When an entrepreneurial company (UG) has built sufficient legal reserves - art. 5a sec. 3 GmbHG (German Companies Act) - in order to be able to establish the minimum share capital of a German GmbH, it may issue a shareholder resolution - art. 57c GmbHG - for the legal reserve to be converted into share capital.
However, a mandatory requirement for the conversion is the examination of the last year-end report of the UG - art. 57e GmbHG - by a certified auditor or a sworn accountant.
Although the auditor's fee can be negotiated, several thousand euros would have to be budgeted for this purpose.
An increase in the share capital of the UG can also be achieved by non-monetary resources (cars, machinery, land, etc.), which would, however, entail further costs (expert opinion, asset foundation report, etc.).
Cost-effective, faster and more efficient is a shareholder resolution for a money deposit into the bank account of the company by the shareholders up to the amount of the minimum share capital of a German limited liability company. In this case, the legal reserve can be dissolved and is then at the free disposal of the company - art. 5a sec. 5 GmbHG.
In all variants, a notarized certification of the shareholder resolution is mandatory, as this changes the articles of association.
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MBA for Finance and Financial Services (UK), Steuerfachwirt (GER)