The Right to Challenge Resolutions in LLCs: Commentary on Order No. 16047 of 2024

The recent intervention by the Court of Cassation with Order No. 16047 of June 10, 2024, has brought about an important clarification regarding the rights of members of limited liability companies (LLCs) who have pledged their shares. In particular, the ruling emphasizes that, despite the pledge, the member retains the right to challenge shareholder meeting resolutions. This aspect proves crucial for ensuring the protection of members' interests, even in situations of economic difficulty.

Regulatory and Jurisprudential Context

The order refers to codal provisions, specifically Articles 2471-bis and 2352 of the Civil Code. According to the combined effect of these provisions, a member whose shares have been pledged loses only the right to vote at the meeting. However, they retain all other administrative rights, including the possibility to challenge resolutions that are contrary to the law or the company's articles of association.

LLC - Shares Pledged - Entitlement to Vote at the Meeting - To the Pledgee - Retention by the Member of the Right to Challenge the Meeting Resolution. A member of a limited liability company who has pledged their shares retains the right to challenge the meeting resolution in which the pledgee voted on their behalf, considering that from the combined effect of Articles 2471-bis and 2352 of the Civil Code, it is evident that the member, whose shares have been pledged, loses only the right to vote at the meeting, but retains, in the absence of a different agreement, all other administrative rights connected to their status, including that of challenging resolutions contrary to the law or the articles of association.

Implications for LLC Members

The ruling offers significant protection to LLC members facing financial difficulties. Indeed, even if their shares have been pledged, the member does not completely lose control over their rights. This implies that, in the event of shareholder meeting resolutions deemed illegitimate, the member can still assert their rights in legal proceedings.

• The right to challenge is fundamental to ensuring the correctness of meeting decisions.
• The retention of administrative rights allows for greater protection for members.
• The regulatory provisions offer a framework of legal protection even in crisis situations.

Conclusions

Order No. 16047 of 2024 represents an important step forward in protecting the rights of LLC members in difficulty. The clarity on the retention of the right to challenge, despite the loss of the right to vote, underscores the importance of a balanced approach in company regulation. This jurisprudential intervention not only reassures members but also highlights the importance of responsible governance that is attentive to the needs of all members, regardless of their financial situation.