Corporate Law & Business Law
Cash contribution
A cash contribution finances the company in exchange for equity. Understand its difference with a loan and prepare the necessary acts.
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Corporate Law & Business Law
Contribution in kind
A contribution in kind involves a property other than a sum of money: equipment, real estate, or intangible rights, for example. It requires identifying the property transferred to the company and establishing its value according to the rules corresponding to the corporate form.
The analysis must focus on ownership, third-party rights, and the possibility of effectively transferring the property. A list of equipment is not enough to prove that software, a trademark, or a contract is freely transferable. Also, examine the fiscal and accounting treatment of the operation, without assuming that a contribution is always neutral because no price is paid in cash.
During a constitution, the description of the contribution must allow the precise identification of the concerned property. For a vehicle, the identification number will be more useful than a general mention of equipment; for an intangible right, it is necessary to identify the right actually held by the contributor.
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