 THE SHAREHOLDERS’ PREFERENTIAL RIGHT OF SUBSCRIPTION AT THE INCREASE OF THE TRADING COMPANIES' REGISTERED CAPITALAlexandra Gabriela Rolea (alexandra.rolea@yahoo.com)
No 41, Social Responsibility, Ethics and Sustainable Business from Bucharest University of Economic Studies Abstract: Nowadays, private investors are confronted with serious financial challenges. Therefore, business decisions have to be made on the spur of the moment, however taking into consideration the relevant legal provisions and the long-term implications of these decisions on the company that they run. More often than not, an amendment of the company's articles of association is required, whether there is an increase or reduction of the registered capital, an alteration of the company’s objects clause or legal status, a merger or a downsizing, so on and so forth. The increase of the registered capital through new contributions or by compensating the liquid and matured claims on the company with its own shares requires that the shareholders' preferential right to subscribe the newly issued shares or convertible bonds is observed and restricted or suppressed only under the mandatory provisions stipulated by Company Law and Capital Market Law. Any resolution of the Extraordinary General Meeting of Shareholders or of the delegated administrative or management body on capital increase made in violation of the shareholders' preferential right of subscription is annullable. Consequently, the topic of this article is extremely relevant for both the juridical and economic doctrine and for a lawful corporate governance. In dealing with the above-mentioned issues, the author begins with the notion and legal characters of the preferential right of subscription, its holders, the price and period within which the right may be exercised. Following this, the study examines the legal consequences of the exercise of the preferential right of subscription and the withdrawal or restriction of the right under the relevant legal provisions. The article also refers to the trading of this right inside or outside a regulated market and to the special situation represented by the privatization of the company. Finally, a last short section of the paper is dedicated to the legal action in annulment of the resolution on capital increase made in violation of the shareholders’ preferential right of subscription. The conclusions of the study refer to the main circumstances in which an in-depth knowledge of the statutory provisions on the shareholders preferential right of subscription is necessary to both management bodies and shareholders of the company and contains some proposals for the amendment of the current legislation with a view to enhance the protection of the minority shareholders Keywords: preferential right of subscription; increase of registered capital; constitutional amendments; trading companies; the Extraordinary General Meeting of Shareholders (search for similar items in EconPapers) Published in Working Papers Series on Social Responsibility, Ethics & Sustainable Business Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:aes:icsrog:wpaper:41 Access Statistics for this paper More papers in Social Responsibility, Ethics and Sustainable Business from Bucharest University of Economic Studies Contact information at EDIRC. |
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