{"id":7489,"date":"2020-03-22T23:28:03","date_gmt":"2020-03-22T22:28:03","guid":{"rendered":"https:\/\/dev.andersen.dotandmedia.com\/shareholders-loan-repayment-general-journal-entries-as-evidence\/"},"modified":"2020-06-11T18:04:07","modified_gmt":"2020-06-11T16:04:07","slug":"shareholders-loan-repayment-general-journal-entries-as-evidence","status":"publish","type":"post","link":"https:\/\/dev.andersen.dotandmedia.com\/en\/shareholders-loan-repayment-general-journal-entries-as-evidence\/","title":{"rendered":"Shareholders loan repayment: general journal entries as evidence"},"content":{"rendered":"

According to a recent decision by the Italian Supreme Court, general journal records are documentary evidence admissible in court, but such records alone are not enough to prove the debit of the company to be real. There should also be further evidence to establish a point put forward by a shareholder (in order to prove they are also a creditor of the company) on the grounds that he had entered into a transaction with the company as a result of which he granted a loan to the company. To win the case and obtain judgement against the company, the claimant (which is the shareholder) shall give \u00abfurther specific information regarding the legal treatment<\/strong>, and terms and conditions<\/strong> of the financial instrument<\/em>\u00bb which they are claiming the existence of. Such information is to be gathered in order to verify \u00abthe real intention<\/strong><\/em>\u00bb of the parties to the contract (the company and its shareholder). It is the Judge\u2019s duty to closely analyse all the information gathered regarding the initial payment<\/u> and then state which type of contract<\/u> was entered into between the shareholder and the company. In arriving at this decision, the Court mentions several previous decisions where the Court had already explained the difference between:<\/p>\n

a. loan payments (related to a loan contract<\/u>); and<\/p>\n

b. equity investment (attributable to an atypical contract<\/u> by which the shareholder is aiming to \u00abincrease the company\u2019s assets<\/em>\u00bb).<\/p>\n

In carrying out the interpretative reconstruction of the \u00abcontractual intention of the parties<\/em>\u00bb, the Judge must take into consideration (i) the \u00abway in which the contractual intention was concretely implemented<\/strong><\/em>\u00bb, (ii) the \u00abpractical purposes<\/em><\/strong> to which it appears to be directed<\/em>\u00bb and (iii) \u00abunderlying interests<\/strong><\/em>\u00bb.<\/p>\n

Instead, during the judicial proceedings which led to the above-mentioned decision n. 4261\/2020, both in the first instance and in the second instance, the application for repayment of the loans had been accepted (with reasoning considered insufficient by the Court of Cassation) since<\/p>\n

1) the loan resulted from the general journal and the defendant failed to dispute the validity of the accounting records of the journal; and<\/p>\n

2) the payment was \u00abnot for a specific consideration<\/em>\u00bb.<\/p>\n

The defendant (the company), was therefore unsuccessful in both the first and second instance, and appealed to the Supreme Court of Cassation by arguing that the accounting results, although not contested, could not be the sole reasonable ground to qualify the payment as a “loan”, and exclude that it could actually be an \u201cequity investment\u201d. The Court upheld the claims, due to incorrect legal interpretations by previous Judges of articles 1813 (loan contract) and 2697 (burden of proof) of the Italian Civil Code.<\/p>\n","protected":false},"excerpt":{"rendered":"

According to a recent decision by the Italian Supreme Court, general journal records are documentary evidence admissible in court, but such records alone are not enough to prove the debit of the company to be real. There should also be further evidence to establish a point put forward by a shareholder (in order to prove […]<\/p>\n","protected":false},"author":8,"featured_media":8001,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[50],"tags":[],"class_list":["post-7489","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insights"],"acf":[],"yoast_head":"\nShareholders loan repayment: general journal entries as evidence - Andersen Italy<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dev.andersen.dotandmedia.com\/en\/shareholders-loan-repayment-general-journal-entries-as-evidence\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Shareholders loan repayment: general journal entries as evidence - Andersen Italy\" \/>\n<meta property=\"og:description\" content=\"According to a recent decision by the Italian Supreme Court, general journal records are documentary evidence admissible in court, but such records alone are not enough to prove the debit of the company to be real. 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