The capital increase of a company
Arrival of a new partner, development of the company, diversification of activity, recapitalization. So many reasons which generally require an increase in the capital of a company.
Even if this is a fairly common transaction involving the company's share capital, certain aspects require special attention with regard to the regulations in force in order to avoid any risk of the transaction being called into question.
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Capital increase: definition
The capital increase operation is an operation by which a company increases its share capital. This increase can be achieved in two different ways:
- increase the par value of shares or membership shares
- issue new shares or shares.
Capital increase: the steps to follow
In practice, the capital increase takes place according to the following steps:
Step 1: Choice of type of increase.
Step 2: Decision of shareholders/partners in general meeting.
Step 3: Deposit of new funds.
Step 4: Advertising and filing formality.
Capital increase methods
The decision to increase the share capital is taken by the shareholders or partners of the company. This is one of the prerogatives conferred by the holders of shares or shares. The methods to increase the capital of a company are multiple.
Capital increase through shareholders or partners of the company:
In this case, the company issues new shares intended to be acquired by the shareholders previously present in the capital of the company. This process allows shareholders not to impact the structure of the company's share capital, because they will have the possibility of acquiring new shares in accordance with the pro rata of what they already hold.
Capital increase through the issue of new shares intended for third :
This method can be implemented by allowing new shareholders to take part in the capital of the company. New shares will then be issued and acquired by third parties. The distribution of capital is thus modified. The holding percentages of historical shareholders are reduced following the capital increase operation.
The majority for voting decisions at general meetings may be affected accordingly.
The capital increase via a contribution in kind
The contribution in kind can also be used for an increase in the company's capital. Thus, tangible or intangible assets may, after their valuation, form part of the company's assets. In return, the contributor receives shares or shares in the company.
The contributor may be a historical partner or shareholder or a new partner.
The capital increase via an incorporation of reserves or retained earnings
It is also possible to incorporate into the capital the reserves that the company has been able to accumulate. These incorporated reserves can no longer be distributed to shareholders.
The same applies to retained earnings made up of the accumulation of previous profit results.
The capital increase via a transformation of receivables
Liquid and due claims can also serve as the basis for a capital increase. The most frequent form of this type of increase is the capital increase by incorporating the current accounts of associates.
In general, the capital increase operation requires the intervention of an auditor to certify the terms of the operation and assess the contributions. Partner chartered accountants are able to support you in the context of all these capital increase operations regardless of your sector of activity. Do not hesitate to contact us.