The Court of Rome – Specialized Business Section, 03/10/2020, ruled on the validity of earn-out clauses, specifying that:
The agreement whereby the parties, as part of a contract for the transfer of shareholdings, agreed on a symbolic price and a possible future integration of the price, equal to 50% of any assets resulting from the final liquidation balance sheet, must be considered lawful: this agreement falls within the so-called earn-out clauses, aimed at setting the parameters for consideration for the sale, dividing it into a fixed part and a variable part, based on the company’s performance, the latter to be paid at a later time.
In this regard, it is not possible to invoke the nullity of the clause, since the actual price integration mechanism does not depend on the purchaser, and the provisions of art. 1355 of the Italian Civil Code are not breached; in fact, preparation of the financial statements on the basis of which the higher price to be paid is determined is not the responsibility of the purchaser, but rather of the directors of the target company, who in their activity are required to comply with imperative regulations.
In contracts for the transfer of shareholdings, as well as in those which have the transfer of a company or a branch of it as their object, the indication of a purely symbolic price is fully legitimate: without necessarily referring to the case of the nummo uno sale or donation, the indication of a symbolic price is justified for the sole purpose of taxation of the deed, where the consideration is identified on a case-by-case basis, by the magnitude of the debts which are transferred with the company, or by a non-pecuniary interest of the transferee. A distinction must be made between free and paid transactions, but also between the concepts of gratuity and donation.