Written by Alberto Angeloni
Not all and any person or entity can be declared bankrupt or can file for the restructuring proceedings governed by the Italian bankruptcy law.
Indeed, Italian bankruptcy law governs only companies that beat certain subjective and dimensional requirements. Those who do not achieve these parameters are not subject to bankruptcy law. So they cannot be declared bankrupt nor file for restructuring proceedings governed by Italian bankruptcy law (“IBL”).
The test is governed by Article 1 IBL that specifically provides as follow.
Subjective requirement: being a business person (imprenditore commerciale).Only the persons/companies who are engaged in a business, other than governmental entities, are subject to (can file for) the ordinary bankruptcy (fallimento) and to the judicial composition with creditors (concordato preventivo) proceedings.
Objective requirement: being a business entity (business person) exceeding certain dimensional parameters.
In order to be subject to (file for) the ordinary bankruptcy (fallimento) and to the judicial composition with creditors (concordato preventivo) proceedings a business entity (business person) shall exceed at least one time in the three preceding years at least one of the following parameters:
– having assets (attivo patrimoniale) exceeding Euro 300,000.00;
– having annual gross revenues (ricavi lordi) exceeding Euro 200,000.00;
– having debts, encompassing the undue (debiti anche non scaduti), exceeding Euro 500,000.00.