Capital increase (Kapitalerhöhung)
Also: Kapitalerhöhung, increase of share capital
In short
In a capital increase, the share capital of a GmbH or UG is increased, either through new contributions or from the company's reserves. A notarised resolution with a three-quarters majority and entry in the commercial register are required.
Capital increase (Kapitalerhöhung) explained
A capital increase is an amendment to the articles of association (Sec. 53 GmbHG) and only takes effect on registration (Sec. 54 (3) GmbHG). In an increase against contributions, existing or new shareholders pay in fresh capital; anyone taking up a share makes a notarially recorded or certified declaration of subscription (Sec. 55 (1) GmbHG). This is also how investors come in. In an increase from company funds, reserves are converted into share capital (Sec. 57c GmbHG), on the basis of an audited balance sheet whose reporting date is no more than eight months before the application (Sec. 57e, 57f GmbHG). This is how a UG becomes a GmbH once its share capital reaches €25,000.
