Reducing Minimum Share Capital in Limited Liability Companies: A Basic Model

2007 ◽  
Author(s):  
Akos Szalai
Keyword(s):  
Limited Liability ◽  
Share Capital ◽  
Basic Model

scholarly journals Share capital in the Polish simple joint-stock company in light of the existing law and proposed European legislation

2019 ◽  
Vol 29 ◽  
pp. 77-94
Author(s):  
Iwo Jarosz
Keyword(s):  
Limited Liability ◽  
Regulatory Reform ◽  
Capital Requirements ◽  
Regulatory Competition ◽  
Joint Stock Company ◽  
Limited Liability Company ◽  
Stock Company ◽  
Share Capital ◽  
European Legislation ◽  
Legislative Changes

In recent years we have witnessed an almost unprecedented effort of legislators and legal academics in Europe to make limited liability companies in various jurisdictions more modern, simpler and more accessible. These endeavors are usually related to the liberalization of statutory requirements regarding the minimum share capital amounts. Lively debates among academics and practitioners, as well as regulatory competition, seem to be the factors making the legislative changes dynamic and evolutionary. The issue of limited liability companies’ regulatory reform were also the subject of proposed European legislation, including the now abandoned proposal of a harmonised single-member limited liability company model known as Societas Unius Personae SUP. In Poland there has also been, for  almost a decade, a discussion on whether and how to follow the example of Germany and its Unternehmergesellschaft and other European countries and liberalize the capital requirements for the Polish limited liability company. Lately the Polish legislator has introduced the so-called simple joint-stock company prosta spółka akcyjna, which had been drafted to be an attractive offer for start-ups, aiming, in the perception of its proponents, to achieve the modernization and simplification desired by contemporary legislators and supposedly accomplished in other jurisdictions, all the while maintaining serious levels of creditor protection. The author employs formal-dogmatic and comparative methods to describe the capital structure of the new company type and to confront it with certain other statutory developments, especially the Societas Unius Personae as a serious and well-thought-out, nonetheless failed venture, to try to assess the solutions set forth by the Polish legislator.Kapitał zakładowy prostej spółki akcyjnej w świetle dotychczasowych przepisów i projektów prawodawstwa europejskiegoW ostatnich latach europejscy ustawodawcy i przedstawiciele nauki prawa podejmowali nieomalże bezprecedensowe wysiłki w kierunku modernizacji, uproszczenia i zwiększenia dostępności spółek z ograniczoną odpowiedzialnością. Działania te zazwyczaj zmierzały do liberalizacji ustawowych wymogów dotyczących minimalnych kwot kapitału zakładowego. Czynnikami dynamizującymi zmiany legislacyjne wydają się żywe dyskusje w środowisku akademickim oraz na łonie praktyki, a także konkurencja regulacyjna. Kwestie reformy spółek z ograniczoną odpowiedzialnością były również przedmiotem projektów prawodawstwa europejskiego, w tym projektu dyrektywy w sprawie zharmonizowanego modelu spółki z ograniczoną odpowiedzialnością jednoosobowej znanego jako Societas Unius Personae SUP. Także w Polsce od prawie dekady toczy się dyskusja w przedmiocie zmian dotyczących spółek z o.o., w szczególności tego, czy polskie ustawodawstwo powinno podążyć za przykładem Niemiec i znanej z niemieckiego porządku prawnego Unternehmergesellschaft oraz innych krajów europejskich i zliberalizować wymogi kapitałowe dla tego typu spółek. Sejm przegłosował niedawno ustawę wprowadzającą tak zwaną prostą spółkę akcyjną. Ten nowy typ spółki ma w założeniu stanowić atrakcyjną propozycję dla start-upów, prowadząc — zdaniem jej zwolenników — do modernizacji i uproszczenia pożądanego przez współczesnych prawodawców przy jednoczesnym utrzymaniu stosownego poziomu ochrony wierzycieli. Autor próbuje ocenić rozwiązania zaproponowane przez polskiego ustawodawcę w zakresie struktury kapitałowej nowego typu spółki, konfrontując je z innymi rozwiązaniami, w tym w szczególności z projektem Societas Unius Personae — przedsięwzięciem ostatecznie nieudanym, choć przemyślanym i zasługującym na uwagę.

scholarly journals Evolution of the share capital function, as a tool for overcoming economic turmoil

2018 ◽  
Vol 18 (2) ◽  
pp. 19-29
Author(s):  
Luigi Lai
Keyword(s):  
Limited Liability ◽  
Past Century ◽  
Share Capital ◽  
Financial Autonomy ◽  
The Past ◽  
Formal Element ◽  
Additional Burden ◽  
Legitimate Expectations ◽  
Fresh Starts ◽  
And Function

The paper aims at showing that a lower share capital in limited liability companies can be a successful tool for overcoming the consequences of an economic crisis. In a period of economic turmoil insolvency is more than a simple risk. For such a reason the limited liability company shareholders, thanks to the complete financial autonomy given by the share capital, have a shield from the legitimate expectations of the creditors. The share capital protects the entrepreneur and at the same time allows faster fresh starts; nevertheless, in order for that to happen, the share capital cannot be an additional burden, instead has to be a simple formal element. The article demonstrates that in the last 50 years is visible a shift in the concept and function of the share capital. During the 50’s of the past century, the share capital was considered as a guarantee for the company’s creditors. Nowadays the European legislators across Europe are heading to consider the share capital as a mere formal element disconnected by any due quantity.

23. Loan capital—secured creditors and company charges

Company Law ◽  
2018 ◽  
Author(s):  
Brenda Hannigan
Keyword(s):  
Financial Institutions ◽  
Limited Liability ◽  
Limited Liability Company ◽  
Private Companies ◽  
Share Capital ◽  
High Street ◽  
Secured Creditors

The majority of companies on the register of companies are private companies with very limited amounts of share capital. Thus, if those companies are carrying on business to any significant level, it must be on the basis of other forms of funding, typically in the form of straightforward commercial borrowing from high street banks and financial institutions. When lending to a limited liability company, the lender is conscious of the need for security to cover the amount lent. This chapter discusses: company charges; fixed and floating charges; the approach to categorisation; registration of charges; and enforcement of a floating charge.

MAKING AN IN-KIND CONTRIBUTION TO A LIMITED LIABILITY COMPANY

2021 ◽  
Vol 1 (XXI) ◽  
pp. 279-291
Author(s):  
Jędrzej Kubica
Keyword(s):  
Limited Liability ◽  
Civil Code ◽  
Point Of View ◽  
Limited Liability Company ◽  
Share Capital ◽  
The Subject ◽  
Effective Transfer ◽  
Practical Dimension

In this article, the author focuses on the issue of making an in-kind contribution to a limited liability company – both at the time of the company establishment and in the procedure of increasing the share capital. For this purpose, the author reviews the doctrine and judicature positions relating to the concept of contribution capacity and looks for answers to the question whether the limited liability company agreement and the declaration of taking up shares have the binding and disposing effect referred to in art. 155 and art. 510 of the Civil Code, and therefore whether it is necessary to conclude a separate agreement for the transfer of the subject of the contribution to the company for the effective transfer of the in-kind contribution. In his considerations, the author draws attention to the practical dimension of applying the provisions from the point of view of the work of a notary

Management Buy-Out, Cash Pooling, Up-Stream Loans and Guarantees in German Group Companies: Old Concepts – New Developments

2004 ◽  
Vol 5 (10) ◽  
pp. 1217-1232
Author(s):  
Jochen Herbst
Keyword(s):  
Limited Liability ◽  
Federal Court ◽  
Legal Issues ◽  
Legal Practice ◽  
New Developments ◽  
Share Capital ◽  
Court Of Justice ◽  
German Company ◽  
Federal Court Of Justice

For more than a century, the cardinal provision ensuring the preservation of the capital reserve in the registered share capital amount in a Gesellschaft mit beschränkter Haftung (GmbH – German company with limited liability) has continued unaltered. This is the payout prohibition contained in § 30 (1) Gesetz betreffend die Gesellschaften mit beschränkter Haftung (GmbHG – German Act on Companies with Limited Liability), which the Bundesgerichtshof (BGH – German Federal Court of Justice) has identified as a “cornerstone of the GmbHG.“ In consideration of the impressive period of applicability and evident resistance of the provision against legislative encroachments, the lay person, for example a managing director of a GmbH as primary addressee of the provision, is now supposed to be able to assume that at least the fundamental legal issues concerning the provision have been sufficiently clarified through jurisprudence and legal practice in the meantime.

scholarly journals Formation of statute capital in economic organizations

2019 ◽  
pp. 6-8
Author(s):  
Olena KOSTIUNIK ◽  
Kateryna HULKO
Keyword(s):  
General Procedure ◽  
Limited Liability ◽  
Point Of View ◽  
Economic Point ◽  
Share Capital ◽  
Economic Organizations ◽  
Effective System ◽  
The Relationship ◽  
Authorized Capital

In this article the value of the authorized capital is defined, the features of formation of the authorized capital in economic organizations are investigated. The peculiarities and problems of forming the authorized capital of joint-stock companies and limited liability companies are considered. The procedure of documentary registration and accounting of the formation of the authorized capital of companies and the proposals for their improvement are explained. According to the generally accepted opinion of experts in the field of corporate law, the article identifies three main functions of share capital and their characteristics. The ways of making cash contributions, their combination and features are considered. The specificities of keeping records of accounting policies are discussed. The article identifies and analyzes the founder's contributions, determines the terms of formation of the authorized capital, the amount of unpaid authorized capital from an economic point of view is considered as a corrective article to the authorized capital and as an economic potential of the enterprise. The general procedure of organization of accounting of the authorized capital is carried out. The article considers the accounting procedure for the formation of authorized capital. One of the main points of accounting organization at any enterprise is to keep certain records in accounting documents. The composition of accounting policy documents is analyzed in the article. The relationship between economic communities (limited liability companies and joint stock companies) regarding the existence of share capital, which is proportional to the stock, is considered. Research shows how important the role of the authorized capital of economic organizations is when guaranteeing the interests of participants and creditors of economic organizations. The main objective of creating an effective system of guarantees for the creditor's rights and to prevent the emergence of "day-to-day firms" is to increase the minimum amount of authorized capital to the level in European organizations.

scholarly journals Gaps and analogies in the formation of registered capital of limited liability and joint-stock companies

2021 ◽  
Vol 39 (69) ◽  
pp. 237-260
Author(s):  
Viktor Mikryukov
Keyword(s):  
Social Capital ◽  
Civil Law ◽  
Limited Liability ◽  
Legal Regulation ◽  
Capital Formation ◽  
Research Tool ◽  
Regulatory Structure ◽  
Share Capital ◽  
Analogy Method ◽  
Analysis And Synthesis

The aim of the research is to analyses and, using analogy, to examine exhaustively the areas of legal uncertainty in the mechanism of social capital formation of commercial entities, while at the same time checking the coherence of the statutory analogy and the analogy in law as a universal means of protecting and combating gaps in the business sphere. A combination of general logical methods of analysis and synthesis, induction and deduction, comparison and generalization, characteristic of works dealing with civil law, were applied. At the same time, the analogy method was used as a research tool and as a research tool. The conclusions of the work include the identification of specific gaps in the legal regulation of the procedure, methods, and terms of payment of share capital, the identification of ways to overcome these gaps casually and the formulation of proposals for the legislative updating of the regulatory structure of the share capital of commercial companies.

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