La Disciplina della Crisi d’Impresa in Italia: Operational Guide for CEOs and CFOs of SMEs

How to manage corporate crisis according to the Italian Corporate Crisis Code: obligations, responsibilities and recovery tools

From the point of view of a CEO of an Italian SME, corporate crisis management is today a strategic issue that requires in-depth knowledge of regulations and prompt action. Below is an overview updated to 2025, focusing on obligations, risks and operational tools useful to anticipate or manage a state of crisis.

The regulatory evolution: from Legislative Decree 14/2019 to amendments 2023-2024

The Corporate Crisis and Insolvency Code (CCII, Legislative Decree 14/2019, which came into force on 15 July 2022) rewrote the regulation of insolvency proceedings, introducing three key principles: prevention through the obligation to set up organisational arrangements to detect the crisis in a timely manner (arts. 3 and 2086 c.CCII), negotiation through the introduction of the negotiated crisis resolution (Arts. 12-25 CCII) as an out-of-court tool guided by an independent expert, and specialisation with the distinction between procedures for ‘bankrupt’ and ‘non-bankrupt’ companies such as minor companies under Art. 2 CCII.

In 2024, Legislative Decree 136/2024 (third corrective) came into force, which confirmed the tax falcidia in arrangements and restructuring agreements (Art. 63 CCII), strengthened the cram-down towards the Treasury and INPS with the possibility of approving plans even without their consent if more convenient than liquidation, and extended the tax settlement also to the negotiated settlement phase (Art. 23, para. 2-bis CCII).

Alert obligations and negotiated settlement

Art. 13 CCII requires the entrepreneur to monitor crisis indicators such as asset or economic-financial imbalances, the impossibility of meeting debts in the next 12 months, and defaults towards banks, the tax authorities or INPS. The alerts provided for in Article 14 CCII come from the Internal Revenue Service for debts exceeding €200,000 towards SMEs, from INPS for debts exceeding €15,000 with more than 90 days of arrears, and from the Organismo di composizione della crisi (OCRI) active at each Chamber of Commerce.

The negotiated settlement, the so-called ‘pre-concordato’, is a voluntary, confidential and rapid instrument with a maximum duration of four to six months that allows to obtain protective measures such as the freezing of attachments under Article 18 CCII, negotiate with banks, tax authorities and suppliers, and avoid judicial liquidation.

The criminal and civil responsibilities of directors

Directors are personally liable if they do not initiate crisis procedures despite having indicators of insolvency (Art. 3 and 2086 CCII), if they fail to pay VAT or withholding taxes above the criminal thresholds set forth in Art. 10-ter and 10-bis of Legislative Decree 74/2000 (€250,000 for VAT, €150,000 for withholding taxes), and if they do not establish adequate control structures pursuant to Art. 3 CCII.

The Sentence Cass. Pen. 30109/2025 held that the offence of simple bankruptcy may be committed merely by continuing the activity beyond the limits, aggravating the bankruptcy without activating crisis instruments. In civil law, Article 2394 of the Civil Code allows creditors to take action against directors for mala gestio where the crisis was caused by inaction or omissive conduct.

The crisis indicators provided for by Article 13 CCII

The entrepreneur must constantly check prospective cash flows that are insufficient for the next 12 months, defaults on payments to banks, tax authorities and suppliers, loss of capitalisation with shareholders’ equity less than one quarter of the capital, production value and indebtedness compared to the sector average, using the checklist published by the Ministry on the Single National Platform provided for by Article 5-bis CCII.

The available reorganisation procedures

The negotiated settlement allows out-of-court reorganisation in the event of a reversible crisis with an enforcement freeze and a guarantee of confidentiality. The restructuring agreement governed by Article 57 CCII allows for negotiated approval by requiring the adhesion of 60% of creditors and also binds dissenters. The composition agreement governed by Art. 84 CCII applies in the event of insolvency with a credible plan and produces a moratorium with debt relief. The certified plan under Art. 56 CCII allows private agreements based on a sustainable plan with protection from revocatory action.

Recent case law (2020-2025)

The Criminal Supreme Court in judgement 30109/2025 ruled that the negotiated settlement can justify the rejection of precautionary seizures. The Civil Cassation with sentence 2867/2023 clarified that the failure to pay withholding tax in excess of €10,000 constitutes an offence pursuant to Article 2 of Legislative Decree 8/2016. The Civil Cassation with sentence 22441/2022 confirmed that the administrator is civilly liable if he does not activate crisis procedures despite the presence of indicators. The Court of Milan with its decision of 15 June 2023 approved an arrangement with tax cram-down to 50% of the tax debt.

Current news and outlook 2025

The Budget Law 2025 confirmed the ZES tax credit and extended the facilities for SMEs in crisis. Legislative Decree No. 136/2024, effective as of 28 September 2024, strengthened the simplified post-negotiated arrangement, extended tax transactions also with the Customs Agency, and established the single list of crisis professionals provided for in Article 356 CCII.

The over-indebtedness reform with the possible extension of controlled liquidation also to partnerships and the full implementation of the EU Directive 2019/1023 for the transposition of extended-effect agreements through the cram-down mechanism between classes of creditors are currently being finalised.

Operational conclusions for the SME CEO

One should not wait for strong signals but activate the negotiated settlement as soon as defaults or critical cash flow issues emerge. It is crucial to document every step including recovery plan, prospective flows, business continuity assessments and independent attestations. The immediate involvement of banks, tax authorities and INPS allows access to instalments, settlements and cram-down arrangements that are possible today. To avoid offences, it is necessary to monitor the VAT (€250,000) and withholding tax (€150,000) thresholds by paying even partial payments before the due dates. The protection of personal assets requires in S.r.l. to avoid personal guarantees, while in partnerships personal arrangement or controlled liquidation should be considered.

For more in-depth technical information and case studies, we recommend the Rivista Giuridica della Crisi published by Giuffrè and the Bank of Italy’s ADR Quaderni dedicated to reorganisation procedures.

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Frequently asked questions and answers on business crisis for SME CEOs

What is the Business Crisis Code and when did it come into force?

The Corporate Crisis and Insolvency Code (CCII) is Legislative Decree 14/2019 which came into force on 15 July 2022. This code has completely reformed the regulation of insolvency proceedings in Italy by introducing the principle of crisis prevention through obligations of continuous monitoring of company indicators, negotiated settlement as an out-of-court reorganisation tool, and mandatory organisational arrangements to detect difficult situations in a timely manner. The code applies to all commercial enterprises and provides for both civil and criminal sanctions for directors who fail to comply with the warning obligations.

What are the crisis indicators that I must monitor as an administrator?

Art. 13 of the CCII requires directors to constantly monitor financial or economic-financial imbalances, insufficient prospective cash flows for the next 12 months, defaults on payments to banks and suppliers, tax debts to the Inland Revenue exceeding €200,000, contribution debts to INPS exceeding €15,000 with more than 90 days’ delay, loss of capitalisation with net assets less than a quarter of share capital, and abnormal production value-indebtedness ratio compared to the sector average. The Single National Platform under Article 5-bis CCII provides an updated checklist to facilitate monitoring.

What does the negotiated crisis settlement entail?

The negotiated crisis settlement governed by arts. 12-25 CCII is a voluntary, confidential and rapid tool with a maximum duration of 4-6 months. It allows the entrepreneur to appoint an independent expert provided by the Chamber of Commerce to facilitate negotiations with creditors, obtain protective measures such as the freezing of attachments pursuant to Art. 18 CCII, negotiate instalments with the tax authorities and INPS, access tax settlements also in the preventive phase pursuant to Art. 23 co. 2-bis CCII, and avoid judicial liquidation. The procedure is confidential and is not published in the Companies Register.

What criminal liability do I risk as administrator if I do not manage the crisis correctly?

Administrators risk criminal convictions for simple bankruptcy if they prolong their activity aggravating the crisis without activating crisis instruments, as confirmed by Sentenza Cass. Pen. 30109/2025, for failure to pay VAT in excess of €250,000 under Article 10-ter of Legislative Decree 74/2000 with penalties ranging from 2 to 6 years, for failure to pay certified withholding taxes in excess of €150,000 under Article 10-bis of Legislative Decree 74/2000 with penalties ranging from 2 to 6 years, and for fraudulent bankruptcy of assets or documents with penalties ranging from 3 to 10 years under Articles 216-217 CCII. In addition to these penalties, there are accessory sanctions such as disqualification from public office, confiscation of assets and fines.

What does tax cram-down mean and how does it work?

Tax cram-down is the possibility introduced by Legislative Decree No. 136/2024 to approve preventive arrangements and restructuring agreements even without the consent of the Treasury and INPS, provided that the plan is more convenient than judicial liquidation. The cram-down allows for tax write-offs even of 40-50% of the tax debt as demonstrated by the decision of the Court of Milan of 15 June 2023 that approved an arrangement with a 50% reduction of the tax debt. This mechanism is provided for in Article 63 CCII and represents a powerful tool for corporate restructuring.

What is the difference between a composition agreement and a restructuring agreement?

The composition agreement governed by Art. 84 CCII is a bankruptcy procedure that requires the approval of the majority of creditors and the approval of the court, produces a general moratorium, allows for even significant debt write-offs, and is applied in situations of overt insolvency with a reorganisation or liquidation plan. The restructuring agreement governed by Article 57 CCII, on the other hand, is a negotiating instrument that requires the adhesion of at least 60% of the creditors, binds even dissenting creditors after approval, offers greater negotiating flexibility, and is generally applied in situations of reversible crisis with the possibility of maintaining business continuity.

How can I protect my personal assets during a corporate crisis?

To protect personal assets, it is essential in limited liability companies not to provide personal guarantees for corporate debts except when strictly necessary, not to mix personal and corporate assets, not to fictitiously assign corporate assets to family members or nominees, to document every management decision with minutes and professional certifications, to promptly activate alert and negotiated settlement tools, and to pay even partial VAT and withholding taxes to demonstrate good faith. In partnerships where unlimited liability applies, personal arrangement or controlled liquidation should be considered as means of protection.

What happens if I do not activate crisis procedures despite the presence of indicators?

Failure to activate crisis procedures in the presence of indicators entails civil liability pursuant to Article 2394 of the Civil Code with potentially multimillion-dollar compensations towards creditors and the company as confirmed by Sentence Cass. Civ. 22441/2022, criminal liability for simple bankruptcy with penalties of up to 5 years as established by Sentence Cass. Pen. 30109/2025, inability to benefit from the protective measures and tax settlements, aggravation of the bankruptcy with consequent reduction of the possibilities of recovery, and violation of the obligations of adequate organisational structures provided for by Articles 3 and 2086 of the Italian Civil Code with liability also towards shareholders and stakeholders.

What new features has Legislative Decree No. 136/2024 introduced?

Legislative Decree 136/2024, which came into force on 28 September 2024, confirmed the fiscal falcidia in arrangements and restructuring agreements according to art. 63 CCII, strengthened the cram-down mechanism towards the Inland Revenue and INPS allowing the approval of plans even without their consent if more convenient than liquidation, extended the fiscal transaction also to the negotiated settlement phase through art. 23 co. 2-bis CCII, introduced the simplified post-negotiated settlement to facilitate the transition from an out-of-court instrument to a homologated procedure, extended the transactions also to the Customs Agency, and established the single list of crisis professionals pursuant to Article 356 CCII.

When are alerts triggered by Agenzia delle Entrate and INPS?

The Agenzia delle Entrate triggers the alerts provided for by Article 14 CCII when the SME enterprise has tax debts exceeding €200,000 with certain characteristics of seniority and seriousness. INPS, on the other hand, reports crisis situations when tax debts exceed €15,000 and remain unpaid for more than 90 days. These alerts are sent to the Organismo di composizione della crisi (OCRI) at the competent Chamber of Commerce, which convenes the entrepreneur to assess the advisability of activating the negotiated settlement. The reports are not public and represent an opportunity for early intervention rather than a sanction.