Sec. 7 SEC Act 1933
(a) The registration statement … shall contain the
information, and be accompanied by the documents
specified in Schedule A …
(b) The Commission shall prescribe special rules with
respect to registration statements …
www.sec.gov/edgar.shtml
Schedule A:
… (25) a balance sheet as of a date not more than 90 days
prior to the date of the filing … showing all of the
assets of the issuer, the nature and cost thereof,
whenever determinable, in such detail and in such form
as the commission shall prescribe (with intangible
items segregated) …
© Prof. Dr. Christine Windbichler, LL.M.
Humboldt-Universität zu Berlin
Edgar = Electronic Data Gathering
Analysis and Retrieval System
(10-Q & 10-K)
Financial Reporting and Disclosure
Requirements for Listed Corporations
Legal Capital (2nd EC Directive)
Assets
Legal Capital (2nd EC Directive)
Liabilities
450,000 Investments (Fixed
400,000 Stated (Subscribed)
Assets; Property, Plant &
Equipment))
Assets
450,000 Investments
Capital
50,000 Reserves
50,000 Reserves
?
150,000 Trading (Current) Assets
100,000 Provisions
100,000 Receivables
250,000 Debts
700,000
700,000
© Prof. Dr. Christine Windbichler, LL.M.
Humboldt-Universität zu Berlin
Financial Reporting and Disclosure
Requirements for Listed Corporations
-100,000 Loss
150,000 Trading Assets
100,000 Provisions
100,000 Receivables
250,000 Debts
700,000
700,000
© Prof. Dr. Christine Windbichler, LL.M.
Humboldt-Universität zu Berlin
Legal Capital (2nd EC Directive)
Assets
450,000 Investments
Liabilities
400,000 Stated Capital
Legal Capital (2nd EC Directive)
Liabilities
300,000 Stated Capital
Financial Reporting and Disclosure
Requirements for Listed Corporations
Assets
450,000 Investments
50,000 Reserves
Liabilities
200,000 Stated Capital
50,000 Reserves
+/- 0 Loss / Profit
100,000 Profit
150,000 Trading Assets
100,000 Provisions
150,000 Trading Assets
100,000 Provisions
100,000 Receivables
250,000 Debts
100,000 Receivables
250,000 Debts
700,000
700,000
700,000
700,000
© Prof. Dr. Christine Windbichler, LL.M.
Humboldt-Universität zu Berlin
Financial Reporting and Disclosure
Requirements for Listed Corporations
© Prof. Dr. Christine Windbichler, LL.M.
Humboldt-Universität zu Berlin
Financial Reporting and Disclosure
Requirements for Listed Corporations
1
Legal Capital (Allianz AG 2005, in T. €)
Legal Capital (2nd EC Directive)
450,000 Investments
Liabilities
400,000 Stated Capital
50,000 Reserves
- 100,000 Loss
150,000 Trading Assets
100,000 Provisions
100,000 Receivables
250,000 Debts
Corporate Piggybank
Assets
Assets
77,482,290 Investments
3,549,207 Receivables
© Prof. Dr. Christine Windbichler, LL.M.
Humboldt-Universität zu Berlin
Capital
7,224,308 Retained
245,577 Prepaid
…… Provisions/Debts
Earnings
Expenses
Financial Reporting and Disclosure
Requirements for Listed Corporations
• Shareholder opportunism?
• Management opportunism?
• Transparency?
Financial Reporting and Disclosure
Requirements for Listed Corporations
© Prof. Dr. Christine Windbichler, LL.M.
Humboldt-Universität zu Berlin
• Change of articles
• Coverage of new capital by contributions: legal
technique
• Valuation problems
• Price
• Preemptive rights
• purpose?
• mandatory?
• see § 186 AktG
• 2nd Directive
Financial Reporting and Disclosure
Requirements for Listed Corporations
Financial Reporting and Disclosure
Requirements for Listed Corporations
2nd Directive regarding the formation of public limited
liability companies and the maintenance and alteration of
their capital, 77/91/EEC
• Minimum legal capital
• Shares may not be issued below their
accountable-par
• Issuance of shares for non-cash-consideration
requires valuation by independent experts
• Acquisition by the company of its own shares is
subject to restrictions
• In case of capital reduction, Member States lay
down creditor’s rights to obtain security
© Prof. Dr. Christine Windbichler, LL.M.
Humboldt-Universität zu Berlin
Financial Reporting and Disclosure
Requirements for Listed Corporations
Dividends
Capital Increase
© Prof. Dr. Christine Windbichler, LL.M.
Humboldt-Universität zu Berlin
82,115,145
700,000
What does Legal Capital do for Creditors?
© Prof. Dr. Christine Windbichler, LL.M.
Humboldt-Universität zu Berlin
20,576,431 Additional Paid in
468,843 Other
82,115,146
700,000
Liabilities
1,039,462 Stated Capital
• Balance sheet profits (§ 57 III AktG)
• “Nimble dividends” (out of trading profits for the
accounting period without regard to losses made in
previous years)
• Realized profits made on the sale of a fixed asset
• Unrealized profits on revaluation of fixed assets
• Accumulated profits of previous years
Restrictions:
Solvency test
• Equity meaning
• Bankruptcy meaning
© Prof. Dr. Christine Windbichler, LL.M.
Humboldt-Universität zu Berlin
Financial Reporting and Disclosure
Requirements for Listed Corporations
2