{"id":2126,"date":"2017-01-27T14:12:27","date_gmt":"2017-01-27T14:12:27","guid":{"rendered":"https:\/\/vila.es\/en\/?p=2126"},"modified":"2020-12-01T11:15:49","modified_gmt":"2020-12-01T11:15:49","slug":"share-capital-increase-non-cash-contribution-clearly-defined","status":"publish","type":"post","link":"https:\/\/vila.es\/en\/corporate\/share-capital-increase-non-cash-contribution-clearly-defined\/","title":{"rendered":"A SHARE CAPITAL INCREASE THROUGH A NON-CASH CONTRIBUTION SHOULD BE CLEARLY DEFINED"},"content":{"rendered":"<p style=\"text-align: justify;\">Through a resolution dated 3<sup>rd<\/sup> January \u00a02017, the Directorate General for Registers and Notaries (DGRN) has made a statement on the condition of non-cash assets as a contribution to the share capital increase of a limited liability company.<\/p>\n<p style=\"text-align: justify;\">The limited liability company agreed to the capital increase through a contribution of assets which was part of a business unit, without providing any additional information other than the aggregate value thereof. The assets intended for the capital increase were made up of pre-formed companies (companies for subsequent transmission to third parties).<\/p>\n<p style=\"text-align: justify;\">The Commercial Registry of Valencia argued that said contribution fell short of an absolute indetermination, since pre-formed companies cannot be used for legal transactions; however, they are subjects of law and what the company alleged to be a business unit (consisting of the stocks of said companies) was not as such because a business unit is a set of elements that can operate autonomously.<\/p>\n<p style=\"text-align: justify;\">The DGRN resolution starts with a reminder that the notarial document executing the decision regarding the share capital increase must describe the non-cash contributions with their registration data (if they exist), the value in Euro and the numeration of the \u00a0allotted shares or participations, although in case of limited liability companies is not necessary to submit an assessment report of said assets Likewise, art. 190.1 of the Commercial Registry Regulations establishes a requirement to describe the assets or rights subject of the contribution in the public deed. On the other hand, the identification of non-cash contributions must be made for each of the assets provided, and not as a whole, with the exception of assets belonging to the same class or genre as \u201ca whole, forming a group or set\u201d or the contribution of \u201ca company or trading or industrial establishment\u201d. The reason for identifying each of the assets lies in building a link of responsibility between the contributor and the asset or right contributed, both regarding property titles and their financial valuation.<\/p>\n<p style=\"text-align: justify;\">In this case, the intention was to contribute a set of companies created under the aim of transferring them in the future, in \u201cstock\u201d form. Based on the nature of the contribution, the opinion of the Commercial Registrar is confirmed, underlining that <u>companies are subjects of law, and cannot be the subject of the contribution to another company. In the event that the participations of each of said companies had been contributed, the result would have been different<\/u>; and likewise, if the operation had involved the transfer of a perfectly identified branch of activity, an operation which is legally possible, as established by the DGRN through a resolution dated 2<sup>nd<\/sup> July 2016.<\/p>\n<p style=\"text-align: justify;\">In closing, the DGRN suggests that if the aim of the share capital increase was the\u00a0 contribution of a business unit formed by a company, the activity of which is the creation and the subsequent transfer of pre-formed companies \u2013 with details regarding the tax and corporate name identification of each of them \u2013 the object of the contribution was not determined properly, inasmuch as the public deed of share capital increase was limited to referring to a set of goods forming a single business unit, without any clarification other than that of the aggregate value of said contribution.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify;\">Eduardo Vil\u00e1<\/p>\n<p style=\"text-align: justify;\">Vil\u00e1 Abogados<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify;\">For more information, please contact:<\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"mailto:va@vila.es\">va@vila.es<\/a><\/span><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify;\">27<sup>th\u00a0<\/sup>of January 2017<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Through a resolution dated 3rd January \u00a02017, the Directorate General for Registers and Notaries (DGRN) has made a statement on the condition of non-cash assets as a contribution to the share capital increase of a limited liability company. The limited liability company agreed to the capital increase through a contribution of assets which was part  [&#8230;]<\/p>\n","protected":false},"author":4,"featured_media":4734,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[73],"tags":[],"class_list":["post-2126","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>A SHARE CAPITAL INCREASE THROUGH A NON-CASH CONTRIBUTION SHOULD BE CLEARLY DEFINED<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/vila.es\/en\/corporate\/share-capital-increase-non-cash-contribution-clearly-defined\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A SHARE CAPITAL INCREASE THROUGH A NON-CASH CONTRIBUTION SHOULD BE CLEARLY DEFINED\" \/>\n<meta property=\"og:description\" content=\"Through a resolution dated 3rd January \u00a02017, the Directorate General for Registers and Notaries (DGRN) has made a statement on the condition of non-cash assets as a contribution to the share capital increase of a limited liability company. 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