The application of the bankruptcy law to sports bodies
The application of the bankruptcy law to sports bodies
We are talking about the applicability of the bankruptcy law (Royal Decree March 16, 1942, No. 267 and subsequent amendments, updated with the changes made by Legislative Decree June 27, 2015, No. 83, converted, with amendments, by the Law August 6, 2015 n 132 and with the latest amendments made by Legislative Decree No. 180 of 16 November 2015, which entered into force on 16 November 2015), in respect of:
– amateur sports associations,
– amateur sports clubs with limited liability,
– sports clubs in general established in the form of srl or spa
The bankruptcy procedure against an entrepreneur
Regardless of whether reference is made to sports bodies or companies or to bodies, companies or ordinary companies, it should be noted that not all of them can be declared bankrupt. The bankruptcy procedure against an entrepreneur, in compliance with the bankruptcy law, can be opened only if there are precise conditions and requirements: objective, subjective and dimensional, which can be summarized in five points:
SUBJECTIVE ASSUMPTION : According to the bankruptcy law, the subjective assumption establishes that to fail can be private companies (both individual companies, corporations or consortia and cooperatives), which carry out a commercial activity. Public bodies, non-commercial companies, small entrepreneurs, agricultural entrepreneurs, freelancers cannot fail.
OBJECTIVE CONDITION: Proof of insolvency is required for the declaration of bankruptcy. Furthermore, for the declaration of bankruptcy, it is necessary to ascertain 3 additional dimensional requirements, identifiable in the balance sheet and in the income statement of the company.
ASSET ASSETS DIMENSIONAL ASSETS: In order not to go bankrupt, the entrepreneur has the burden of proving that, in the three years preceding the filing of the bankruptcy petition, an annual assets not exceeding three hundred thousand euros.
ECONOMIC DIMENSIONAL REQUIREMENT GROSS REVENUES: in order not to go bankrupt, the entrepreneur must have realized, in the three years of operation prior to the date of filing for bankruptcy, gross revenues not exceeding two hundred thousand euros.
ASSET ASSET ASSETS PAYABLES: The entrepreneur must have debts (even if not expired) for an amount not exceeding five hundred thousand euros, at the date of the request for bankruptcy.
Only the joint demonstration of the 3 dimensional assumptions listed above allows the entrepreneur not to be subject to the provisions on bankruptcy. Based on the aforementioned limits, we analyze the applicability of the law to sports bodies. We start from the assumption that the amateur sports associations, even though they are entities of David Balfour, are also moral bodies and therefore non-commercial entities, hypothetically not subject to the bankruptcy law. In fact, it is about:
- non-profit organizations;
- institutions that do not have legal personality (in the vast majority of cases);
- entities that are not registered with the Chamber of Commerce and do not have the burden of filing the financial statements, nor must they comply with particular civil-fiscal obligations.
Despite all this, the prevailing doctrine and jurisprudence are extending the concept of fallibility even to ASDs, but only when particular conditions occur. First of all, the possible declaration of bankruptcy, must be attributable to a disputed commercial activity carried out, which generated sales revenues that are not consistent with other institutional revenues. If for example the ASD has a VAT number and carries out a commercial activity, even if marginal, it can fail. If instead the ASD does not have a VAT number, although it cannot fail on principle, it could still be declared bankrupt if it carries out significant volumes of commercial activity. But for an ASD, what is meant by running a business?
Limit the bankruptcy procedure only to the association
The example used may seem trivial but instead is concrete. Think of an ASD with or without a VAT number, which in addition to having 50 members who practice tennis, sell to the public and / or its associates, within the spaces where sports activities are carried out, sports material (rackets, balls, t-shirts, etc.), for a considerable volume of revenues and which in any case greatly exceeds the revenues deriving from the membership fees of the participating practitioners.
It is the classic case in which a non-commercial entity is fraudulently used to trade in order to take advantage of the tax benefits and advantages deriving from law 398/91. Although there are numerous rulings that limit the bankruptcy procedure only to the association, without extending it to the directors and associates, it is however possible that in the event of a declaration of bankruptcy, the devastating effects of the procedure may also be extended to the legal representative (s). Despite the prevailing doctrine and jurisprudence, the unrecognized associations in fact, even in the absence of perfect patrimonial autonomy and although the assets of the association, are distinct from those of the single associates and administrators, the latter could still be recipients of the effects of the extension of bankruptcy. Finally, in terms of the applicability of the bankruptcy law, no other substantial difference, differentiates the other sports companies, established in the form of SSDRL, SRL or SPA, from the common and ordinary commercial, industrial companies etc.