Share Premium Contribution Agreement Definition

A co-op`s articles do not mention the amount of its capital; they only mention the currency in which the member accounts are denominated. The membership contract or, if the articles stipulate, may require a member to pay initial or additional equity to the co-op, which is credited to the membership account held by the co-op on behalf of that member. The easiest and fastest way to withdraw cash from a business is to make distributions from the company`s reserves, such as stock premiums and profit reserves. As a general rule, this requires only a shareholder decision and the procedure can be closed in one day. It should be noted, however, that under Dutch law, these distributions can only relate to the amount of the company`s freely distributed reserves. Only applies to limited liability companies, limited liability companies and limited liability limited liability limited liability companies, as only these companies hold equity. An increase in social capital may be decided by decision of the general assembly or the general assembly. In the case of restricted limited limited companies, all co-sponsors must consent to such an increase. The stock bonus account is a reserve that cannot be distributed. An entity can only use the account balance for purposes defined in its statutes.

In most cases, an entity cannot use the account to distribute dividends to shareholders or to offset operating losses. The stock premium account is generally used to reimburse capital charges that include, among other things, operating expenses. The account can also be used for the issuance of bonus shares and for the costs or expenses associated with that issue. The company`s statutes may provide for authorized capital, in which case the company`s share capital may be increased by decision of the board of directors, as part of the statutes, and then recorded by notarial deed. The statutes may authorize the board of directors to restrict or remove the preferential subscription rights of existing shareholders if the company`s share capital is increased with the use of authorized capital. The legal mechanisms available to a company to reduce and repay the share capital to its members – a reduction in capital by credit declaration or a judicial authorization – are not available for a capital deposit.

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