Shareholders loans: when are shareholders’ obligations triggered?

With the judgement issued on June 15, 2017, the Court of Milan stated that if the shareholders’ meeting resolved to allow the company to enter into a shareholder loan agreement, the shareholder’s consent expressed in the meeting would not be sufficient on its own to trigger the shareholder’s obligation to provide cash as the lender.

As such, a specific and separate statement, set forth in a different document or made during the meeting, is necessary.

The reason for this is that the shareholders’ meeting approves the loan only on the behalf of the company as the borrower; therefore, the shareholder’s favorable vote cannot replace the separate and specific approval by the shareholder as a lender, which is a requirement.

The judgment is available at the following link:

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