The fixed shared capital is the classic form of share capital. The share capital can only be modified if a decision is made within the framework of an Extraordinary General Assembly meeting. As a result, if you decide to modify the share capital of your company, it will imply a modification of your company’s Articles of Association. This means that modifying your fixed share capital implies the completion of paperwork, and some additional fees (fees for legal publication, and court fees)
The fixed share capital is thus more stringent than the variable capital. However, it has some significant perks, as it enables the company to be perceived as more stable. Indeed, the entrance of new shareholders is more regulated, which helps to avoid conflicts between shareholders with divergent interests, and healthier relations between founders which promotes growth. Furthermore, thanks to the stability provided by a fixed share capital, these companies are viewed more positively by financial institutions than those with variable share capitals.
Putting a provision providing for the variability of the share capital enables you to modify the share capital within a defined range, without having to pay any additional administrative fees generated by the completion of the paperwork implied. Shareholders can also take back their shares whenever they want and without any additional fees.
The variability of share capital can potentially be perceived negatively by public and private investors, as it may imply that the commitment of the founders in the first few years can be challenged.
The variable capital can thus be chosen as an option at Alf.
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