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Express capital increases: a key tool for businesses

LetsLaw / Commercial Law  / Express capital increases: a key tool for businesses
Express capital increases

Express capital increases: a key tool for businesses

Capital increases have become a fundamental instrument for companies to finance new projects, expand in the market, or reduce their debt levels. Within this context, express capital increases stand out as a fast and efficient procedure to increase a company’s share capital, allowing them to respond to urgent financing needs.

What is an express capital increase?

An express capital increase is an operation through which a company increases its share capital in a short period, simplifying the usual processes. This mechanism is designed to facilitate the quick and effective acquisition of resources, making it ideal for situations where time is a determining factor.

Unlike traditional capital increases, these operations are characterized by their speed and reduced bureaucracy, making them a useful tool for growing companies or those facing financial contingencies.

How do express capital increases work?

The procedure for carrying out an express capital increase follows the same legal foundations as a conventional increase but with reduced timeframes and streamlined procedures. The main steps include:

  1. Approval at the general meeting: the operation must be approved by the company’s shareholders or partners at a general meeting. During this meeting, the terms of the increase, such as the amount and execution method, are established.
  2. Issuance of new shares or equity stakes: once the operation is approved, new shares or equity stakes are issued, which can be subscribed to by current shareholders or third parties.
  3. Subscription and payment: interested parties make the corresponding payment, either through cash contributions or non-monetary contributions (assets or rights with economic value).
  4. Registration in the Commercial Registry: finally, the operation is registered in the Commercial Registry to ensure its legal validity and public disclosure.

 

This express version optimizes the process, enabling companies to obtain the necessary funds in a considerably shorter timeframe.

Benefits of express capital increases

The advantages of these operations are numerous. Firstly, they stand out for their speed, allowing companies to access resources in a very short time. Additionally, streamlined procedures reduce bureaucratic burdens, resulting in lower associated costs.

Another significant benefit is their flexibility, as companies can tailor the conditions of the increase to their specific needs. Lastly, express capital increases are also attractive to investors, who find in these operations a quick and clear way to participate in a company’s equity.

Legal and regulatory considerations

While express capital increases are faster, it is essential to comply with all legal obligations to ensure their validity. This includes properly convening the general meeting, respecting the preemptive subscription rights of shareholders, and registering the operation with the Commercial Registry.

In Spain, the National Securities Market Commission (CNMV) oversees these types of operations, particularly in listed companies, to ensure they are conducted transparently and protect investors’ rights.

Practical examples: Airtificial’s experience

A recent example of the use of express capital increases in Spain is the case of Airtificial. In December 2024, this company became the first listed firm to use this mechanism, raising 20 million euros. Thanks to the approval of the European Commission, bureaucratic procedures were significantly reduced, allowing the operation to be completed in record time.

This case demonstrates the effectiveness of express increases in meeting financial commitments and improving a company’s competitive position in the market.

Recommended procedure for an express capital increase

To carry out this type of operation, it is essential to have the support of experts in corporate law who can advise at every stage of the process. Additionally, it is advisable to carefully plan the objective of the increase and clearly and transparently communicate the details of the operation to shareholders and the market.

Conclusion

Express capital increases represent a pragmatic and effective solution for companies that need to raise funds quickly. Their implementation allows businesses to address immediate needs, whether to finance projects, optimize their financial structure, or seize market opportunities.

However, the speed and simplicity of this mechanism should not compromise the rigor of its execution. A well-structured process that meets all legal and regulatory requirements is crucial to avoid risks and ensure the operation’s success. Therefore, before undertaking an express capital increase, it is essential to have a clear strategy and adequate advice with lawyers for capital increase to fulfill legal obligations and protect the interests of the company and its shareholders.

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