The share capital can be set by taking into account the spendings that are necessary for starting up the business: recruitment processes, purchases of goods, etc.
For a long time, the amount of share capital was a factor that could reassure creditors, bankers, and clients on the availability of cash flows from the company, especially if the company turned out not to have the success that was at first expected.
This rationale is now expired. Indeed, now, 50% of your share capital must be available in cash flows for the closure of the accounts.
This rule is now essential for some business sectors, especially when it comes to buying goods or for cash-flow needs. But for a young startup that is only testing a market or an idea, investments are often blocked by this obligation. Instead of investing, the law is indeed forcing you into hoarding.
What is then the solution?
Your business model is part of the answer, but if you incorporate a startup, 1€ can be enough for your capital share, as other contributions can be made through the shareholders’ current account: one or various shareholders of the company can indeed consent a loan to the company, that the latter will have to refund accordingly to the terms that have been provided for in the current account agreement. In this way, it’s only when your business will start to grow and to attract new investors that you will be able to increase the share capital of your company.
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