Capital reduction
A capital reduction (engl. Capital decrease ) is a reduction of the capital of a corporation , and therefore provides the counterpart to the capital represents.
backgrounds
Just like a capital increase , a capital decrease is also a corporate action . With a capital reduction it is possible
- to eliminate an existing balance sheet loss,
- distribute excess capital to the shareholders.
In the first case, one speaks of a nominal capital reduction or denomination, because the share capital is reduced in the book and there is no outflow of liquid funds. The second case is called the effective reduction of capital because it with the distribution of cash to the shareholders or partners is connected.
If the remuneration paid comes from profits, it is treated as a payment of profits (dividend) for tax purposes.
Bankruptcy protection
In the event of a capital decrease, there are special regulations to protect debt capital providers ( creditors ) (§ § 225 , 233 AktG , § 58 GmbHG ). In the case of the ordinary capital reduction and the capital reduction through the withdrawal of shares, security must be provided for all creditors who report within 6 months of the announcement of the capital reduction resolution and who cannot demand satisfaction of their claim. Furthermore, payments to the shareholders may only be made 6 months after the announcement. With the simplified capital reduction, the protection of creditors is less strong, since there is no repayment to the shareholders and thus none of the debt coverage potential is lost. Rather, there are restrictions on the distribution of future profits (= future debt coverage potential). There are
- a profit distribution block as long as the legal reserve is less than 10% of the share capital
- a ban on dividends higher than 4% in the two years following the capital reduction resolution.
Simplified capital reduction
The simplified capital reduction is regulated in Sections 229 to 236 AktG . It is only permitted for the following purposes:
- Compensation for impairment
- Cover for other losses
- Allocation of amounts to the capital reserve
The prerequisites for the simplified capital reduction are that
- the legal reserve and the capital reserve together do not exceed 10% of the share capital remaining after the reduction,
- there is no profit carried forward and
- Revenue reserves are fully released.
The regulations on the adoption of resolutions and entry in the commercial register correspond to those of the ordinary capital reduction.
Capital reduction by withdrawing shares
The capital reduction by withdrawing shares is regulated in Sections 237 to 239 AktG . It can be used both to eliminate losses (nominal) and to repay capital (effective). The technical implementation takes place either through
- compulsory withdrawal of own shares or
- Cancellation of repurchased shares.
The compulsory withdrawal of own shares is bound to the corresponding provisions of the Articles of Association, which must have already existed at the time of subscription or acquisition.
Capital reduction at the GmbH
In the case of the GmbH, too, the capital reduction requires a 3/4 majority in the shareholders' meeting and an entry in the commercial register. When reducing the share capital, the minimum investment of 25,000 euros must not be undercut. The regulations for the protection of creditors essentially correspond to those for the stock corporation. However, there are very complicated form requirements. The resolution to reduce the capital must first be published in the company gazettes. Thereafter, registration for entry in the commercial register can only take place after one year. To compensate for depreciations or to cover losses, there is also a simplified capital reduction for the GmbH with simplification of the formal requirements (§ § 58a ff. GmbHG). The prerequisite for this is in particular a resolution by the shareholders' meeting (Section 58a, Paragraph 5 in conjunction with Section 53 GmbHG).
Procedure according to Swiss law
The capital reduction instrument also exists in Switzerland. In order to carry out a capital reduction, the board of directors must first obtain the required audit report from the audit expert. The Board of Directors then invites the shareholders to the General Meeting at which the capital reduction was put on the agenda. This general meeting has to vote on the capital reduction and if it is approved, the resolution is publicly recorded. This resolution will then be published three times in the Swiss Official Gazette of Commerce (SHAB) and the known creditors must be notified. All of the company's creditors can then register their claims within two months of the third publication in the SHAB. After a waiting period, the capital reduction is then implemented and again publicly notarized and registered with the commercial register office.
See also
Individual evidence
- ↑ http://wirtschaftslexikon.gabler.de/Definition/kapitalherabetzung.html
- ^ Etienne Petitpierre, lawyer: Capital reduction in Swiss law . Retrieved November 18, 2015.