Börsenlexikon: Capital increase

Capital increase is understood to mean all capital measures that are aimed at increasing the equity capital of companies and can be carried out both as internal financing and by way of external financing. The opposite is the capital reduction. Capital increases are mostly based on business reasons and mainly concern corporations (e.g. joint-stock companies), because their capital requirements are high and their liability is usually limited to the assets of the company (there is no separate liability of the shareholders beyond the contribution obligation). In the case of commercial partnerships, the unlimited liability of the private assets of the fully liable partners exists in addition to the assets of the company. These are reasons why capital increases are regulated in detail in the Stock Corporation Act, which applies to stock corporations and partnerships limited by shares.