What are the functions of the company assets of an AG?
The assets of a public limited company (AG), especially the so-called equity capital, have the main function of being basis of liability of the investors.
Since the stockholders have no personal liability, the company assets form the basis of accountability. Exactly because the company assets play this role there is an expressed importance put on the maintenance of these assets. Part of the company assets represent the equity capital, which by law may not be purposefully reduced.
The capital equity therefore simultaneously represents the creditworthiness of the company: in practice, loans are often only approved when there are sufficient reserve funds available. In the case of a sole proprietor for instance there is a minimum capital, the owner of which is far more liable for with his or her own assets, whereas with an AG only the company assets can be seized.
In order that the capital assets of an AG give enough financial security, a certain level of said assets must be maintained. This capital equity ensures such a minimum level of capitalization, which hinders a wilful reduction in company assets as long as the equity investment of the company is not at least as high as the capital equity.
This does not mean that the capital equity is blocked or inaccessible, as many young entrepreneurs initially believe. Generally speaking the equity can be used as the company sees fit. There is the simple requirement that the use of the equity must be in the interest of the business. Therefore, expenditures should only be made with the goal of at a minimum an equal return on investment, if not profit.
