What is Subscribed Capital

Subscribed Capital is the capital that a partner, shareholder or quotaholder of a company undertakes to deliver to compose the assets of the legal entity.

This subscribed capital comes into existence as of the formal act known as subscription, in which the individual contracts the obligation to transfer assets or rights to the legal entity, in order to pay in its share capital .

Understanding Subscribed Capital

Every company has a share capital. This is the capital that the company has at its disposal to operate because it was delivered by its partners, shareholders or shareholders. We say that the partners make up the company’s share capital.

However, the share capital is not always paid up immediately. Instead, the partners can inform the capital to be paid in, with the commitment to deliver it at a specific later time. This is the subscribed capital.

The promise is recorded in the company’s articles of association, or in a document produced by the Extraordinary General Meeting.

Subscribed Capital to be Paid or Subscribed Capital to be Paid

Upon subscription, there is subscribed capital. However, the subscription is just a commitment, a promise. Therefore, at first, we say that it is a subscribed capital to be paid in.

Subsequently, this commitment must be fulfilled, that is, the capital must be effectively delivered to the company. When this happens, we say that it is paid-in subscribed capital.

Nature of subscribed capital

The subscribed capital does not necessarily have to be paid up through “cash”. Various types of assets and rights can also be assigned to the company, for the amount indicated in the subscription.

Imagine, for example, that a partner of a company has committed to pay R $ 100 thousand, that is, there is a subscribed capital of R $ 100 thousand in the name of that partner. However, he does not have that cash value.

This partner has a credit of R $ 100 thousand, that is, he has the right to receive this amount from a debtor. If this partner wants, he can assign the credit to the company. So, it is the company that becomes the creditor of that debt, and the subscribed capital is paid up.

Another example: the partner has a land estimated at R $ 100 thousand. He can transfer this land to the company, which becomes the owner. This is another way of paying in the subscribed capital.

Deadline for payment of subscribed capital

After the subscription is made, there is a deadline to pay the subscribed capital. This term is fixed in the company’s articles of association. In addition, it is not necessary for the capital to be fully paid for the company to start operating.

However, according to the Civil Code, as long as the company’s share capital is not fully paid up, the partners are jointly and severally liable for the missing part.

To better understand, let’s look at an example. Suppose that, in a fictitious company Alpha Ltda, there are three partners: João, Antonio and Carlos. Each partner subscribes R $ 100 thousand for the company’s capital, totaling a capital of R $ 300 thousand. However, only Antonio and Carlos pay their share.

Normally, in a limited partnership, each partner’s liability is restricted to their shares. In this case, each partner has 1/3 of the shares. However, as long as João does not pay the subscribed capital, the three are jointly and severally responsible for his share in the share capital.

Therefore, if someone sues the company Alpha, Antonio will answer for his 1/3 of shares and Carlos will also answer for his 1/3 of shares; however, any of the partners will be able to answer for 1/3 of João’s shares.

Thus, the fact that there is subscribed capital not paid in represents a problem, as it breaks the security of the limitation of liability. For this reason, the Civil Code also provides that if a partner does not pay its subscribed capital within the term, it will be considered a remission and may be excluded from society.

 

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