The S.r.l. shareholder cannot be excluded if in arrears in the subscription of the company capital increase
The Italian Supreme Court with the ruling number 1185 of the last 23rd of January has stated that, under art. 2466 of the civil code, the S.r.l. shareholder holding the quota starting from the company incorporation cannot be excluded from the company if she is in arrears in the execution of the payments following the subscription of the company capital increase. Here, the shareholder had fully subscribed and paid 25% of the quota capital, but not the remaining 75%.
Due to her failure, according to the above art. 2466, the directors:
- firstly, requested for the payment of the missing quota, and then
- deliberated the sales of her entire capital participation.
In the absence of buyers, they excluded the shareholder and withheld the sums collected. The shareholders meeting reduced the capital by the amount corresponding to the shareholders entire company participation.
The Court of Cassation confirmed that the art. 2466 of the civil code also applies if the shareholder’s debt derives from the (non-subscription) of the share of the increasing capital. Its aim, in fact, is preserving the effectiveness of the share capital.
In the case in question, however, the Court deemed unlawful the exclusion of the shareholder and the reduction of the share capital equal to:
- the quota originally subscribed, and
- the share remained unfulfilled (following the subscribed capital increase).
The shareholder, although she was defaulter for a share of the capital, was in any case owner of a shareholding (fully paid up) since the company was established. Consequently, the shareholders’ meeting should have reduced the share capital only for the amount corresponding to the subscription debt, without any prejudice for the fully paid shareholder company participation. On the contrary, the entire capital reduction should have been deliberated if shares were indivisible according to the articles of association (but here the shares were divisible).
Finally, regarding the issue of which rights the defaulting shareholder is entitled of, the Court reiterated that a shareholder is not allowed according to art. 2466 of the civil code, to exercise voting rights. However, a shareholder maintains the right to control corporate affairs, pursuant to art. 2476, paragraph 2, of the civil code, as long as she remains part of the corporate structure.
