Capital changes
Increasing and decreasing of the capital of an LLC
Capital increase
There are three options for increasing capital:
– by increasing the shareholdings of the partners
– by adding more shares to current partners
– by accepting new partners with new shares
The reasons for the effective increase of the capital of a company may be different, but it is usually a matter of needing more own funds.
Unless otherwise stated in the partnership agreement, the capital increase shall be commensurate with the shares of the founders in order to maintain the same status quo in the General Assembly.
More about capital
Capital can be defined in different ways – basic, statutory, company, registered, subscribed, etc. All these definitions are synonymous. It’s different when we talk about paid-in capital.
This is because when a capital company is formed, 70% of the paid-up, statutory, etc. may be initially paid. In the case of joint stock companies, 25% of the authorized capital may be paid upon the incorporation of the company.
The capital of limited liability companies represents the value of the partners’ contributions. In Bulgaria, the minimum amount of capital at registration of companies (excluding AD) was set at BGN 2 in 2009.
It can be said that this decision renders the two basic functions of the institution capital, namely, the material basis of the activity of the company, as well as its guarantee function.
2 BGN capital can neither be the basis for starting any business, nor any guarantee from the perspective of creditors.