{"id":4031,"date":"2025-10-13T09:42:58","date_gmt":"2025-10-13T09:42:58","guid":{"rendered":"https:\/\/www.italyvisainvestments.com\/?page_id=4031"},"modified":"2026-04-23T06:58:39","modified_gmt":"2026-04-23T06:58:39","slug":"company-demerger","status":"publish","type":"page","link":"https:\/\/www.italyvisainvestments.com\/en\/corporate\/company-demerger\/","title":{"rendered":"Company demerger"},"content":{"rendered":"
Investiments and Real Estate<\/div>\n

Company Demerger: Comprehensive Guide to the 2025 Procedure<\/h1>\n
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The company demerger is one of the most important corporate reorganization operations, used to separate business divisions, reallocate assets, or simplify the corporate structure in view of new market strategies. It consists of splitting the assets of a company (the demerged company), which are transferred in whole or in part to other companies\u2014either existing or newly incorporated (the beneficiary companies)\u2014with the simultaneous allocation of shares or quotas of the beneficiaries to the shareholders of the demerged company.<\/p>\n

This complex transaction results in the division of a single corporate asset and shareholder base into multiple legal entities, ending the patrimonial unity without causing extinction or liquidation in the strict sense, but rather leading to a contractual continuation in new structures.<\/p>\n

Proper management of the demerger procedure is crucial, as it involves sensitive legal, accounting, and tax aspects requiring prior analysis and rigorous strategic planning to protect shareholders and creditors. Carrying out a company demerger without expert legal guidance, especially in international contexts or in specific cases such as a demerger by contribution, can expose the company to significant risks. The Boschetti International Law Firm<\/strong> provides the necessary assistance to navigate the complexity of this process, ensuring that each stage of the demerger is successfully completed in full compliance with applicable laws.<\/p>\n<\/div>\n

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Types of company demerger<\/h2>\n
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Company demerger operations have recently been subject to several European legislative reforms aimed at harmonizing legal frameworks and promoting the freedom of establishment within the European Economic Area, particularly through Directive (EU) 2019\/2121<\/strong>, implemented in Italy by Legislative Decree No. 19 of 2 March 2023<\/strong>, which amended Directive (EU) 2017\/1132<\/strong>.<\/p>\n

One noteworthy innovation is the introduction of the concept of partial demerger<\/strong> under Article 160-ter(1)(4)(b)<\/strong> of Directive (EU) 2017\/1132. A partial demerger occurs when the demerged company transfers only part of its assets and liabilities to one or more beneficiary companies, in exchange for the allocation of shares or quotas of either the beneficiary companies or the demerged company itself, or both, to its shareholders. This form differs from the total demerger<\/strong>, in which all the company\u2019s assets and liabilities are transferred to one or more beneficiaries, resulting in the extinction of the demerged company.<\/p>\n<\/div>\n

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Moreover, Article 160-ter(1)(4)(c)<\/strong> introduces the notion of a demerger by contribution<\/strong>, which has been transposed into Article 2506.1 of the Italian Civil Code<\/strong> by Legislative Decree 19\/2023. Under this new provision, a company (the demerged company) may transfer part of its assets and liabilities in exchange for shares or quotas of the beneficiary companies that are assigned to the demerged company itself<\/strong>.<\/p>\n

A further innovation was introduced by Legislative Decree No. 88\/2025<\/strong>, which amended Article 2506.1 of the Civil Code to allow the transfer of all or part of the assets to one or more companies, whether newly formed or pre-existing.<\/p>\n

The distribution of shares may also occur through proportional<\/strong> or non-proportional (asymmetric)<\/strong> demergers, depending on whether the participations in the beneficiary companies are allocated to the shareholders of the demerged company in proportion to their original holdings or not. A non-proportional demerger, if not approved unanimously, grants dissenting shareholders the right of withdrawal.<\/p>\n

Finally, demergers can be homogeneous<\/strong> (between companies of the same type) or heterogeneous<\/strong> (between companies of different types, for instance, a general partnership demerging into a limited liability company), which also entails a transformation of the demerged company. Current legislation also extends these rules to partnerships and other non-corporate entities<\/strong>.<\/p>\n<\/div>\n

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Reasons and advantages of the demerger<\/h2>\n
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A company demerger serves various strategic purposes aimed at restructuring and maximizing corporate value. It is a key instrument for corporate reorganization. One main reason is the need to separate different business activities, isolating divisions with distinct growth potential or risk profiles, to make them more attractive to specific investors or to optimize management. For example, a partial demerger<\/strong> may extract a real estate branch from a company and transfer it to a new entity, allowing the main business to continue in the demerged company.<\/p>\n

From a growth perspective, a demerger may improve productivity and strengthen the company\u2019s competitive position internationally, aligning with EU goals to facilitate cross-border operations<\/strong>. The demerger also offers operational advantages by enabling greater clarity and managerial focus across separate business units.<\/p>\n

A further advantage lies in the principle of tax neutrality<\/strong> applied to extraordinary transactions within the EU. This principle ensures that a demerger does not trigger immediate taxation on unrealized capital gains (the so-called roll-over regime<\/strong>), provided the operation is justified by valid economic reasons, such as restructuring or rationalization, and not primarily aimed at tax evasion or fraud. This tax neutrality is a key factor making both total and partial demergers financially efficient tools for corporate reorganization.<\/p>\n<\/div>\n

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Demerger procedure: operational phases<\/h2>\n
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The procedure for a company demerger, similar to that for a merger, consists of several stages designed to ensure transparency and protect all parties involved. Although much of the legal framework mirrors that of mergers, it unfolds in three main steps: the demerger plan<\/strong>, the shareholders\u2019 resolution<\/strong>, and the execution deed<\/strong>.<\/p>\n

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  1. Preparation and publication of the demerger plan: <\/strong>The directors of each participating company must prepare a detailed demerger plan setting out the terms and conditions of the transaction, including the identification details of the companies, the share allocation criteria, any non-proportional demerger clauses, and the accounting date from which operations are to be recorded. This plan must be filed with the Companies Register (or published on the company\u2019s website) at least 30 days before<\/strong> the shareholders\u2019 meeting.<\/li>\n
  2. Approval of the demerger: <\/strong>The demerger must be approved by an extraordinary shareholders\u2019 meeting<\/strong> of each company involved, using the majorities required for amendments to the articles of association. For partnerships (such as general partnerships), the majority is calculated according to each partner\u2019s share of profits. In limited liability companies and joint-stock companies, standard voting majorities apply. Shareholders who disagree may exercise their right of withdrawal<\/strong> in specific cases, such as in a heterogeneous or cross-border demerger.<\/li>\n
  3. Execution and registration of the demerger deed:<\/strong>The process concludes with a notarial deed. The transaction may be executed only after 60 days<\/strong> (or 30 days, if no joint-stock company is involved) from the registration of the last resolution, allowing creditors to object. The final registration of the deed with the Companies Register (that of the beneficiary or resulting company) gives the demerger constitutive effect<\/strong>. Cross-border demergers also require a preliminary certificate<\/strong> confirming compliance with legal obligations.<\/li>\n<\/ol>\n<\/div>\n
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    Required documentation<\/h2>\n
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    To ensure transparency, the demerger procedure requires documentation similar to that used for mergers. The main document is the demerger plan<\/strong>, prepared by the directors, which must include details such as the type and registered office of the companies involved, the draft articles of incorporation of the beneficiaries, the share exchange ratio, and the effective date for accounting and profit allocation.<\/p>\n

    In addition, the following supporting documents are required (though they may be waived in simplified cases such as demerger by contribution):<\/p>\n

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    1. Statement of assets and liabilities:<\/strong> An updated financial statement not older than 120 days before filing the plan, providing creditors with the information necessary to exercise their rights.<\/li>\n
    2. Directors\u2019report:<\/strong> A legal and economic explanation of the demerger plan, including the criteria used to determine the share exchange ratio and any significant post-publication changes.<\/li>\n
    3. Experts\u2019report:<\/strong> An independent expert or auditor must assess the fairness of the share exchange ratio and the valuation methods used.<\/li>\n<\/ol>\n

      All documentation, including the last three annual financial statements, must be made available at company offices (or online) for shareholders at least 30 days<\/strong> before the meeting. Unanimous consent allows for certain reports to be waived.<\/p>\n<\/div>\n

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      Civil law aspects<\/h2>\n
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      The civil law aspects of a demerger define its legal nature and effects. It is considered an amendment to the articles of association. Upon the final registration with the Companies Register, all assets and liabilities of the demerged company are universally transferred<\/strong> to the beneficiaries. The shareholders of the demerged company receive shares or quotas in the beneficiaries according to the established exchange ratio.<\/p>\n

      Creditor protection is crucial: creditors have 60 days<\/strong> (or 30 for non-joint-stock companies) to object. The demerger cannot proceed if objections are made unless adequate guarantees are provided or the court authorizes continuation.<\/p>\n

      For partnerships, unanimous consent is no longer required; a majority vote based on profit participation suffices. Dissenting partners have the right of withdrawal. In capital companies (e.g., SRLs), the decision falls under the extraordinary meeting. Notably, in demergers by contribution<\/strong>, dissenting shareholders cannot withdraw, since the beneficiary\u2019s shares remain with the demerged company itself. Once effective, the demerger cannot be invalidated, though shareholders and third parties may seek damages<\/strong>.<\/p>\n<\/div>\n

      Accounting aspects<\/h2>\n
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      Accounting management of the demerger ensures transparency and continuity for the beneficiary companies. Operations are recorded in the beneficiary\u2019s accounts from a specific date, often retroactively to the start of the fiscal year for simplicity, as indicated in the demerger plan.<\/p>\n

      Transferred assets and liabilities are generally recorded at the book values of the demerged company as of the effective date. However, discrepancies may arise, resulting in a demerger deficit<\/strong>, which occurs when the value of the shares assigned exceeds the net value of transferred assets, or when the beneficiary already held shares in the demerged company acquired at a higher cost.<\/p>\n

      The law allows for revaluation of the transferred assets to reflect hidden reserves, with any remaining difference recognized as goodwill. Proper handling of these accounting elements is essential for compliance and accuracy.<\/p>\n<\/div>\n

      Tax aspects<\/h2>\n
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      The tax regime for demergers follows the principle of neutrality<\/strong>, particularly for cross-border operations within the EU, as established by Directive 90\/434\/EEC<\/strong>, later amended by Directive 2009\/133\/EC<\/strong> and transposed into Italian law. The goal is to prevent immediate taxation compared to domestic transactions.<\/p>\n

      This means that no tax is levied on unrealized capital gains stemming from the difference between the market value and the fiscal value of transferred assets, provided that the beneficiary continues to use the same depreciation and valuation criteria as the demerged company. The neutrality also applies to shareholders: receiving shares in the beneficiary company in exchange for those of the demerged company does not<\/strong> generate taxable income or capital gains.<\/p>\n

      However, member states may deny the benefit of this regime if the operation\u2019s main purpose is tax evasion or avoidance<\/strong>. Lack of valid economic reasons, such as restructuring or rationalization, may constitute a presumption of fraud.<\/p>\n

      Recent cross-border regulations have strengthened transparency obligations: in cases of outbound cross-border demergers<\/strong>, where an Italian company transfers its seat abroad, proof must be provided that all public debts are satisfied and that state aid received in the preceding five or ten years has been declared, as required for the issuance of the preliminary certificate<\/strong> under Directive (EU) 2019\/2121 and Legislative Decree 19\/2023.<\/p>\n<\/div>\n

      How the Boschetti International Law Firm can be helpful for Company Demergers in Italy<\/h2>\n

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      In the field of foreign real estate investments in Italy<\/strong>, proper corporate structuring is essential for asset protection and efficiency. The Boschetti International Law Firm<\/strong>, with extensive experience in cross-border corporate transactions such as demergers, assists investors in creating and reorganizing corporate vehicles for property acquisition and management.<\/p>\n

      Total or partial demergers allow for the separation of real estate assets from operational activities, enabling clearer management and targeted asset protection. In international settings, these processes require the coordinated application of Italian and foreign laws\u2014a complex balance that the Boschetti Firm ensures through its expertise in corporate and tax law.<\/p>\n

      The law firm\u2019s assistance also includes the preparation of documents for legality checks and preliminary certification, now reinforced under Italian law. This ensures that foreign investors benefit from a fully compliant process, minimizing litigation risks and maximizing the return on their real estate investments in Italy.<\/p>\n<\/div>\n


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      Investiments and Real Estate Company Demerger: Comprehensive Guide to the 2025 Procedure The company demerger is one of the most important corporate reorganization operations, used to separate business divisions, reallocate assets, or simplify the corporate structure in view of new market strategies. It consists of splitting the assets of a company (the demerged company), which […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":3430,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":""},"class_list":["post-4031","page","type-page","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/pages\/4031","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/comments?post=4031"}],"version-history":[{"count":5,"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/pages\/4031\/revisions"}],"predecessor-version":[{"id":5436,"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/pages\/4031\/revisions\/5436"}],"up":[{"embeddable":true,"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/pages\/3430"}],"wp:attachment":[{"href":"https:\/\/www.italyvisainvestments.com\/en\/wp-json\/wp\/v2\/media?parent=4031"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}