Following the notarization of the investment agreement (by which the investor will inter alia be obliged to pay certain funds to the startup for a certain number of new to be created shares based on the pre-money valuation) and the shareholders' agreement (entered into to regulate the internal relationship of the startup's shareholders) a capital increase of the startups share capital has to be registered with the competent commercial register.
The funds to be paid to the startup will be split into nominal amounts and payments into the free capital reserves; the former in direct exchange for the shares, the latter to bolster the startups financial reserve. Once every investor has paid his respective nominal amounts to the startup's bank account, the management of the startup will provide the notary with excerpts from their account to prove to the notary that all nominal amounts have been duly paid.
Without this proof, the notary will not register the share capital with the commercial register. Further, every new investor must have signed a subscription declaration in notarially certified (beglaubigt) with respect to its new shares. If not present in person (or, in case of an entity, if no legal representative of the investor is available to be present at the notary) powers of attorney must have been issued up-front together with certificates of existence, representation and good standing (with notarial certification and apostille, if applicable). As soon as all powers of attorney, certificates, notarially certified subscription declarations and funds have been obtained and such facts have been proven to the notary, the notary will submit the application for capital increase to the commercial register, which will then assess itself if all documents sufficiently provide the evidence required. As soon as the capital increase is registered, the investors are considered shareholders of the startup.