Contribution in Kind Establishment - Legal Foundations and Contribution in Kind Audit

In a non-cash contribution incorporation, the liberation of the subscribed shares or GmbH interests is not done in cash, but through tangible assets. The non-cash contribution incorporation is possible both in the formation of a stock corporation (AG) or a limited liability company (GmbH) through the contribution of private use objects, and in the transformation of a partnership into a capital company.

Required Characteristics of a Non-Cash Contribution

The items that can be contributed include movable assets, real estate, claims, securities, and other entitlements. After the formation, non-cash contributions are recorded as assets in the balance sheet and thus also serve as collateral against creditors. Consequently, a non-cash contribution must be usable, transferable, assessable, activatable, valuable, and freely available. For example, a vehicle owned by one of the founders can serve as a non-cash contribution. However, a leased car is not transferable, since the leaseholder cannot sell the vehicle to third parties. As a result, a leased car cannot serve as a non-cash contribution. Suitable non-cash contributions generally include: