Shareholders Agreement Capital Contribution

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A company agreement may include a clause requiring shareholders to deposit additional capital to meet an unexpected demand for liquidity. Cases where financing may be unexpected include paying taxes, paying debt, or paying reparations. The agreement may contain a certain percentage of the capital or variable amounts. There may also be a cap on the amount of capital a company can charge from shareholders. It is important that potential shareholders check their responsibilities with respect to additional contributions before entering into an agreement. In its decision, the Supreme Court had to determine the nature and applicability of a contractual agreement between shareholders of a limited liability company on voluntary capital contributions into the company. In the present case, the agreement concluded by the shareholders did not meet the above requirements, since no formal decision of the shareholders was taken at a shareholders` meeting. On the contrary, in the shareholders` agreement, the shareholders agreed only in writing to pay voluntary capital contributions to the company. The Supreme Court ruled that voluntary contributions – either contractually agreed between shareholders or approved by a unanimous circulation decision outside a formal general meeting – were applicable. Restrictions on additional capital injections do not apply. The articles of association of a limited liability company (but no public limited company) may require shareholders to make additional capital contributions. Additional deposits must have a fixed share in each shareholder`s initial contribution.

No shareholder may be excluded from the obligation to make an additional capital contribution and the share of the additional contributions may not be changed. The Supreme Court`s decision confirms the general market practice of capital deposits. The decision ensures that shareholders of public limited companies and limited liability companies have the flexibility to conclude deposits outside the articles of association. Therefore, shareholders in syndicated contracts or correspondence outside of consortium agreements must carefully design capital contribution clauses to prevent mere declarations of intent to strengthen a company`s capital base from becoming enforceable shareholder commitments. Austrian company law provides for the possibility of investing additional capital in a limited liability company or public limited company.

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Hi, I'm Robyn and I was Hatched from a Kinder Surprise Egg. Graphic Designer by day, Maker of things by night. I have worked as a graphic artist professionally since I was 16 years old. Went on to get my Bachelors of Art from NIU. I like to share my Artwork online at flickr.com/photos/robayre and on my own personal website http://www.robayre.com. I also have an online shop http://www.robayre.etsy.com where you can find more of my "crafty" sorts of things, as well as a random piece of artwork here and there. Oh, and I'm also an occasional contributor to Artomat (artomat.org).