Shareholder loans to the company: when can repayment become a problem?
The rules
Art. 2467 of the Italian Civil Code provides that the repayment of loans made by shareholders to the company is subordinated to the satisfaction of the other creditors where such loans, «in whatever form made», were granted at a time of excessive imbalance between indebtedness and equity, or in a financial situation in which a capital contribution would have been reasonable.
The provision seeks to prevent shareholders from shifting the economic consequences of the business onto the company's creditors by resorting to debt rather than risk capital, thereby avoiding the risk they ought to bear by reason of their shareholding (Italian Supreme Court no. 13672/2026).
As regards its personal scope, although the rule is expressly laid down for limited liability companies (S.r.l.), it also applies to loans made by whoever exercises management and coordination activity, pursuant to art. 2497-quinquies of the Civil Code, and, according to case law, to closely held joint-stock companies (S.p.A.) where conditions substantially comparable to those of an S.r.l. are present (Italian Supreme Court nos. 14056/2015 and 16291/2018).
The interpretation of these rules has developed mainly along three lines: the operation of subordination outside insolvency proceedings as well, the broadening of the notion of loan, and the identification of the timing and evidentiary requirements of the financial and equity imbalance. The 2026 rulings of the Italian Supreme Court have most recently addressed these issues.
Subordination also applies while the company is a going concern
A first, now well-established line of case law concerns the nature of subordination. Having moved beyond the view that limited its effects to insolvency proceedings alone, the courts have recognised that the provision has substantive effect, affecting the enforceability of the shareholder's claim during the company's ordinary course of business as well.
The principle, laid down by Supreme Court no. 12994 of 15 May 2019 and subsequently reaffirmed by Supreme Court no. 15196 of 30 May 2024, was confirmed by Supreme Court no. 18680 of 8 July 2025, according to which subordination constitutes a «statutory and temporary condition of unenforceability of the right to repayment of the loan», which persists until the situation of economic and financial difficulty justifying its application has been overcome.
It follows that, where the requirements of art. 2467 of the Civil Code are met, the company not only may, but must, refuse the repayment requested by the shareholder. Directors who nonetheless repay the sums may therefore be held liable for the damage caused to the company and to its creditors, as pointed out by Supreme Court no. 18680/2025 itself. Should judicial liquidation subsequently be opened, art. 164, para. 2, of the Business Crisis and Insolvency Code (CCII) also applies, rendering ineffective any repayments made after the filing of the application that led to the opening of the proceedings or in the year preceding it.
Subordination is, however, temporary in nature: once the imbalance ceases, the claim becomes enforceable again. Moreover, from a procedural standpoint, the court may raise the condition of unenforceability of its own motion, even where the company has not specifically pleaded it, provided that the relevant requirements emerge from the evidence duly admitted in the proceedings.
The broadening of the notion of loan
The recognition that subordination has substantive effect makes it particularly important to define the notion of loan relevant for the purposes of art. 2467 of the Civil Code.
Case law has given a broad meaning to the words «in whatever form made», placing the economic function of the transaction ahead of its formal classification. Along these lines, Supreme Court no. 3017/2019 brought within the scope of the provision any act involving a transfer of value coupled with an obligation of future repayment. A similar approach was taken by the Court of Milan (judgment no. 5537/2023), which emphasised the breadth of the provision, holding it capable of covering claims arising from voluntary acts or conduct of the shareholder, regardless of the contractual arrangement used.
This interpretation was further developed by Supreme Court no. 30054 of 30 October 2023, which also brought within the scope of the rules the security interests and personal guarantees given by the shareholder. Case law has also attached relevance to supplies made without consideration, identifying as the common feature of the various cases the voluntary economic contribution that allows the company to avoid incurring a cost immediately.
The same substantive test has been applied to intra-group relationships. With order no. 18599 of 8 July 2025, the Italian Supreme Court also brought within the scope of subordination downstream loans granted by the parent company to the subsidiary through another group company, ruling out that the use of an intermediate entity may circumvent the rules. With order no. 22166 of 31 July 2025, it then clarified that, for the purposes of art. 2497-quinquies of the Civil Code, it is sufficient that management and coordination activity be exercised, without any need to prove that it was abusive, which is relevant instead to the separate matter of liability for damages.
A notion of loan has thus gradually become established that rests not so much on the legal structure of the transaction as on its actual economic effect for the company's benefit. It is precisely along this line that the most recent 2026 rulings are situated.
Financial and equity imbalance as a requirement for subordination
The breadth of the notion of loan does not, however, entail the automatic subordination of every claim held by the shareholder. The application of art. 2467 of the Civil Code remains subject to the conditions laid down in para. 2: an excessive imbalance between indebtedness and equity, or a financial situation in which a capital contribution, rather than a loan, would have been reasonable.
The assessment must be carried out on a case-by-case basis, taking into account the characteristics of the business carried on and the company's economic, equity and financial position. From this perspective, case law has also given weight to the risk of insolvency and to the company's difficulty in obtaining credit from third-party lenders on comparable terms.
The point in time at which the imbalance is to be assessed has been particularly debated. An initial line of case law, expressed inter alia by Supreme Court no. 17421 of 20 August 2020, attached exclusive relevance to the conditions existing when the loan was granted, ruling out that a subsequent deterioration of the company's financial position could lead to the subordination of a loan that was not originally subject to the rules.
Subsequent case law has gradually given weight also to the situation existing when repayment is requested. The Court of Milan, in judgments nos. 3621/2014 and 5537/2023, and the Italian Supreme Court, in order no. 18680/2025, had already ruled to this effect, stressing the need to verify whether the imbalance still persisted at the time of the decision.
The relevance attached to the company's current financial position has thus paved the way for recognising subordination even where the imbalance arises at a later stage, in line with the approach subsequently made explicit by the Italian Supreme Court in 2026.
As regards evidence, it remains the case that the burden of proving the relevant requirements lies with the company invoking subordination. The assessment must nonetheless take into account the overall economic and financial picture, rather than being confined to individual balance sheet indicators considered in isolation.
The 2026 rulings of the Italian Supreme Court
The 2026 orders fit within the interpretative path described above, further clarifying the notion of loan, the relevance of a supervening imbalance, the evidentiary criteria, and the relationship between subordination and security for the claim.
With order no. 5582 of 12 March 2026, the Italian Supreme Court first reaffirmed that the notion of loan is not confined to traditional credit agreements, but also covers a personal guarantee (fideiussione) given by the shareholder in the company's interest. The ruling is also particularly significant as regards timing, since it recognises that subordination may apply where the imbalance arose after the loan was granted, provided that the situation of difficulty persists when the shareholder requests repayment. This conclusion follows from the classification of subordination as a statutory and temporary condition of unenforceability, the purpose of which is to prevent repayment of the loan where it could prejudice external creditors.
As regards evidence, the order confirmed that the burden of proving the requirements for subordination lies with the company, while specifying that the court must assess all the evidence put forward and admitted in the proceedings as a whole. Indicators of financial difficulty that do not in themselves amount to an equity imbalance, such as a lack of liquidity, may also be relevant. The Court also referred to the principle of continuity of financial statements, under which an imbalance established in one financial year may be presumed to persist in the following one, unless it is shown that the causes that gave rise to it have been overcome.
A further development came with order no. 13672 of 11 May 2026, which also brought within the notion of loan the letting of a property by the shareholder to the company, where the failure to collect the rent amounts to a voluntary economic contribution that benefits the company, allowing it not to bear the related cost immediately.
The decision therefore confirms that the classification of the transaction must depend on its actual economic effects: even a relationship formally different from a loan agreement may qualify as a loan relevant for the purposes of art. 2467 of the Civil Code, where it provides a form of financial support to the company.
In the same order, the Italian Supreme Court also reaffirmed that subordination applies to company types other than the S.r.l., where the entity's structure or the position actually held by the shareholder makes the latter's situation substantially comparable to that of a shareholder in a limited liability company.
Lastly, the Court ruled on the relationship between subordination and security interests, clarifying that the existence of a ground of priority does not allow the shareholder to escape subordination to external creditors. The security may be relevant only as between equally subordinated creditors, without altering the order of satisfaction imposed by art. 2467 of the Civil Code.
Conclusions
The 2026 rulings confirm the gradual consolidation of a substantive and functional interpretation of the subordination of shareholder loans.
The rules do not operate only in insolvency proceedings, but affect the enforceability of the claim during the life of the company as well. Moreover, their scope is not limited to traditional lending transactions, as it may cover any voluntary economic contribution by the shareholder that allows the company to defer incurring a cost, provided that the statutory requirements are met.
At the same time, the assessment of the imbalance takes on a dynamic dimension: what matters is not only the conditions existing when the loan was granted, but also those arising subsequently and persisting when repayment is requested, as clarified by the most recent case law.
It follows that the legal form chosen by the shareholder to provide financial support to the company is not, in itself, decisive. The provision of guarantees, the failure to collect rent or the use of intra-group transactions may result in the claim being subordinated, without the existence of a security interest granting the shareholder a preferential position vis-à-vis external creditors.
For directors, this interpretative development reinforces the need for a careful and documented assessment of the company's economic, equity and financial position before making any repayment. Repaying a loan where the requirements for subordination are met may in fact give rise to liability for damages and, should judicial liquidation follow, to the ineffectiveness of the payment under art. 164, para. 2, CCII, if made within the period laid down by that provision.
Subordination is therefore confirmed not merely as a criterion for ranking claims, but as a tool for protecting the integrity of the company's assets and the interests of external creditors, designed to prevent business risk from being improperly shifted from shareholders to third-party lenders.
