What Can I Do If a Capital Increase Has Diluted My Shareholding?

Share Transfers and Shareholding Structure

Prepared by: Constantinople

Dilution of your shareholding following a capital increase does not necessarily mean the transaction is unlawful. The company's genuine financing needs, your opportunity to subscribe for new shares and the reasons for restricting your right are examined together. Joint stock and limited liability company rules differ; merely comparing the old and new percentages does not provide a complete assessment.

Prepare the capital increase resolution, amendment to the articles of association, meeting notices and publications, subscription notices and any management report. The price of the new shares and to whom they are allocated are important. Financial statements, payments requested from shareholders and the transaction's timing are also examined. If documents were sent to you late, keep correspondence showing when and how you received them.

Removal or restriction of the right to subscribe for new shares is subject to the statutory requirements for the relevant company type. An allegation that the majority acted solely to dilute your shareholding must be supported by specific events. The body that passed the resolution may affect the type of action and deadline. Waiting until the increase is registered is not always safe; the resolution date and implementation timetable are assessed together.

Provide the capital increase resolution, subscription notice and final payment date together. Exercising the right, challenging the resolution and seeking interim protection are assessed separately.

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