that, using the SB’s legal form or the name società benefit or the abbreviation SB, repeatedly and without good cause do not pursue the public benefits provided for in their by-laws.⁷³

In the performance of its supervisory activities, the AGCM, endowed with inspection, inhibitory, and sanctioning powers, may initiate ex officio, as well as at the request of interested individuals or organizations, an administrative proceeding aimed at investigating any violations by a società benefit.⁷⁴

The supervisory activity of an independent authority should contribute to the strengthening of the protection of stakeholders, which lack direct action against the company, and building a brand—the one of società benefit—characterized by greater guarantees of reliability for investors, consumers, and policy makers.

4.6 Specific Tax Treatment

With regard to tax treatment, in Italy, there are no specific tax advantages associated with the use of the “for-benefit” model.⁷⁵ Società benefit are subject to ordinary income tax rules provided by the Income Tax Code (TUIR) ⁷⁶ for each business organizational form.

5 Reactions to the Legal Transplant

The società benefit statute has been subject to subsequent interpretations and debates on whether it was truly necessary and appropriate to introduce this new hybrid form into the Italian system.

In the opinion of some scholars, existing for-profit and nonprofit entities were sufficient for the development of the fourth sector and there was no need for società benefit, given that for-profit organizational forms were already allowed ⁷⁷—in practice—to pursue nonprofit purposes (e.g., through CRS programs and philanthropy) and, thus, would have been allowed to pursue public benefit purposes.

Other scholars ⁷⁸ highlighted that, based on Civil Code provisions and especially article 2247,⁷⁹ the Italian system (like the French system before the reform of 2019 ⁸⁰ and unlike the German, Swiss, or US ones) expressly and tightly links the use of business entity structures (provided by Book V, Title V, of the Code) with the pursuit of an economic activity and a profit-making purpose. Hence, according to a systematic interpretation of the Civil Code, business entities cannot be used for the pursuit of nonprofit purposes (except marginally) unless the law explicitly allows for it, as happens with social enterprises (since 2006) or società benefit (since 2016).

Accepting the latter interpretation, the legal transplant seems to have been necessary, given that the Italian Civil Code did not explicitly allow the use of business entities for hybrid purposes pursued by triple bottom-line ⁸¹ oriented companies. Moreover, regardless of the different interpretations of the Civil Code, the società benefit statute provides legal certainty by eliminating the risk of rejection by the Company’s Register Office of the articles of incorporation and by-laws of dual-purpose companies. ⁸²

The Società benefit model also provides other advantages for entrepreneurs willing to pursue a social and environmental mission. The first is that the società benefit statute allows the safeguarding of the so-called fidelity to the mission following a change of control.⁸³ The second, is the increased flexibility through which directors can pursue social and environmental objectives due to the decay of the shareholder wealth maximization paradigm as a parameter they have to consider in their decisions (even though in Italy the shareholder primacy doctrine does not have the same impact it has in the Anglo-American corporate model) to avoid claims for breach of their duties. ⁸⁴

Furthermore, as mentioned above, società benefit do not have tax incentives, but they can have a reputational advantage in the eyes of third parties (e.g., clients, suppliers, investors, and other stakeholders). Thus, the real advantage is the possibility of making use of such qualification within the market, which currently is increasingly oriented toward sustainability. ⁸⁵

Finally, the introduction of a well-known and recognized international hybrid entity model, such as the benefit corporation model, may play an important role for Italian companies. It can give them access to a rapidly growing fourth sector in a global market perspective and can enhance the credibility and branding of companies choosing to adopt it.

6 Further Legislative Evolution

After the legal transplant of 2015, the Italian legal system continued to support the SB model.

At the international level, Italy played an important role in the OSCE Parliamentary Assembly Annual Session of July 2019, dedicated to “Advancing Sustainable Development to Promote Security: The Role of Parliaments.” The Italian delegation indeed proposed the inclusion of two amendments in the “Luxembourg Declaration” issued during the Annual Session. ⁸⁶

The first amendment calls on parliaments and governments of Organization for Security and Co-operation in Europe (OSCE) states to take action through the adoption of new statutes that encourage and facilitate a responsible, sustainable, and transparent corporate behavior, “promoting laws to set up and foster companies that pursue—alongside profits—one or several goals with social or environmental benefits.” ⁸⁷ Hence, the amendment encourages the adoption of hybrid models for businesses, such as the benefit corporation model.

The second amendment is aimed at promoting impact assessments for companies operating in the environment, social, and government sectors, as well as the creation and use of metrics correlated to the Sustainable Development Goals. ⁸⁸

At the national level, the Italian legislator is taking action to support the development of società benefit through the economic leverage of public procurement and temporary incentives for their creation.

In December 2019, the Parliament amended the Italian public procurement law (i.e., the “Public Contract Code”) ⁸⁹—applicable to public works, supply, and service contracts and concessions—introducing new reward criteria based on the positive impact of the company, to be used in the evaluation of tenders. ⁹⁰

In attributing such reward, contracting authorities must now take into account, together with the “legality rating” ⁹¹ and “company rating,” ⁹² the positive impact—assessed with the use of a third-party standard—generated by the tendering company in the areas of corporate governance, workers, other stakeholders, and the environment. The amendment to the public procurement law explicitly recalls the legal requirements provided by the società benefit statute for the annual benefit report,⁹³ but the reward can be achieved by all companies producing such a report on their impact, regardless of their status as società benefit. The National Anti-Corruption Authority (ANAC) is in charge of defining the evaluation criteria for assessing the impact generated by the company within the framework of the public procurement procedures.⁹⁴ However, it has not yet issued the appropriate guidelines and is in the public consultation process. ⁹⁵

As for incentives, among the measures offered to support the economy during the COVID-19 emergency, in July 2020, special temporary incentives (up to the end of 2021) were provided to strengthen the società benefit movement. A tax credit, equal to 50% of the costs related to the establishment of a società benefit or to the acquisition of an SB status, has been provided. Moreover, up to three million euros fund for the promotion of the “for-benefit” model in the national territory has been created at the Ministry for Economic Development.⁹⁶

7 Final Remarks on the Italian System from a Comparative Law Perspective

A few years after their introduction, società benefit seem to be widely accepted, and the movement, as highlighted at the beginning of this chapter, continues to grow. The Italian community is one of the world’s fastest-growing “for benefit” communities. As of September 2021, in Italy, there were more than 120 certified B Corps and 1344 società benefit. It is worth stressing that 31% of such società benefit were established between April and September 2021, notwithstanding the economic downturn caused by the pandemic, ⁹⁷ meaning that the società benefit is still perceived by entrepreneurs as a resilient organizational structure suited to the needs of these uncertain times.

Considering the substance of the legal transplant, the Italian “for benefit” model, which is the first benefit corporation model adapted by a civil law system, is a mix between the Model Act and the Delaware law but is characterized by some peculiar features. In particular, the major innovations, compared to the United States, are the scope of the legislation and the control system.

With regard to the first, the società benefit status can be acquired by any existing for-profit and cooperative organizational form provided by the Civil Code. This approach has been followed by other civil law countries, such as Colombia,⁹⁸ Ecuador,⁹⁹ and Perù,¹⁰⁰ which between 2018 and 2020 introduced the Sociedades de Beneficio e Interés Colectivo” (BICs), as well as France, which in 2019 introduced the hybrid model of entreprise à mission. ¹⁰¹ In those systems, too, like in the Italian one, the hybrid status (BIC or entreprise à mission) can be adopted by any for-profit organizational form provided by law.

As for the second innovation, the Italian system has provided for a public enforcement mechanism through the attribution of supervisory powers on società benefit’s behavior to the Italian Competition Authority. Colombia, Ecuador, Perù, and France also decided to set up public enforcement systems, which differ from each other.

In Colombia, the oversight of BICs is assigned to the Superintendencia de Sociedades, an administrative body that maintains a public list of third-party standards to measure BIC companies’ impact and oversees their compliance with the law. In Ecuador, supervisory powers over BIC companies have been assigned to the Superintendencia de Compañías, Valores y Seguros, which may sanction those companies that do not pursue public benefit purposes or violate the rules aimed at regulating BIC companies. In France, the public prosecutor, or any interested person (all the stakeholders of the company), can start a claim for the removal of the entreprise à mission status in the case of violations of the applicable regulation or in case the social and environmental objectives are not respected.¹⁰²

The Peruvian system, which seems to be the one most influenced by the Italian model, assigned supervisory powers over BICs to the Superintendencia Nacional de los Registros Públicos and the national competition authority (Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual), which has the power, like in Italy, to sanction those companies that, by improperly using their status, carry out acts that can be traced back to misleading advertising or other practices that are contrary to free competition and consumer protection.

From this brief analysis, although based on the few civil law systems that have so far regulated benefit corporations (to which must be added British Columbia and Rwanda ¹⁰³), it is possible to identify a convergence between civil law countries and to affirm that they have embraced some peculiarities of the Italian model.

Finally, it is worth noting that the path followed by the Italian system seems to be consistent with the recent European Union initiative aimed at a more comprehensive protection of stakeholders’ interests in for-profit entities. From the early 2000s onward, the European Union developed its Corporate Social Responsibility Strategy,¹⁰⁴ while in recent years, the protection of stakeholders’ interests has been integrated into company law and financial market regulation, as in the case of the Directive on nonfinancial reporting of 2014 ¹⁰⁵ (soon to be replaced by the Corporate Sustainability Reporting Directive¹⁰⁶) and the Directive on long-term shareholder engagement of 2017.¹⁰⁷ Moreover, a directive on sustainable corporate governance¹⁰⁸ and supply chain due diligence¹⁰⁹ is currently under consideration.¹¹⁰ It would be interesting to see whether in the near future it will be possible to envisage a uniform model for purpose-driven companies at the European level.