The contribution of a receivable in kind to the capital of an EOOD or OOD may be made both upon the incorporation of the company and upon a subsequent increase of its capital.

What receivables may be contributed in kind?
Most often, the receivables contributed in kind to the company's capital are the additional cash contributions made by the partners or by the sole owner of the capital which the company is unable to repay.

In addition, receivables under loan agreements may also be contributed in kind. Such loans may have been granted to the company itself by the partners or the sole owner, or they may also have been extended to third parties. Since the in-kind contribution essentially constitutes a transfer of a receivable (assignment), the third-party debtor must be notified of the assignment.

Other types of receivables may also be contributed in kind, including those under contracts for:

  • Lease,
  • Supply,
  • Novation,
  • Sale and purchase,
  • Assignment and others.

An in-kind contribution may be made either of the entire receivable or of part of it – of the principal only, or of the principal together with the interest.

Procedure for the in-kind contribution of a receivable
The procedure for contributing a receivable in kind to the company's capital involves several steps:

1. Valuation of the receivable
To carry out the valuation, an application is submitted to the Registry Agency. Documents certifying the existence of the receivable and relevant to its valuation are attached to it, such as:

  • Contracts for loan and annexes thereto,
  • Minutes of the general meeting (ОС) for additional cash contributions,
  • Accounting documents,
  • Bank statements,
  • Transfer orders and others.

The valuation is carried out by three experts appointed by the Registry Agency.

Upon the appointment of the experts, their remuneration is also determined, which depends on the type and number of receivables being valued.

The experts have a period of 14 days to prepare the valuation. This valuation determines the maximum monetary value of the company shares that the contributor may receive in exchange for the in-kind contribution. Nevertheless, the articles of association may specify a value lower than the valuation made.

2. Entry of the in-kind contribution in the Commercial Register
The in-kind contribution of the receivable is entered in the Commercial Register together with the instrument of incorporation of the EOOD or the articles of association of the OOD. Notarisation of these documents is not required.

The following must be attached to the application for entry of the in-kind contribution:

  • The experts' report,
  • The instrument of incorporation or the articles of association (with personal data redacted),
  • Loan and assignment agreements and annexes thereto,
  • Minutes of the general meeting for additional cash contributions,
  • Accounting documents,
  • A notice to the debtor of the in-kind contribution of the receivable,
  • Minutes of the general meeting of the partners or a decision of the sole owner for increasing the capital,
  • A declaration as to the truth of the circumstances declared for entry and of the documents submitted,
  • A power of attorney (if submitted by an authorised representative),
  • A payment order for the State fee paid.

Depending on the particular case, other documents may also be required, for example:

  • Certificates of current status,
  • Minutes of general meetings or decisions of the competent bodies in respect of partners that are legal entities, and others.

Special cases
If the in-kind contribution of the receivable is made upon the incorporation of the EOOD or OOD, all documents necessary for the initial registration of the company are also attached to the application.

In cases where the contributor of the receivable becomes a new partner in the company, the relevant procedure for admitting a new partner must be followed.

Should you need legal advice or assistance in connection with in-kind (non-cash) contributions to the capital of commercial companies, contact us on telephone 0887550706, e-mail: [email protected]