The recent revision of the Code of companies and associations is characterised by a fundamental reshaping of the regime applicable to limited liability companies (SRL, formerly SPRL) and more specifically the modification of the rules on the issuance of new shares.
Previously, shareholders within the SPRL were granted one vote per share and were conferred an equal right in the distribution of profits. While SRLs shall still issue at least one share with voting right and one share with dividend right, there no longer exists a necessary link between the value of the contributions made by the shareholders and the rights attached to the shares (voting right, dividend right, etc.); shareholders are now free to determine the rights attached to their shares.
In parallel, it must be noted that more flexible rules on the issuance of new shares have been introduced. For instance, the General Assembly may mandate the board of directors to issue additional shares. The General Assembly may also limit or abrogate preferential rights in the interest of the company. Furthermore, the issue price of new shares can thus be determined freely, irrespective of the value of the shares contributed in kind. Consequently, there shall be no more recourse to share issue premiums.
For the purpose of existing shareholders’ protection, the management body shall however write a report in which it justifies the issue price and describes the consequences of the transaction on patrimonial rights and rights deriving from shareholding. As in the case of the former SPRL with the adaption of the capital amount, the issuance of new shares in the SRL requires an amendment to the articles of association to adapt the total number of shares.
Another noteworthy change relates to contributions in kind. Under the new legal regime, it is now possible to make such contributions in kind by committing to man-hour contributions or the provision of services/expertise, in exchange for part of the profit. This new type of contribution in kind is subject to the same evaluation rules. Indeed, such contributions in kind shall always be evaluated by a company auditor, who shall write a report to be handed to the notary in charge of the notarial deed. Furthermore, the shareholders are required to provide the notary with a founder’s report providing justification of the interest of these contributions in kind for the relevant company.
Given that the SRL does no longer require an initial capital to be incorporated, such contributions in kind no longer have to be paid up at the time of the incorporation. With regards to public limited companies, the minimal amount to be paid up is ¼ of the full price per share, with a total minimum of € 61,500, which amounts to the capital necessary to incorporate a public limited company. In any case, each shareholder shall bring what he committed to contribute to the company in its integrity, be it integrally or partly for the first period.