How to Appoint the Supervisory Board in SRLs: Obligations, Shareholders’ Meeting and Remuneration.

With the approval of the financial statements as at 31/12/2022 for SRLs, the obligation to appoint the supervisory body (board of statutory auditors, sole auditor, auditor) could arise. In this article we analyze in which cases the appointment obligation is triggered, how the shareholders’ meeting should be managed (with facsimile) and what are the problems relating to the remuneration of the supervisory body.

The limited liability companies (and cooperatives) established on 16.3.2019 which in 2021 and 2022 exceeded the size limits set by art. 2477 of the Civil Code are required to prima appointment of the control body / auditor.

The appointment must take place with the approval of the 2022 financial statements, taking the years 2021 and 2022 as a reference to be considered for the verification of the size limits.

Obligation to appoint the supervisory body in the srls

The control structure in limited liability companies is governed by art. 2477 of the Civil Code, entitled “Auditor and statutory audit of accounts”.

The provision allows the shareholders of Srl to appoint:

• and sole mayor (possibility subject to the circumstance that the deed of incorporation does not expressly provide for the appointment of a collegial body, in which case a modification of the deed of incorporation will be necessary before the appointment of the sole auditor);
• il supervisory board;
• an external subject: the reviewer (more correctly, the statutory auditor or statutory auditing firm).

The choice of the person in charge of the checks determines the possibility for the shareholders to choose the system of checks to which the company will be subject:

• supervision concomitant to the management pursuant to art. 2403 of the civil code and statutory audit function pursuant to art. 14 of Legislative Decree no. 39/2010 cumulatively entrusted to the control body (auditor or board of statutory auditors);
• exclusive audit function pursuant to art. 14 of Legislative Decree no. 39/2010 entrusted to the auditor.

There remains the possibility of adopting a more articulated structure of controls, appointing both the control body (board of statutory auditors or sole auditor) and the external auditor and, except for the cases of mandatory appointment, not to appoint any controller.

Therefore, the supervisory function and the statutory auditing of the accounts may be combined with the sole auditor; while, the statutory auditor may be appointed exclusively to carry out the auditing activity.

Structure of mandatory controls in SRLs

In detail, as regards the structure of the mandatory controls (art. 2477, paragraph 3, of the civil code), the shareholders’ meeting appoints the sole auditor (or the board of statutory auditors and/or the statutory auditor/audit firm) in cases where the company:

1. is required to prepare the consolidated financial statements;
2. controls a company required to carry out statutory auditing;
3. has exceeded, for two consecutive years, at least two of the limits established by art. 2435-bis, co. 1, cc for the preparation of the financial statements in abbreviated form.

In any case, the termination of the sole auditor will take place at the end of the three-year term of office.

The provision which provides for cases of obligation to appoint the supervisory body for Srls has been amended several times over time.

Amendments to Legislative Decree 14/2019

First the art. 1 c. 379 of Legislative Decree no. 14/2019 (“Company crisis code“), in force since 02/15/2019, had modified, among other things, the regulation of the control body (mayors or auditors) of the Srls:

• significantly reducing the limits for the appointment of this body (art. 1 c. 379 Legislative Decree 14/2019)
• no longer connected to those envisaged for the possibility of preparing the financial statements in abbreviated form (art. 2435-bis of the civil code), which have remained unchanged.

The appointment of the supervisory body was therefore mandatory if the company, alternatively:

1. was required to prepare the consolidated financial statements
2. controlled a company obliged to carry out statutory auditing of accounts
3. had exceeded at least one of the following limits for 2 consecutive years (prior to the amendment, there were 2):

• total balance sheet assets: € 2,000,000
• revenues from sales and services: € 2,000,000
• employees employed on average during the financial year: 10 units.

Ed. Learn more here Business management: adequate organisational, administrative and accounting structures

New and definitive limits envisaged d

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