A capital increase is a financial step in which a company increases its equity by raising additional funds. This article focuses mainly on the capital increase in a limited liability company (GmbH), although the stock corporation (AG) is also briefly discussed.
- A capital increase is a step to increase the equity of a company by raising additional funds.
- The GmbH is a widespread form of company in Germany that frequently carries out capital increases.
- Shareholders can contribute additional capital in the form of cash or contributions in kind.
- New shareholders can be taken on in order to expand capital, know-how and networks.
- Profits can be capitalized in equity instead of being distributed.
- The capital increase generally requires a resolution by the shareholders' meeting and amendments to the articles of association.
- In the case of an AG, the capital increase is carried out by issuing new shares, which entails more complex requirements.
Capital increase in the GmbH
The GmbH is one of the most common corporate forms in Germany. In the case of a capital increase in a GmbH, the share capital of the company is increased. This can be done in a number of ways:
1. contributions of the shareholders
The shareholders of the limited liability company may decide to contribute additional capital to the company. This can be in the form of cash or contributions in kind (e.g. machinery, land).
2. admission of new shareholders
Another option is to take on new shareholders who contribute capital to the company. This not only expands capital, but can also bring additional expertise and networks into the company.
3. capitalization of profits
The LLC may also decide to capitalize part of its profits instead of distributing them. This means that profits flow back into the company’s equity.
4. conversion of loans
Shareholder loans can be converted into equity. This strengthens the equity base and can improve the company’s credit rating.
Legal aspects
A capital increase in a GmbH usually requires a resolution of the shareholders’ meeting. In addition, the relevant amendments must be made to the articles of association and entered in the commercial register.
Capital increase in the AG
In contrast to a GmbH, the capital increase of an AG is carried out by issuing new shares. This can be done either through a public offering or a private placement. The capital increase of an AG is usually more complex and subject to stricter regulatory requirements.
Conclusion
A capital increase can be an effective means for a GmbH to finance growth, strengthen the balance sheet or make investments. It is important to carefully weigh the various options and consider the legal requirements.
