Minimum capital
Minimum capital is a concept used in corporate law and banking regulation to stipulate what assets the organisation must hold as a minimum requirement. The purpose of minimum capital in corporate law is to ensure that in the event of insolvency or financial instability, the corporation has a sufficient equity base to satisfy the claims of creditors. In banking and financial regulation it is normally referred to as the capital requirement.[1]
Corporate law[edit]
All public companies within the European Union are required to hold at least €25,000 in capital, although many countries go above this minimum requirement.[2][3] The requirement is e.g. £50,000 in the United Kingdoms (England and Wales), of which at least 25% must be paid up (of the nominal amount and of any premium).[4]
Banking regulation[edit]
See also[edit]
References[edit]
- ^ Armour, John (2006). "Legal Capital: An Outdated Concept?". European Business Organization Law Review. SSRN 910826.
- ^ Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law
- ^ "Minimum capital requirement around the world - DLA Piper Guide to Going Global".
- ^ "Minimum capital in UK - England and Wales - DLA Piper REALWORLD".