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Italian corporate law: Purchase of shares of a limited company (S.r.l.) and limitation period for the purchaser's compensation claims

Company law

Italian corporate law: Purchase of shares of a limited company (S.r.l.) and limitation period for the purchaser's compensation claims

In a judgment of the Court of Florence of March 10, 2023, an important principle was confirmed with regard to the limitation period for the purchaser's indemnity claims when selling shares in a public limited company.

In a purchase agreement about shares of a limited company, the clause whereby the seller undertakes to indemnify the purchaser against contingent liabilities in the company's assets relates to an ancillary service and therefore does not fall within the scope of the warranty under Article 1497 of the Italian Civil Code. Therefore, the buyer's right to compensation based on the said clause is not subject to the one-year limitation period of Articles 1495 and 1497 of the Civil Code, but to the ordinary ten-year limitation period.