COVID-19 and shareholder loan repayment – Commentary

Under Articles 2467 and 2497 quinquies of the Civil Code, the repayment of shareholder loans to a company and the repayment of loans granted by companies belonging to the same group are deferred until the repayment of the other creditors of the company if:

  • there is an excessive imbalance between the indebtedness of the financed enterprise and its own funds; Where
  • the financial situation of the financed company would be better improved by a capital increase than by a loan.

In addition, if a company repays a loan to its shareholders within a year of bankruptcy, the shareholders must repay that amount through bankruptcy proceedings.

The logic of such provisions is to encourage shareholders of companies to finance them through capital contributions rather than loans, which are qualified as debt and must be repaid by the companies.

However, in light of the COVID-19 emergency, Article 8 of Legislative Decree 23/2020 (the Liquidity Decree) suspended the above standards regarding the postponement of shareholder loans made between 9 April 2020 and December 31, 2020. This rule is added to Articles 6 and 7 of the liquidity decree, which suspend the rules of the Civil Code relating to the capital increase in the event of a company’s balance sheet losses.

Thus, the liquidity decree offers shareholders a more flexible approach to financing a company during the exceptional financial crisis linked to the COVID-19 emergency in order to avoid discouraging the use of shareholder loans.

For more information on this topic, please contact Antonio Grieco or Eugenio Vaccari at Grieco e Associati by phone (+39 06 420 3881) or email ([email protected] Where [email protected]). The Grieco e Associati The website can be accessed at

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