Network contract under Italian Law

The network contract: notion and purpose

In addition to other forms of cooperation between companies (for further details see The firm network contract and other forms of business cooperation), the network contract was introduced into the national regulatory framework by Law Decree 5/2009, amended by Law Decree 33/2009 (subsequently amended by Law Decree 78/2010, enacted by Law Decree 122/2010; Law Decree 83/2012, enacted by Law 134/2012; Law Decree 179/2012, enacted by Law 221/2012), whose Article 3, paragraphs 4 ter - 4 quinquies, still provide the relevant rules. In particular, pursuant to the above-mentioned paragraph 4 ter, 'with the network contract several entrepreneurs pursue the purpose of individually and collectively increasing their innovative capacity and competitiveness on the market and to this end they undertake, on the basis of a joint network program, to' carry out one or more of the following activities:

1. "collaborate in predetermined forms and in predetermined fields relating to the exercise of their respective businesses",
2. "or to exchange information or services of an industrial, commercial, technical or technological nature",
3. "or to carry on jointly one or more activities falling within the scope of their undertakings".

It is therefore a contract by which several contracting entrepreneurs prepare and implement a cooperation program aimed at improving the innovative capacity and competitiveness of their respective enterprises. This instrument of cooperation between entrepreneurs is undoubtedly similar to the consortium, but differs from it, insofar as it is relevant here, in terms of the purpose pursued, which is to individually and collectively enhance the innovative capacity and competitiveness of the member companies. It is therefore not (or at least not only) an instrument to achieve cost savings in order to generate greater profit, but rather an "instrument to realize individual and collective development policies of the enterprises" through the services to which they oblige themselves.

Subjective scope of application

The rule expressly refers to entrepreneurs. Therefore, only those who are legally qualifiable as such (see Article 2082 of the Italian Civil Code), whether in individual or associated form, may enter into such a contract, i.e., for example, individual entrepreneurs, partnerships, corporations, cooperatives, consortia, social enterprises, as well as all those further entities qualifying as entrepreneurs insofar as they exclusively or principally carry out business activities, albeit non-profit, such as associations and, as would seem more consistent, ETS entrepreneurs (for further detail see collective enterprise).

It should be noted that Article 12(3)(a) of Law 81/2017 (the so-called jobs act of the self-employed) extended the possibility of entering into a network contract to professionals as well, in order to allow them to participate in calls for tenders and compete for private assignments and contracts. It thus also allows such persons to set up professional networks or participate in business networks in the form of mixed networks. Thus, the subjective requirement of the exclusively entrepreneurial nature of the members has been dropped.

Advertising requirements and content of the contract

The network contract is subject to registration in the section of the business registry in which each participant is registered (para. 4 quater, cited above). To this end, the contract must be drawn up in the form of a public deed or a notarized private deed or a digitally signed deed (para. 4 ter, cited above). The effectiveness of the contract commences when the last of the prescribed inscriptions has been executed with respect to all the original signatories.

With regard to the content of the network contract, paragraph 4 ter, cited above, provides that it must mandatorily provide:

a) the data relating to each adhering company (whether by virtue of the original signing of the contract or by subsequent adhesion), as well as the name and registered office of the network, if the establishment of a common asset fund is envisaged;

b) an indication of the strategic objectives of innovation and enhancement of the competitive capacity of the participants and the modalities agreed with them to measure progress towards these objectives;

c) the definition of a common network program (see below);

d) the duration of the contract, the modalities for the accession of other entrepreneurs and, if agreed, the causes and modalities for early termination;

e) if the contract provides for its establishment, the information concerning the person chosen to act as joint body for the purpose of performing the contract or one or more parts or stages thereof. The topic is discussed in greater detail below. It should be noted at the outset that where provision is made for such a body, which is merely a contingent body, the contract must also govern its management and representation powers and the rules relating to its possible replacement;

f) the rules for the adoption of decisions by the partners on any matter or aspect of common interest which does not fall within the powers of management delegated to the common body, when established, as well as the rules relating to the manner in which decisions to amend the scheme are to be taken.

In particular, the network program

A central role within the network, both at the stage of the conclusion of the contract and of its implementation, is played by the common network program, which pursuant to paragraph 4 ter (c), cited above, must, in particular, contain

- the statement of the rights and obligations assumed by each participant;

- the means of realizing the common purpose;

- the rules governing the joint property fund, if its establishment is envisaged. In particular, provision must be made for the amount and valuation criteria of the initial contributions and of any subsequent contributions that each participant undertakes to make to the fund, as well as the fund's management rules. Moreover, it is specified that if permitted by the plan, the contribution may also be made by means of the contribution of designated assets, established pursuant to Article 2447-bis, par. 1, letter a), of the Civil Code.

The so-called “open door” principle

As mentioned above, the network contract must provide for, inter alia, the modalities for the subsequent accession of new entrepreneurs. In this sense, the network contract takes on the characteristics of a structurally, but not necessarily open contract. It may, however, become so by providing for procedures that do not require the prior consent of the other contracting parties. In that case, the accession of new entrepreneurs would not technically be a subjective modification of the contract, but rather an act of execution thereof. Conversely, where nothing is envisaged, the entry of new participants is subject to the procedures envisaged for other contractual modifications, as a subjective modification of the contract.

The distinction between 'Contract-Networks' and 'Subject-Networks' and the (past) problem of legal subjectivity

Under the original legislative framework, the possibility of attributing an autonomous legal subjectivity to the network was debated. In the absence of an explicit indication, doctrine had come to admit the configuration of the network as an autonomous subject of law depending on the concrete features given to it by the network enterprises.

Following the amendments made in 2012, the aforementioned paragraph 4 ter now expressly excludes that the network be endowed with legal subjectivity, without prejudice, however, to the possibility of its acquisition by the express will of the parties. This means that, unless otherwise chosen, the network is not configured as a legal entity independent of the member undertakings. Indeed, in the event that the network without legal entity is provided with a common body, such body acts as a representative not of the network but of the member undertakings (see paragraph 4 ter, letter e).

This legislative option has led to the definition of the macro subdivision between:

i. contract-networks: networks without legal subjectivity;

ii. subject-networks: networks having legal subjectivity, acquired by free choice of the members through the procedure outlined in the last part of paragraph 4 quater.

The legal nature of the network

The acquisition or not of an autonomous subjectivity, together with the network's internal organizational structure, affects its legal nature.

Indeed, with respect to business networks having their own subjectivity, the network contract is configured as a plurilateral contract with common purpose, having associative cause. It is in fact 'an associative contract in the proper sense, which gives rise to an organized organization, endowed with subjective alterity with respect to the individual participants in the network'.

On the other hand, the reconstruction of the legal nature of the network without subjectivity appears more articulated, as in this case a distinction must be made according to the organization of the network. In particular:

1.  networks lacking subjectivity but having a common body and an asset fund (so-called structured networks): the network contract retains the nature of a plurilateral contract with a common purpose with external relevance, but without an associative cause. The typical effect to which it gives rise appears to be specifically attributable to assets intended for the achievement of the objectives set forth in the network contract;
2. networks lacking legal personality and also lacking a common body and an asset fund (so-called unstructured networks): in this case the contract may take on the features of a plurilateral exchange contract or a plurilateral contract with a common purpose, depending on the use of the services of each contracting party. In the latter case, even where a form of internal organization is given (e.g., contributions of the parties) for the purpose of enabling the joint activity to be carried out, the internal organization remains devoid of external relevance and autonomy vis-à-vis third parties.

The organization of the network: general framework (referral)

The discipline referring to internal organization is very meagre and flexible. To a large extent it refers back to contractual autonomy for the definition of the organizational structure of the network with reference to the organizational and governance profiles of the network. The subject matter unfolds through three main profiles:

a) The network bodies

The only body that is expressly contemplated in the legislative provisions referred to is the "common body", which is merely possible, the establishment of which must be provided for in the contract. In that case, it is always the contract that must govern its powers of management and representation and the rules relating to its possible replacement.

b) The common fund and the network's asset autonomy

A further profile that is expressly considered in the articles concerns the possibility of setting up a common fund. Also in this case, its provision is merely eventual and left to the free determination of the parties, who are allowed to endow the network with an asset fund or not. Where, however, the network is endowed with a common body and an asset fund, Articles 2614 and 2615 of the Civil Code, i.e. the rules governing the common fund of consortia with external activity (see paragraph 4 ter, no. 2, cited above), apply to it.

c) Decision-making processes within the network

The third profile concerns the decision-making processes within the network. Once again, the legislative discipline is very meagre, if not absolutely silent, limiting itself to deferring to contractual provisions the determination of the rules for the taking of decisions by the network members on any matter or aspect of common interest as well as for the modification of contractual provisions.

For further references on organizational profiles and decision-making processes within the network see: The organization and governance of Firm Networks.

References

F. Cafaggi, Il contratto di rete nella prassi. Prime riflessioni, in Contratti, 2011, p. 511 et seq.;

G. F. Campobasso, Diritto commerciale, vol. I, Diritto dell’impresa, UTET Giuridica, Milano, 2022, p. 255-291;

G. F. Campobasso, Diritto commerciale, vol. II, Diritto delle società, UTET Giuridica, Milano, 2022, p. 640 et seq.;

A. Caprara, Le “modificazioni soggettive” del contratto di rete: spunti di riflessione, in G. Meruzzi (a cura di), Il contratto di rete. Dalla teoria giuridica alla realtà operativa, 11 aprile 2012, p. 29 et seq.;

M. Ceolin, Il contratto di rete tra imprese nella legislazione italiana: rete strutturata e non strutturata tra luci e ombre a dieci anni dalla sua introduzione, in Revista de Direito da Cidade, 2019, p. 413 et seq.;

F. Cirianni, Il contratto di rete, in Notariato, 2010, p. 442 et seq.;

A. Gentili, Una prospettiva analitica su reti di imprese e contratti di rete, in Obbli. e contr., 2010, p. 87 et seq.;

G. Meruzzi, Notazioni in tema di soggettività giuridica della rete, in Id. (a cura di), Il contratto di rete. Dalla teoria giuridica alla realtà operativa, 11 aprile 2012, p. 15 et seq.;

G. Meruzzi, Complemento di diritto commerciale, 1, Impresa, società in generale e società di persone, 2° ed., Egea, Milano, 2019;

P. Saccomanno, Il contratto di rete: profili di un’indagine aperta, in Contr. impr., 2017, p. 673 et seq.