How to correctly carry out a capital increase in your company?

Essential legal steps for a capital increase

1. Agreement at the general meeting

   • Must be approved at an ordinary, extraordinary, or universal meeting.

   • Requires a qualified majority depending on the type of company.

   • If the nominal value of shares is increased, all partners must give their consent (unless financed with approved profits or reserves).
      

2. Proposal from the board of directors

   • Includes the type of increase, consideration (cash, assets, or credits), and, in public limited companies, a justifying report.
      

3. Convocation of the meeting

   • Except for a universal meeting, the convocation must meet the requirements of the Law and the company's bylaws.
      

4. Granting of a public deed

   • It can be done in a single document or in two (agreement and execution).

   • Registration in the Commercial Registry requires the agreement to have been executed.
      

5. Registration in the registry and publication in the Official Gazette of the Mercantile Registry

   • After registration, the agreement must be officially published in the Official Gazette of the Mercantile Registry.

 

Ways to carry out a capital increase

Depending on how it is structured, there are several ways to carry it out:

By increasing the nominal value of existing shares/participations.
By issuing or creating new shares or stocks.

And any of these options can be financed by:

• Cash contributions

• Non-cash contributions

• Set-off of credits

• Application of profits or reserves

It is important to consider:

• An issue premium may be established (additional amount to the nominal value).

• Privileged shares may be issued, although subject to legal limits.

• Shareholders have a preferential right of subscription or assumption, unless expressly waived.

Increasing capital not only strengthens your company's financial structure, but can also facilitate its expansion, restructuring, or attraction of new investors. However, its legal processing must be rigorous to avoid nullities or corporate conflicts.