The revision of the new company law has already been underway since 2014 and was finally adopted by Parliament in 2020. Most of the new provisions will come into force on January 1st of 2023. New rules on legal reserves are part of the changes that will apply from then on.
Legal Capital Reserves
The repayment of the legal capital reserve to the shareholders will be allowed as long as the paid-in capital and other reserves, after deduction of any losses, exceed half of the share capital entered in the commercial register. For the repayment to the shareholders to be allowed, a certified auditor must confirm that, based on the balance sheet, the repayment does not jeopardize obligations towards creditors and that there is no reason to fear bankruptcy within the next twelve months.
Legal Revenue Reserves
As in the past, 5% of the annual profit must be allocated to the legal revenue reserve until the paid-in capital and other reserves together reach 50% of the capital entered in the commercial register. The second allocation, i.e., the distribution of a super dividend under the old law, is abolished.
Optional Revenue Reserve
If the long-term prosperity allows it and taking into account the interests of all shareholders an optional revenue reserve may be set up. The general meeting decides on the use of this reserve, always respecting the legal order of loss compensation.
