die  Kapitalerhöhung

C1

Estimated CEFR level.

/kapiˌtaːlʔɛɐ̯ˈhøːʊŋ/

📈 What Exactly is a Kapitalerhöhung?

Die Kapitalerhöhung is a measure taken by corporations (like an AG - public limited company, or GmbH - private limited company) to increase their Eigenkapital (equity capital). This is typically done by issuing new Aktien (shares) for AGs, or increasing the Stammeinlagen (share capital contributions) for GmbHs. The additional capital can be used for investments, debt repayment, or strengthening the company's financial base.

There are different types of Kapitalerhöhung, for example:

• Ordentliche Kapitalerhöhung: Issuing new shares against contributions (often cash, sometimes contributions in kind). Existing shareholders usually have Bezugsrechte (subscription rights).
• Bedingte Kapitalerhöhung: The increase only happens if certain conditions are met (e.g., exercising options).
• Genehmigte Kapitalerhöhung: The management board is authorized to increase the capital up to a certain amount within a specific period.
• Kapitalerhöhung aus Gesellschaftsmitteln: Conversion of reserves into share capital without new funds flowing into the company (number of shares increases, value per share often decreases).

⚠️ Important: A Kapitalerhöhung can dilute the value of existing shares if current shareholders do not exercise their subscription rights.

Article rules for der, die, and das

🧐 Grammar: The Case of the Article

The word "Kapitalerhöhung" is feminine. Therefore, the article is always "die". It's a compound noun formed from "Kapital" (capital) and "Erhöhung" (increase). Since "Erhöhung" is feminine (nouns ending in "-ung" are mostly feminine), the compound word is also feminine.

Example Sentences

1. Die Hauptversammlung muss der Kapitalerhöhung zustimmen.
   (The general meeting must approve the capital increase.)
2. Durch die Kapitalerhöhung konnte das Unternehmen neue Maschinen anschaffen.
   (Through the capital increase, the company was able to purchase new machines.)
3. Es gab in den letzten Jahren mehrere Kapitalerhöhungen bei diesem Start-up.
   (There have been several capital increases at this start-up in recent years.)
4. Die Details der Kapitalerhöhung wurden den Aktionären mitgeteilt.
   (The details of the capital increase were communicated to the shareholders.)

🏢 When and How is Kapitalerhöhung Used?

The term Kapitalerhöhung is firmly established in the world of business and finance. You'll primarily encounter it in the following contexts:

• Unternehmensberichterstattung (Corporate Reporting): In annual reports, company press releases, especially from Aktiengesellschaften (AGs) and GmbHs.
• Börsennachrichten (Stock Market News): When reporting on stock markets and corporate finance.
• Rechtliche Dokumente (Legal Documents): In articles of association, statutes, and minutes of general meetings.
• Wirtschaftsstudium und -lehre (Business Studies and Teaching): As a key term in corporate finance and company law.

In everyday language outside these specialist circles, the word is less common. It specifically refers to the increase of Eigenkapital (equity) through external or internal measures and should not be confused with raising Fremdkapital (debt capital, e.g., loans).

🧠 Mnemonics and Memory Aids

Article Mnemonic: Think of "die Erhöhung" (the increase). Almost all German nouns ending in "-ung" are feminine (die). Therefore, it's also die Kapitalerhöhung.

Meaning Mnemonic: Imagine a company's "Kapital" (capital) pot 🏺 is almost empty. To fill it up again (erhöhen - to increase), it needs a Kapital-Erhöhung – more money comes in!

🔄 Similar and Opposite Terms

🚨 Caution - Avoid Confusion: Don't confuse Kapitalerhöhung with Kreditaufnahme (taking out a loan) or Fremdkapitalaufnahme (raising debt capital) – these involve debt, not equity.

😄 A Little Joke on the Topic

Der CEO fragt den Finanzvorstand: "Warum brauchen wir schon wieder eine Kapitalerhöhung?"
(The CEO asks the CFO: "Why do we need another capital increase already?")

Antwortet der Finanzvorstand: "Unsere bisherigen Aktionäre sind so begeistert von uns, die wollen unbedingt noch mehr Leute an ihrem Glück teilhaben lassen!" 😉
(The CFO replies: "Our existing shareholders are so enthusiastic about us, they really want to let even more people share in their good fortune!") 😉

📜 Poem about Kapitalerhöhung

Das Konto schmal, die Kasse leer,
(The account is slim, the cash box empty,)
Investitionen fallen schwer.
(Investments are difficult.)
Der Vorstand plant, es muss was sein,
(The board plans, something must be done,)
wir holen frisches Geld herein!
(we're bringing in fresh money!)

Die Kapitalerhöhung naht,
(The capital increase approaches,)
man gibt mehr Aktien aus, im Rat
(more shares are issued, in the council)
beschlossen, klar und transparent,
(decided, clear and transparent,)
damit die Firma weiterrennt!
(so the company keeps running!)

❓ Little Riddle

Ich bin kein Kredit, doch bringe Geld ins Haus,
(I am not a loan, yet bring money to the house,)
vermehre Anteile, teile neu sie aus.
(increase shares, distribute them anew.)
Die Firma stärkt' ich gern mit frischer Kraft,
(I gladly strengthen the company with fresh power,)
bin oft beschlossen von der Aktionärsschaft.
(am often decided by the shareholders.)

Was bin ich? (What am I?)

Solution: die Kapitalerhöhung

💡 Other Information

Wortzusammensetzung (Word Composition):

The word "Kapitalerhöhung" is a compound noun, composed of:

• Das Kapital: Capital, financial resources, assets.
• Die Erhöhung: The increase, the process of rising or augmenting.

Together, it describes the process of increasing a company's capital.

Relevanz (Relevance): Kapitalerhöhungen are central instruments of corporate finance and often have significant effects on a company's valuation and its share price.