Evolution of the share capital function, as a tool for overcoming economic turmoil

• Authors: Lai, Luigi

Abstracts

EN

The paper aims at showing that a lower share capital in limited liability companies can be a successful tool for overcoming the consequences of an economic crisis. In a period of economic turmoil insolvency is more than a simple risk. For such a reason the limited liability company shareholders, thanks to the complete financial autonomy given by the share capital, have a shield from the legitimate expectations of the creditors. The share capital protects the entrepreneur and at the same time allows faster fresh starts; nevertheless, in order for that to happen, the share capital cannot be an additional burden, instead has to be a simple formal element. The article demonstrates that in the last 50 years is visible a shift in the concept and function of the share capital. During the 50’s of the past century, the share capital was considered as a guarantee for the company’s creditors. Nowadays the European legislators across Europe are heading to consider the share capital as a mere formal element disconnected by any due quantity.

• Publisher: Instytut Naukowo-Wydawniczy "SPATIUM"
• Journal: Central European Review of Economics & Finance
• Year: 2017
• Volume: 18
• Issue: 2
• Pages: 19-29

Contributors

author

Lai, Luigi