Italy's Court of Cassation rules on shareholder fund withdrawals

The Italian Court of Cassation has clarified the legal boundaries regarding shareholders withdrawing funds from companies facing potential bankruptcy. According to ruling n. 31401 of 2026, a strict distinction must be made between legitimate loan repayments and capital contributions intended to strengthen a company's equity.

Only funds classified as formal loans generate a valid, enforceable credit for the shareholder. In contrast, capital contributions are subject to business risk and cannot be reclaimed. If a shareholder-administrator withdraws funds categorized as capital contributions during a liquidity crisis, it may be legally classified as a distributive conduct that harms other creditors.