What is the capital of a company?
Capital increase: what is it?
What are the different types of capital increase?
Capital increase in an LLC in Morocco: how does it work?
Who decides on the capital increase?
What are the particularities of the capital increase by contribution in kind?
What are the particularities of the capital increase by partners' current account?
What is the capital of a company?
The definition of capital may be different depending on the context. Indeed, in accounting and legal terms, it has a more restrictive meaning.
Accounting and legally speaking, the capital of a company can be defined as the amount resulting from the multiplication of the number of shares or shares by their nominal value. In finance, capital corresponds to the total amount collected by the company following the issue of its shares or shares subscribed by partners or shareholders.
Capital increase: what is it?
The capital value of a company is fixed at the time of its creation. The amount of the said capital is defined on the statutes of creation of the company. The partners can decide to increase the latter at any time during the life of the company.
What are the different types of capital increase?
A company's capital increase can be carried out either by issuing new shares or shares, or by increasing the nominal value of existing shares or shares. To do this, the shareholders can contribute money to the company, contribute goods in kind or even waive claims vis-à-vis the company in return for new shares or shares.
In addition to the possibility of increasing the capital by contributions from the partners, the company can increase its capital by using the reserves or even the profits that were previously part of the company's equity.
In terms of a capital increase of a public limited company, it is essential to take into account the preferential subscription right granted to historical shareholders.
In the LLC, it should be noted that no new partner enters the capital without obtaining the agreement of the former partners. In addition, the partners will be offered a priority increase in proportion to their shares.
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Capital increase in an LLC in Morocco: how does it work?
It should be noted that the SARL, a form most used in Morocco, does not require a minimum capital. The partners of a SARL have the possibility of deciding on the share capital that suits them. The capital of an LLC must be divided into equal shares.
Who decides on the capital increase?
Within a SARL, it is up to the partners to decide on a possible capital increase. This decision can only be materialized following the convening of an extraordinary general meeting of the partners since it is a decision modifying the articles of association of the company. This decision is adopted by a majority of three quarters of the votes.
The capital increase is subject to the majority condition necessary for the modification of the articles of association, ie ¾ of the votes for the SARL and 2/3 of the votes for the SA.
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When it is question of an increase by incorporation of profits or reserves it is enough to obtain the vote of half voice.
What are the particularities of the capital increase by contribution in kind?
In the case of a capital increase by contribution in kind, in addition to bringing together the partners in an extraordinary general meeting to decide on the capital increase, there is intervention by the contributions auditor. The latter is appointed by all the partners by a unanimous majority decision. Otherwise, it is up to the commercial court to appoint one. Furthermore, when there is only one partner, the sole partner appoints the contributions auditor.
The contribution auditor proceeds under his responsibility to certify the contribution value provided for by the capital increase. Its role is to protect the partners or shareholders against an undervaluation of the capital contribution.
What are the particularities of the capital increase by partners' current account?
The capital increase can take place through the offsetting of debts. In other words, the partners can renounce the debts that the company has vis-à-vis them, in particular the partners' current account.
A partner current account corresponds to a cash advance, provided by the partners of a company. It is a tool available to society to finance itself. In return, the sums in the current account may give rise to the payment of interest to the partners.
Once transformed into capital, the partner waives his right to reimbursement as well as the right to interest once his debt is transformed into capital.
It should be noted that this type of increase requires the establishment of a closing of current accounts by the company's managers. This order is certified by the auditor or a chartered accountant. Their role is to ensure the amount of the current account and its liquid and payable nature.