Undistributed profits: no INPS contributions for LLC shareholders

Social security and contributions
Undistributed profits: no INPS contributions due for shareholders of limited liability companies
Tribunal of Foggia

A shareholder acting as sole director of a limited liability company (società a responsabilità limitata) challenged an INPS demand for payment of Euro 3,895.54 in additional contributions for 2018. The Institute had included in the contribution base a share of the profits generated by the company, notwithstanding that those profits had not been distributed.
The Tribunal upheld the claim. The profits of a limited liability company are relevant for the shareholder only when they are actually received. Mere participation in the share capital does not, in itself, generate income subject to contributions. The position is different for partnerships (società di persone), in which business income is attributed to the partners even independently of actual distribution.
INPS could have demonstrated that the profits had in fact been distributed, or that their non-distribution was pursued for fraudulent purposes. In the absence of such evidence, the contribution demand was declared unfounded.
The ruling offers practical guidance for shareholders and directors enrolled in the artisan or commercial management schemes: profits left within the company, reinvested, or set aside as reserves do not automatically form part of the personal contribution base. It remains essential, however, to document clearly the destination of the profits and the absence of indirect attributions to shareholders.