EUR; Kapitalo pakankamumas – 14,13 % (LB nustatytas normatyvas bankui – ne Medicinos banko akcininkų susirinkime nuspręsta banko kapitalo bazę Keywords: ownership capital; capital adequacy; normative capital; economic capital; risk capital; buffer capital; nuosavas kapitalas; kapitalo pakankamumas;. Kapitalo pakankamumas. 7. Council Directive 93/6/EEC of 15 March on the capital adequacy of investments firms and credit institutions. 8.

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Remote access to EBSCO’s databases is permitted to patrons of subscribing institutions accessing from remote locations for personal, non-commercial use. The national laws of the Member States have to define considerable loss of the capital within the meaning of the Second Directive; however, its limits may not exceed half of the authorized capital.

In the next sections the author reveals a few mechanisms which are used in some of EU Member States. In the present article, the author applies a systematic analysis, comparative, logical, document analysis methods and other general research kaapitalo.

Hence, the minimum capital does not reflect the real financial situation of the company; rather it is informative of something creditors do not care for—whether shareholders contributed less or more at the beginning of the venture. First of all, creditors usually charge adequate interest rates. The effect of this provision was that it required directors of a public company which has suffered a serious loss of capital i.

Theory, Structure and Operation. It is argued that the minimum capital requirement in private companies in Europe not only fails to efficiently fulfil its abovementioned functions but also is costly and unjustified. Generally speaking, the minimum capital requirement is a rule that requires incorporators to contribute assets of at least the specified minimum value to Ewang, F. Capital adequacy is further stated in Article 17 of the Second Directive. Systematic Research and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission.

It would be fair and proportional to justify the higher initial capital requirement only as a mechanism to prevent the establishment of frivolous companies. Among other amendments of and supplements to the Law on Companies, it was proposed to decrease the initial capital for private companies to LTL 1, approximately EUR Systematic Research is the property of Management of Organizations: Other explanation is that the purpose of the paid-in capital is that a company should have sufficient funds to meet its initial needs after incorporation so that the risk of the early insolvency is minimized.


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Hence, because shareholders were able to limit their liability to the capital actually invested even in small firms, minimum capital rules started to be viewed as a way to protect creditors. Therefore, what regards private companies pakankamunas the future, the costly and non-effective requirements on the authorized capital should be reduced and the application of alternative methods for creditor protection should be encouraged.

Copyright of Socialiniu Mokslu Studijos is the property of Mykolas Romeris University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. Until now, the Lithuanian legal doctrine has not paid much attention to the analysis of the minimum capital rules in private companies. Arguments for a Minimum Capital Requirement Before probing into the reasons for the reform of the minimum capital requirement, it is necessary to analyze what the minimum capital rule has originally aimed to achieve.

It is common for scholars to argue that the minimum capital creates barriers in jurisdictions where it is set at a high value. Even if only one sophisticated creditor has imposed such covenants on a corporate debtor, all the creditors of that company will gain protection from wrongdoing. Arguments against a Minimum Capital Requirement The proponents of the abolition of the minimum initial capital rule see the prevalence of creditor self help through contractual covenants, personal securities of shareholders, and other ex post creditor protection mechanisms.

Minimum Capital Does Not Efficiently Protect Creditors An initial capital requirement operates when the company commences its commercial activity. What is more, shareholders can divert assets from the company by means of distribution of dividends, salaries, etc. That means that a great part of business risks is shifted to creditors.

This article reveals arguments for and against the initial minimum capital of private companies. As pointed out by the European Court of Justice20, such creditors are able to negotiate on the terms of their contracts. That is why the author agrees with the opponents of the minimum capital requirement: Besides, the price of mandatory liability insurance might be very high and the insurance requirement would be an even more burdening rule than the minimum capital requirement.

At the European Community level, for the first time, the rules for maintaining capital in public limited liability companies were entrenched in the Second Council Directive of 13 December the Second Directive. Recently, under the current conditions of economic recession, creditors also ask for personal securities of shareholders for the obligations of the company.


The paper is devoted to a problem most urgent today in financial management of commercial banks: Due to the business liberalization in the nineteenth century, entrepreneurs were finally able to form their own companies and limit their liability. However, in practice in the EU, Lithuania as wella company may totally deplete its initial legal capital by incurring substantial losses,18 it can reach a point where equity is lost and the risk of business is entirely shifted to creditors.

What is more, some authors23 argue that involuntary creditors can even benefit from the covenants binding upon the company and concluded with sophisticated creditors. Not a single insurance sum would be satisfactory across industries, firms of different sizes or even production technologies.

When a company is in financial distress, its shareholders and directors may decide to award the company some additional financial aid or to continue their business rather than to initiate insolvency procedure.

Limited liability supposes that creditors of a private company are deprived of the possibility to seek satisfaction for their claims against the shareholders. It should be noted that in December the amendment to the Draft Law on Companies45 was submitted to the Parliament of the Republic of Lithuania. The basic idea is that through limited liability shareholders confine their losses only to the amount invested; however, may gain unlimited profits.

This abstract may be abridged. Whiteboard – Federal Reserve Bank of St.

Problem of Ownership Capital Adequacy in Bank Financial Management and its Solutions.

Law on Companies of the Republic of Lithuania. According to this, the minimum paid-in capital is deemed to furnish the company with a material basis for its commercial activities.

It was argued that a decrease of the initial capital requirement would facilitate the incorporation of limited liability companies; thus, it would stimulate the establishment of private companies which could be regarded as the best legal form for promoting small and medium business in Lithuania.

Oxford University Press, Finally, it should also be noted that once an insurance company becomes a contract creditor, it itself gets a very high risk of liability.