The small equity capital LLC form of business was introduced in 2011 to encourage those individuals who do not have sufficient capital to form a standard LLC.
To create such an LLC, it is enough to have equity capital of 1 euro. But since the legislator considered this form as an intermediate stage before the transition to an LLC with standard equity capital, a number of restrictions were introduced.
LLC with small equity capital
Amount of equity capital: from 1 to 2799 euros.
Founders/owners of shares: only individuals who are not owners of shares in other LLCs with small equity capital.
Number of founders/owners of shares: up to 5 people inclusive.
Member of the board: only from among shareholders.
Extraordinary dividends: payment of extraordinary dividends is prohibited.
Mandatory reserves: annual deduction of 25% of annual profit to mandatory reserves for subsequent crediting to equity capital or repayment of losses.
LLC with standard equity capital
Amount of equity capital: from 2800 euros.
Founders/owners of shares: any individuals and legal entities.
Number of founders/share owners: no restrictions.
Member of the Board: no restrictions.
Extraordinary dividends: payment of extraordinary dividends is permitted if specified in the articles of association.
Required reserves: no requirement.
Previously, an LLC with small capital had an additional “bonus” in the form of no requirement for the mandatory entry of fixed capital into a current account. This made it possible to register a company without first opening a bank account, but from July 1, 2023, this norm was abolished.
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