22.1.3 Review of the legal framework: flexible capital rules and open standards

In the past decade, the statutory system of standards regarding the financing of a limited company has been subject to change as well. This has occurred in part as a result of the increased competition between the different national private corporate forms, as in the past few years, a variety of Member States have tried to make their national company laws more attractive to investors. In this scope, many Member States abolished or relaxed formal rules regarding the capital of a private limited company. For this reason, in many jurisdictions it is currently possible to incorporate a capital company with limited liability without contributing any equity. For example, as a result of the implementation of the MoMiG act in 2008, the capital rules for the GmbH have been extensively revised in Germany; in addition, a new ‘capital light’ legal form with limited liability was introduced. In the Netherlands, the coming into force of the Flex-BV Act on 1 October 2012 almost completely abolished the capital protection for the BV.1 In both countries, the regulation of shareholder funding is currently primarily found in the rules regarding distributions to shareholders, which – very briefly – prescribe that shareholders may not withdraw capital from the company if it is reasonably foreseeable that as a result, the company will encounter continuity problems.