Vermögensbindung im Aktienrecht

The principle of capital preservation was first introduced in 1843 as a legal barrier to protect against the fraudulent looting of stock corporations in an era basically void of accounting regulation. Since then, the German statutory capital requirement has outlived its historic purpose and endured as an arcane but still valid impediment to capital formation. Today, this rigid regulation of, in many cases, unobjectionable transactions between shareholders and the corporation creates unnecessary legal pitfalls, particularly for foreign investors and international creditors, hidden in the otherwise business friendly and generally economic efficient German legal framework. Based upon an economic analysis of the current statutory framework, the author develops a policy proposal for a less invasive, market-based governance system.