Shareholder – director and double social security contribution
The Court of Cassation, in its ruling no. 5318/2025 of February 28, has clarified an important issue for Limited Liability Companies (S.r.l.): a shareholder-director can also be an employee of the same company, but the compatibility between the two roles must be assessed on a case-by-case basis. According to the judges, the status of shareholder-director is not incompatible with that of an employee, but this compatibility must be assessed concretely by determining the existence of a subordinate relationship and the specific tasks performed. The Court of Cassation reiterates that compensation for directorial duties is closely linked to managerial and representational activities, while other services must be recognized as separate and justified by a distinct employment contract. A fundamental aspect also concerns double social security contributions, which apply when the shareholder-director performs activities beyond mere managerial duties. The judgment clarifies that only when the individual performs “different” tasks from those of a director, carried out autonomously, is there a right to separate compensation and separate social security contributions.
(Cassazione, ruling no. 5318/2025)
Conflict of interest between the legal representative and the company in single-member limited liability compannies
In its ruling no. 10930/2025 of March 19, the Court of Cassation clarified that a conflict of interest exists even in single-member Limited Liability Companies (S.r.l.), between the legal representative and the company. The Court rejected the request for a review filed by the defense of a company under investigation for tax crimes, clarifying that even in sole-member limited liability companies, where the sole shareholder is also the director, a conflict of interest exists between the legal representative and the company. The Court emphasized that, although the company structure may resemble that of a sole proprietorship, it remains a legal entity distinct from the individual shareholder. Therefore, the blending of the roles of legal representative and shareholder cannot justify the exclusion of the conflict of interest. Furthermore, the Court reiterated that the defense counsel appointed by the legal representative cannot file a request for review on behalf of the entity when the entity itself is charged with the crime that triggered the administrative liability of the company.
(Cassazione, ruling no. 10930/2025)
Joint liability for directors and experts
On July 4, 2025, the Milan Court issued an order establishing that, in the event of non-performance by directors, individuals who do not hold corporate positions may also be held jointly liable for damages caused to the company. Specifically, this liability extends to those who, although not directors, have engaged in conduct that influenced the decisions of the directors, resulting in harm to the company’s assets. An example cited in the ruling concerns experts and appraisers of vintage cars, who, despite not having administrative functions, were involved due to their negligent conduct in selling assets below market value. The liability of these “outsiders” is assessed based on the diligence obligations set forth in Articles 1176 and 1218 of the Italian Civil Code, rather than on violations of statutory or legal duties typically associated with directors. Furthermore, the Court clarified that while directors are jointly liable for the entire damage, the liability of the experts is limited, as their contribution to the damage was considered a mere participation in a plan already approved by the directors. (Court of Milan, Order of July 4, 2025)
Corporate Liability action and shareholders’ meeting resolution
In its judgment no. 1798/2024, the Court of Turin addressed a crucial issue for limited liability companies (S.r.l.): the exercise of shareholder action for liability. Specifically, the Court clarified that even if the sole director holds the majority of the share capital (75%), a prior resolution of the shareholders’ meeting is still required to initiate a liability action against a former director, even if the latter is a minority shareholder with 25% of the capital. The Court’s decision is based on the principle that, although the sole director may have broad decision-making powers, they cannot act unilaterally without consulting the shareholders’ meeting, thus ensuring that significant decisions for the company are made transparently and in accordance with the procedures set forth in the company’s bylaws. The failure to convene the shareholders’ meeting and the making of unilateral decisions could result in the risk of losing the case for the company, which could face a lawsuit that could, in contrast, be brought independently by the majority shareholder.
(Court of Turin, Judgment no. 1798/2024)
Statutory clause for withdrawal at will in unlisted joint-stock companies
The Court of Cassation, in its judgment no. 2629 of January 29, 2024, upheld the legitimacy of a statutory clause providing for the so-called “withdrawal at will” in an unlisted joint-stock company (S.p.A.). This means that a shareholder may withdraw from the company at any time, without the need to provide a reason for their decision. The only condition imposed by the Court of Cassation is that such withdrawal must be subject to a reasonable notice period, the duration of which may be freely determined by the company’s bylaws (even up to one year). The Court annulled the previous ruling of the Court of Appeal of Cagliari, which had declared invalid an arbitration award that deemed the withdrawal at will clause invalid. The judgment reaffirms that, for unlisted joint-stock companies, Article 2437 of the Italian Civil Code allows for the inclusion of “additional causes of withdrawal,” including the possibility of allowing a withdrawal without justification, thus enabling the shareholder to freely divest their shares.
(Court of Cassation, Judgment no. 2629/2024)
Cross-border insolvencies
The Court of Bologna, in its judgment no. 14 of January 26, 2024, provided important clarifications regarding cross-border insolvencies involving companies based in Italy and non-EU countries. In the absence of rulings from the Court of Cassation, the Bologna judges applied the “Centre of Main Interests” (COMI) criterion to determine the jurisdiction for opening insolvency proceedings, extending this principle to non-EU companies. Specifically, the Court clarified that even if an insolvency proceeding has already been initiated in a foreign country, the Italian court has the authority to open an autonomous judicial liquidation, independent of the foreign proceeding. This liquidation is, in fact, universal in scope and involves all of the debtor’s assets, aiming to protect creditors in a balanced and coherent manner. The case under review concerned an Italian company under extraordinary administration, which had transferred part of its assets and its trademark to a subsidiary in the United Kingdom. Italian creditors requested the opening of judicial liquidation in Italy, despite a parallel proceeding being pending in England. The Court rejected the objection of lack of jurisdiction, emphasizing that, according to international principles and established legal practice, COMI should prevail as the primary criterion for determining jurisdiction, even in the absence of direct applicability of EU Regulation 2015/848 post-Brexit. An important confirmation from this ruling is that the universal application of the COMI principle and the possibility of rebutting the presumption that the legal seat and the actual centre of interests coincide are criteria that the judge must carefully evaluate based on concrete elements related to the actual management of the business operations. In the case of Bologna, the company’s operations and production occurred within Italy. This ruling, although specific to the case at hand, provides general guidance useful for future disputes in the cross-border insolvency arena, reaffirming the importance of a global and universal approach in international insolvency procedures.
(Court of Bologna, Judgment no. 14/2024)
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