Additional payments, as well as the loan to the company is one of the several possible ways of financing the company by a member of the company.
The provisions of Articles from 178 to 180 of the Companies Act regulates the following issues related to additional payments: manner of establishing the additional payment obligation, consequences of failure to make additional payment and return of additional payments.
Manner of Establishing the Additional Payment Obligation
The memorandum of association or the resolution of the company’s general meeting may prescribe an obligation on the part of company members, in addition to paying up the subscribed share capital, to make additional payments to the company in proportion to the value of their share in the company. The memorandum of association or the resolution of the company’s general meeting may prescribe a different proportion.
Additional payments do not increase the company’s share capital.
Additional payments may only be in cash.
The resolution of the company‘s general meeting determining the obligation to additional payments is passed unanimously, unless the memorandum of association envisages a different majority for passing such resolution. If the memorandum of association envisages that before mentioned resolution is passed by a different majority, then that resolution binds only the members who have voted for it.
The memorandum of association, i.e. resolution of the company’s general meeting, instead of determining an exact amount of additional payments, may define a maximum amount of those payments. The general meeting passes a resolution on the exact amount of additional payments by a simple majority of votes of all company members, unless the memorandum of association provides a larger majority.
Consequences of Failure to Make Additional Payment
A member of the company is liable to the company for execution of the obligation to make additional payments in the manner in which he is liable for payment of subscribed share capital.
A company member who has transferred his share before fulfilling the obligation to make additional payment is jointly and severally liable with a share transferee for that obligation during a period of three years from the day of registration of the transfer of share in keeping with the registration act.
A company member who has paid, i.e. entered his contribution may be relieved from the duty of additional payment if, within a term of 30 days from the day that obligations becomes due, authorizes the company to sell his share in the procedure of public auction or in other manner.
If, by selling the company member’s share in the procedure of public auction or in other manner, the company achieves the price that is, once the sale costs are deducted, lower than the amount of his obligation for additional payment, the company member remains obliged to pay such difference to the company, but if the company achieves by such sale the price which, after deduction of sale costs, exceeds the amount of his obligation for additional payment, the company shall pay such difference to that company member.
If a company member fails to authorize the company to sell his share pursuant to paragraph 3 of this Article, or if his share is not sold within a term of two years from the day the additional payment obligation becomes due, or within the deadline set forth in the memorandum of association or within the time limit agreed on with that company member for reasons other than due to the failure on the part of the company, the general meeting may pass a resolution to expel that company member from the company, without the right to compensation for the value of his share, by mutatis mutandis application of Article 195 of the Companies Act, within a term of 180 days from the day of the expiry of the prescribed or designated or agreed on time limit.
If the before mentioned conditions are met regarding a number of members of the company who are in default in respect of the additional payment obligation, the decision on expulsion is adopted for all such members.
In case of expulsion, the expelled company member remains liable to the company for additional payment.
Return of Additional Payments
Additional payments may be returned to company members only if they are not needed to cover the company’s losses or for the settlement of the company’s creditors.
Additional payments may not be returned to the company member prior to payment or entry of the total subscribed contribution into the company.
Return of additional payments to company members is conducted by mutatis mutandis application of the provisions of the Companies Act on reduction of the company’s share capital.
In case of company’s bankruptcy, the claim of a company member on the grounds of additional payments is settled only after the company’s bankruptcy creditors are settled fully, with corresponding interest.