In some countries Factoring is used with a series of legal instruments within the legal system; in some others it hasn't yet had a concrete recognition, in fact the relationship between Factor and companies refers to pre-existing legal figures.
Until 1991, the only legal instruments in ltaly were the Law art.1260 et seq. of the Civil Code, and for the credit assignment regulation towards Public Bodies, the Royal Decree n. 2440, November 18, 1923 (art. 69 and 70). The Law N. 52/1991 of February 21, 1991 legally regulated the professional purchase of pecuniary corporate credits towards a consideration; among the most significant regulations we underline, those which concern the possibility of purchasing future credits and those whose object is the effect vis-à-vis third parties assignment.
From the Royal Decree n. 2440 of November 18, 1923 ,art. 69
Any assignment, delegation, pledging, garnishment, seizure and opposition to the payment of sums owed to the State, approved by the law, must be notified to the central administration, that is to say, to the body, office or official that is responsible for the payment order. The notification doesn't have any effect on already issued payment orders.
The creditor can do this notification to the official, treasurer or to the person that is responsible for the payment of orders or for the issue of cheques art. 54 letter a). The assignments, delegations, pledging, withdrawal documents, renunciation or modification of constraints must appear in the official document or in the private agreement, authenticated by a notary public. Pledging, seizures and oppositions are effective only if they are made in the ways and in the cases expressly provided for in law. No impediment could be constituted through simple inhibitory measures or injunctions. If an entitled State administration demands the deferment of payment, this has to be executed waiting for the final order.
From the Royal Decree n. 2440 of November 18, 1923 ,art. 70
The acts taken into consideration in the article 69, must indicate the title and the object of the credit payable to the State that shall be directed upon, assigned or delegated. It is impossible to direct, assign or delegate credits to different administrations with a single act. For what concerns the sums payable to the State for the administration, supplies and contracts, the provisions of Article 9, annex E of the Law n. 2248 March 20, 1865 and of articles 351 and 355, annex F of the same Law have to be respected.
Art. 9 annex E Law n. 2248 March 20, 1865
Any seizure or assignment could not have effect on the price of outstanding contracts if the administration concerned does not adhere to it.