Summary

The aim of company law, as with all other branches of law, is to serve the interests of society as a whole. The objectives of regulating share capital, as one area of company law, can also be no different. These objectives have been expressed in the preamble to the second directive on company law, where the aims of the directive are listed as ensuring the minimum level of equal protection for shareholders and creditors through the disclosure of share capital and the preservation of share capital. There is a clear stipulation forbidding unjustified payments to shareholders from the share capital, and a ban on a public limited company acquiring its own shares. According to the directive there is also an aim that the laws regulating the increase or decrease of share capital ensure equal treatment of equally-positioned shareholders, that the principles of protecting creditor claims in the case of the reduction in share capital are followed, and that this be harmonised in the member states.

Such objectives in the legal regulation of share capital have provided the basis for the relevant norms in continental European law for a long time. The issue, however, is whether these objectives can even be achieved through the rules for share capital.

The author draws the conclusion that the legal regulation of share capital today is far from ideal and believes that reform is necessary. The question here is as to how extensive such a reform could be, and whether it would mean fixing the existing system, selecting a new system, or choosing not to regulate this field at all.