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Share Premium Contribution Agreements

The refund of the premium is not subject to dividend tax if the entity does not have and does not expect unreported profits. For un distributed profits, the repayment of equity can be made without tax on dividends, first by converting the premiums available into shares (i.e. shares distributed on the premium reserve into shares) and then reducing the share capital issued by the company. By a change of the statutes that requires a decision of notarized shareholder. The contribution of the premium to the stock requires a share premium agreement between the shareholder and the entity, as well as a shareholder decision. There is no registration of the premium in the Dutch trade register or in the shareholder register. Following the share bonus agreement and the adoption of the decision, the stock premium may be paid by the shareholder by transfer to the company. Since there are not many formalities, an action bonus can be executed within one day in case of an emergency. In the SPA, the statutes may authorize the director to increase the capital of the SpA for the purpose of financing the management of the company or for specific purposes. In this case, no general meeting is required. The stock premium (agio in Dutch) is the amount paid on shares that exceed the face or nominal value of the shares.

A contribution to the cash-share premium is the simplest type of equity financing. As a general rule, it requires only a shareholder decision and the procedure can be closed in one day. 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. If the company`s by-law permits, the shares may be repurchased by the company from its shareholders. Dutch law provides for certain restrictions, such as. B (a) the buyback is only possible until the amount of freely distributed reserves; b) only half of the issued share capital can be repurchased and c) the repurchase is not permitted if more than six months have elapsed after the last fiscal year without taking over this year`s annual accounts. The repurchase usually requires a notarized deed of redemption, a shareholder decision and powers to execute the notarial deed.

After the above tasks have been completed, the Board of Directors is not required to convene the General Meeting for the same reason within the next 12 months of the convening. Companies may decide to increase their capital in the form of cash or in-kind contributions. For the capital increase, the share capital of an S.A. can be increased by a contribution in kind or cash by decision of an extraordinary meeting of shareholders (in the presence of a Luxembourg notary).

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