The consortium
Concept and typology
«Under the consortium contract, several entrepreneurs establish a common organization for the regulation or conduct of certain stages of their respective enterprises».
Art. 2602 Civil Code
The definition in the Civil Code, the result of the 1976 reform, is broad and refers to an associative scheme between entrepreneurs that is suitable for encompassing two distinct phenomena:
- anti-competitive consortium: a consortium whose purpose is to regulate and limit mutual competition in the market between entrepreneurs engaged in the same or similar activities;
- coordination consortium: for the performance of certain stages of the respective enterprises. In other words, it is an instrument of inter-firm cooperation.
These forms of cooperation are mainly resorted to by small and medium-sized enterprises in order to achieve and recover market competitiveness through the reduction of overhead costs.
For the first type of consortia, it is important that controls are in place so that forms of monopoly in violation of antitrust law are avoided.
The second type, on the other hand, is favored by the legislature, which in fact provides some tax breaks, as not only do such consortia promote the survival of medium and small enterprises, but also help preserve the competitive structure of the market.
In terms of civil law, a further distinction is important, between:
- consortia with internal activity;
- consortia with external activity.
In both there is a common organization, but in the former such an organization serves only to regulate relations between enterprises. In the latter, on the contrary, the parties establish a common office that carries out activities with third parties in the interests of the participating enterprises.
The consortium contract
The consortium contract
- can be concluded only between entrepreneurs;
- is a formal contract, that is, it must be in writing under penalty of nullity;
- must contain certain essential elements stipulated by law;
- is a contract of duration, which can be freely determined by the parties. In the silence of the parties it lasts for 10 years;
- tends to be an open contract, which means that new entrepreneurs can be part of it without requiring the consent of all other participants. However, in order for this feature to be maintained, the parties must stipulate how new businesses are to enter.
Consortia with internal activity
Essential structural character of consortia is the creation of a common organization. This organizational structure is based on the presence of
- a body with deliberative functions composed of all consortium members (assembly);
- a body with management and executive functions (governing body).
Consortia with external activity
Such consortia are one of the possible organizational forms for the collective exercise of business activities.
The regulation of such consortia aims to regulate the property relations between the consortium and third parties.
These type of consortia differ from the ones with only internal activity mainly for the following reasons:
- there is a legal disclosure regime for them, in the sense that an excerpt of the consortium contract must be registered with the commercial register;
- the contract must specify the persons vested with the presidency, management and representation of the consortium and their powers;
- there is also express provision for the formation of a capital fund, consisting of the initial and subsequent contributions of the consortium members and the assets acquired by such contributions.
The essential rule on liability is as follows:
- for obligations assumed in the name of the consortium, the consortium is exclusively liable, and creditors may assert their rights only against the patrimonial fund;
- for obligations assumed by the bodies of the consortium on behalf of individual consortium members, both the consortium member or members concerned and the consortium fund are jointly and severally liable.
Reference
M. Campobasso, Diritto commerciale, vol. 1, Diritto dell'impresa, Utet, 2022, pp. 265-275.
For further details see Consortiums: Meaning, Types, and Examples, available at https://thestrategystory.com/blog/consortiums-meaning-types-and-examples/#:~:text=A%20consortium%20of%20companies%20refers,pursuit%20of%20a%20specific%20objective.
