Shareholders' Resolution (shares par value decrease)
The shareholders' resolution or decision of the general assembly is a formal decision taken by the shareholders of a company on a specific matter that requires their approval. Such decisions are crucial in the corporate governance and decision-making process of LLCs.
This resolution is suitable for:
- limited liability companies.
- decreasing the share capital by reducing the nominal value of the shares.
What is the nominal value of the shares in an LLC?
The nominal value of the shares is the value assigned to each share at the time of incorporation of a limited liability company (LLC). It is set in the company's articles of incorporation / bylaws and reflects the initial contribution of the shareholders to the company's equity.
How is the nominal value of the shares determined?
The nominal value of the shares is determined in the LLC's articles of incorporation at the time of incorporation. The equity is divided by the total number of shares, resulting in the nominal value of each share.
What is the role of the nominal value of the shares?
The nominal value of the shares serves several purposes:
- Determining the share capital: reflects the total amount of the shareholders' contributions to the LLC's share capital.
- Proportion of share capital ownership: establishes the proportion in which each shareholder participates in the share capital, based on the number of shares held.
Is the nominal value of the shares equal to the market value (price) of the shares?
No, the nominal value of the shares is an accounting value set in the articles of incorporation and does not reflect the actual market price of the shares. The market value of the shares should be determined by considering the company's value, financial performance, growth prospects, and other economic factors.
Can the nominal value of the shares in an LLC be modified?
Yes, the nominal value of the shares can be modified by a decision of the General Meeting of Shareholders (GMS). This can involve either an increase or a decrease in the nominal value and requires updating the articles of incorporation and registering the modification with the Trade Register.
What is a GMS decision to reduce the nominal value of the shares in an LLC?
A GMS (General Meeting of Shareholders) decision to reduce the nominal value of the shares is a document adopted during the general meeting of the shareholders, through which they decide to reduce the nominal value of each share in the structure of the company's share capital.
Why might a decision to reduce the nominal value of the shares in an LLC be necessary?
Reducing the nominal value of the shares may be necessary for:
- Adapting the share capital structure to the company's current financial needs.
- Facilitating the attraction of new investments or shareholders.
- Aligning with legislative or regulatory requirements.
- Restructuring the share capital without changing the total number of shares.
What are the steps for adopting such a decision?
The main steps for adopting a decision to reduce the nominal value of the shares in an LLC include:
- Convening the General Meeting of Shareholders (GMS): All shareholders must be convened to discuss the proposal, according to the rules in the articles of incorporation.
- Adopting the decision: The decision must be approved during the GMS, in compliance with the majorities stipulated in the LLC's articles of incorporation.
- Updating the articles of incorporation: If reducing the nominal value of the shares involves amending the articles of incorporation, they must be updated and signed by the shareholders.
- Registering the amended articles of incorporation and the decision with the Trade Register: The GMS decision and the updated articles of incorporation must be registered with the Trade Register Office to have legal effects.
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