Capital Increase of a Company in Belgium: Complete Procedure

Why Increase Capital?

Capital increase allows:

• Financing growth: investments, hiring, development
• Strengthening financial structure: improving equity/debt ratio
• Credibilizing the company: reassuring partners and banks
• Welcoming new partners: bringing in investors

Types of Capital Increase

1. Cash Contribution

Shareholders (current or new) contribute liquid funds to the company.

Advantage: immediately strengthens cash

Release: at least 1/4 upon subscription, balance within 5 years maximum

2. Contribution in Kind

Shareholders contribute assets other than cash:

• Equipment, materials
• Vehicles
• Real estate
• Goodwill
• Receivables

Obligation: report from a statutory auditor evaluating the contribution (unless all shareholders waive it)

3. Reserve Incorporation

Transformation of available reserves (undistributed profits) into share capital.

Advantage: no external contribution needed, no cash inflow

4. Debt-to-Equity Conversion

Creditors (e.g., shareholder loan) waive their claim in exchange for shares.

Advantage: improves balance sheet by converting debt into equity

Capital Increase Procedure

Step 1: Extraordinary General Assembly

The EGA decides on the capital increase and votes on:

• Amount of increase
• Type of contribution (cash, in kind, incorporation)
• Subscription terms
• Suppression or not of existing shareholders' preferential rights

Required majority: 3/4 of votes for an SRL

Step 2: Auditor's Report (if contribution in kind)

If the increase includes contributions in kind, a statutory auditor must:

• Evaluate the contributed assets
• Verify they correspond at least to the value of issued shares

Cost: €1,500 to €5,000 depending on complexity

Step 3: Subscription and Release

• Subscription: commitment to purchase new shares
• Release: actual payment of money or delivery of assets

For cash contributions:

• Minimum release: 1/4 upon subscription
• Balance must be released within 5 years

Step 4: Notarial Deed

The capital increase must be certified by a notarial deed that includes:

• EGA decisions
• Auditor's report (if applicable)
• Proof of release

Notary cost: €800 to €2,000

Step 5: Articles Amendment

Articles must be updated to reflect the new amount of share capital.

Step 6: Publication in Belgian Official Gazette

The notarial deed is published in the Annexes of the Belgian Official Gazette.

Cost: approximately €200

Step 7: CBE Update

The business counter updates the company information in the Crossroads Bank for Enterprises.

Capital Increase Costs

Practical Example

Initial Situation

• Company: BetaTech SRL
• Current share capital: €18,600 (100 shares)
• 2 shareholders: A (50 shares) and B (50 shares)

Operation

Capital increase of €100,000 through cash contribution from new shareholder C.

New Distribution

• Share capital: €118,600 (1,186 shares of €100 each)
• A: 50 shares (4.2%)
• B: 50 shares (4.2%)
• C: 1,086 shares (91.6%)

Dilution: shareholders A and B see their participation diluted to less than 5% each.

Preferential Right

Existing shareholders have a preferential right allowing them to subscribe in priority to new shares, proportionally to their current participation.

Suppression of Preferential Right

To welcome a new investor, the GA can decide to suppress this right:

• 3/4 majority in SRL
• Special report from management body justifying suppression

Capital Increase Through Authorized Capital

The CSA allows capital increase by management body decision (without GA) if:

• Articles provide for authorized capital
• Management body acts within set limits
• Maximum duration: 5 renewable years

Advantage: more flexibility and speed

Conclusion

Capital increase is a strategic operation to finance your company's growth. It requires good preparation and compliance with strict formalities.

Need support for your capital increase? LegalBelgique guides you through all steps of your capital increase.