MKB Juristen drafts custom legal documents
It is best not to cobble together or copy important contracts, terms and conditions, and other legal documents yourself. We help entrepreneurs on a budget with customized legal solutions, clear costs upfront, and practical explanations.
- Custom contracts, terms and conditions, and legal documents
- Budget-friendly and clear about the costs upfront
- Request a free consultation or a no-obligation quote
What is a share premium agreement? It is the recording of a capital contribution to a private limited company (BV) that does not result in new shares: a shareholder contributes money (or assets) to the company, which is recorded as share premium in equity, without changing the share capital or the mutual shareholder structure. In short: you strengthen the BV's balance sheet without altering control or shareholding. The agreement records the contribution, the conditions, and the tax treatment.
The short answer
- What: Agreement in which a shareholder contributes capital to the BV that is booked as share premium, without the issuance of new shares.
- Why: to strengthen equity without changing the shareholder structure.
- Form: informal share premium can be arranged privately (written agreement); formal share premium for a share issuance is handled through a notary.
- Tax: no taxable gain for the BV; increases the acquisition price of the shares in Box 2.
- Reimbursement: possible by a resolution of the general meeting, provided that the statutory conditions are met.
What exactly is a premium agreement?
Share premium is the amount that a shareholder contributes to their shares above the nominal value. In the case of a private limited company (BV) with shares of €1 nominal value that are fully paid up with €100,000, €99,999 in share premium arises. In practice, however, SME entrepreneurs use the term more broadly: a shareholder contributes extra money to their own BV, which is booked to the share premium reserve, without new shares being issued.
The share premium agreement specifies the amount to be paid, that it is recorded as share premium (informal capital), that there are no corresponding shares, and under what conditions the amount may be repaid.
Informal versus formal premium
The distinction determines how you arrange the deposit:
- Formal share premium. Arises from a formal share issuance in which more is paid in than the nominal value. This is done via a notarial deed, because shares are issued.
- Informal share premium (informal capital contribution). A shareholder contributes capital without issuing shares, purely to strengthen equity. This can be done privately via a share premium agreement and a shareholders' resolution — no notary required.
In most SME situations, this concerns informal share premium: the director-major shareholder wants to capitalize his BV without touching the share structure.
Capital contribution without share issuance
The essence of share premium is that it is separate from the share capital. Whoever holds 100% of the shares still holds 100% after the contribution. This is a point of attention when there are multiple shareholders: if only one shareholder contributes a share premium while the shareholding ratio remains the same, that capital indirectly benefits the other shareholders as well. For this reason, SMEs often stipulate that the contributed share premium accrues to the contributor upon repayment (shareholder-specific share premium reserve).
Why do entrepreneurs opt for share premium?
- Strengthening equity. Negative or thin equity is boosted, which helps with financing and solvency.
- No interest obligation. Unlike a shareholder loan, no repayment or interest schedule arises.
- Shareholder ratio remains the same. No dilution, no redistribution of control.
- Tax-free. No profit for the BV; for the shareholder, an increase in the acquisition price in Box 2.
Tax treatment
From a tax perspective, share premium is a capital contribution, not a gain. For a BV, this means that the share premium contribution does not form part of the profit and is therefore not taxable. For the shareholder, the contribution increases the acquisition price of their shares. This is relevant for Box 2: in the event of a later repayment or sale of the shares, a higher acquisition price reduces the taxable benefit.
Be careful regarding informal capital between related parties: non-arm's length contributions or unusual structures may have different tax consequences. Have the accounting records reviewed by an accountant or tax specialist.
Repayment of share premium
Share premium can be repaid to the shareholder at a later date. This is done via a resolution of the general meeting to repay from the share premium reserve. In the case of a private limited company (BV), the distribution test applies: the board must approve and assess whether the BV can continue to meet its due debts after the distribution. If this test is not performed properly and the BV subsequently goes bankrupt, the directors may be held liable. From a tax perspective, a repayment of share premium can take place tax-free under certain conditions, provided it does not exceed the acquisition price; the exact treatment depends on the specific situation.
Honest recommendation
For a single director-major shareholder holding 100% of the shares who informally contributes share premium to their own BV, a share premium agreement is often simple: a short agreement plus a shareholders' resolution and proper bookkeeping by your accountant. In that case, you do not need a lawyer — proper administrative record-keeping suffices.
Legal assistance is advisable whenever there are multiple shareholders, the share premium must remain shareholder-specific, or repayment and tax implications play a role. In such cases, you want to avoid your contribution unintentionally benefiting co-shareholders.
Read more or arrange directly: share premium agreement, draft share premium agreement and have a share premium agreement drafted.
Frequently Asked Questions
A share premium agreement stipulates that a shareholder contributes capital to the BV that is recorded as share premium, without new shares being issued. It strengthens equity without changing the shareholder structure.
Formal share premium arises from a share issuance in which more than the nominal value is paid in and is handled through a notary. Informal share premium is a capital contribution without a share issuance and can be arranged privately via a share premium agreement and shareholders' resolution.
No. No shares are issued with informal share premium. Your shareholding and voting rights remain the same; only the equity of the BV increases.
For a BV, a share premium contribution is not a taxable gain. For the shareholder, the contribution increases the acquisition price of the shares in Box 2, which may reduce a later benefit upon repayment or sale.
Yes, via a resolution of the general meeting to repay from the share premium reserve. In doing so, the board must perform the distribution test and assess whether the BV can continue to meet its due debts.
No. A loan is debt with interest and repayment obligations. Share premium is equity without interest or a repayment schedule. Share premium strengthens solvency; a loan does not.
Since the shareholding structure remains unchanged, contributed share premium in principle also indirectly benefits the co-shareholders. Therefore, stipulate that the share premium is shareholder-specific, so that upon repayment it accrues to the contributor.
