146 5 Equity and Shareholders’ Capital
terprise forms not covered by the Second Directive.^55 Legal capital regimes are
nevertheless characteristic of continental European company laws in general.
The legal capital regime contains core corporate governance rules common to
all public limited-liability companies incorporated in the EU. The stated purpose
of the general legal capital regime is to protect weak shareholders and creditors.
The traditional justification for minimum capital rules is that compliance with
such rules is the price that shareholders must pay to obtain the benefits of limited
liability. There are no such mandatory rules in the law of partnerships and limited
partnerships. The legal capital regime is nevertheless much more than just mini-
mum capital requirements. Decision rights vested in the general meeting are an
important aspect of the European legal capital regime. They are believed to be
necessary for two reasons: the protection of minority shareholders and the
enforcement of the principle of equal treatment of shareholders in the same
position.^56
Forms of legal capital. The forms of “legal capital” under EU company law
range from share capital to certain other asset classes in the balance sheet. The
required or permitted classes of legal capital must be based on the articles of
association (the statutes or the instrument of incorporation of the company) and/or
filed with the trade register.
- The company can have authorised capital.^57 When a company is set up or its
articles of association amended, the shareholders can authorise the minimum
and maximum amount of share capital. If each share is a share of the aggregate
share capital, the shareholders can authorise the minimum and maximum num-
ber of shares that can be issued. - The company must have subscribed capital.^58 The amount of subscribed capital
should range between the minimum authorised share capital and the maximum
authorised share capital.^59 Where the company has not authorised a minimum
and maximum amount of share capital, the subscribed capital and the share
capital should be the same. - The shares of the company can have a nominal value.^60 Alternatively, the
company can have shares without a nominal value.^61
(^55) For German law, see MoMiG-RegE of 23 May 2007 (der Regierungsentwurf des Geset-
zes zur Modernisierung des GmbH-Rechts und zur Bekämpfung von Missbräuchen)
which proposed the reduction of minimum share capital requirement for a limited-
liability company from €^ 25,000 (GmbH) to €^ 1 (Unternehmergesellschaft).
(^56) See, for example, recital 5 of Directive 77/91/EEC (Second Company Law Directive).
(^57) Article 2(c) of Directive 77/91/EEC (Second Company Law Directive).
(^58) Articles 2(c) and 3(g) of Directive 77/91/EEC (Second Company Law Directive).
(^59) See also Article 34 of Directive 77/91/EEC (Second Company Law Directive).
(^60) Article 3(b) of Directive 77/91/EEC (Second Company Law Directive). See also Article
3(h).
(^61) Article 3(c) of Directive 77/91/EEC (Second Company Law Directive). See also Article
3(h).