Increase of authorized capital

An increase in authorized capital is used to increase financial resources (attracting investments, increasing personal working capital), increase stability and solvency, expand and developing business, and change the ownership structure.

The statutory capital of any company can be increased both through additional contributions of company members and without such contributions.

The second scenario can occur if the profits are not distributed. The ratio of shares of company participants in the authorized capital, as well as the composition of participants.

The implementation of this involves holding a general meeting of participants and approving the decision in the form of a protocol or the owner making a sole decision.

Dividends

By the Law of Ukraine “On Limited and Additional Liability Companies”, dividends may be paid quarterly or with another frequency specified in the articles of association. The members of the company have the authority to independently decide what amount of profit is redistributed to increase the authorized capital.

Importantly! A decision to change the authorized capital requires three-quarters of the votes of all members of the LLC. However, the charter may fix a different number of participants.

It is not necessary to make changes related to the increase of authorized capital to the charter, these changes will be reflected in the Unified State Register anyway.

Current members of the company, as well as third parties, can change the authorized capital in the direction of increase with the help of additional contributions. Each member of the company has a preferential right to make an additional contribution within the amount of the increase in the authorized capital, proportional to his share in the authorized capital.

The right of pre-emption is determined by the general meeting of participants, but the term cannot be longer than 1 year from the date of the decision of the general meeting. For the third person, a different term for the additional deposit is established, namely: half a year.

What can be a contribution to increase the authorized capital?

• own funds
• shares, bonds, and other securities
• movable and immovable property

Accordingly, contributions can be made in non-monetary form. In this case, the members of the company must carry out a monetary assessment of such contributions and approve it by a unanimous decision.

Stages of attracting additional funds when changing the authorized capital

1. the general meeting adopts a preliminary decision indicating the amount of additional contributions and the procedure for making them; this document is not submitted to the state registrar
2. the general meeting makes a final decision, which will indicate the results of the introduction of additional capital; this document is certified and submitted to the state registrar

Importantly! The state registrar cannot, in practice, verify the payment of monetary contributions to the company’s account and require payment orders to confirm this fact.

If you want to carry out the procedure of increasing the authorized capital, the specialists of the legal company “Prikhodko and Partners” will advise you, and they will also be able to quickly and efficiently support such a procedure.