Object and value of the contribution

When legal persons are formed and when their share capital is increased, it is often the case that the founder or the member makes a non-monetary contribution i.e. a contribution, of the assets placed at the disposal of the legal person. According to the provisions of Act V of 2013 on the Civil Code (“Civil Code”), either the ownership of an asset (e.g. real estate, motor vehicle, technical equipment, etc.) or a right of pecuniary value (e.g. usufruct, lease, right to use intellectual property, etc.) may be transferred to the company by way of a contribution. It is therefore important that the object of the contribution not only becomes the property of the company but also increases its share capital.
There is no uniform definition of the concept of rights of pecuniary value, but the generally accepted requirement in judicial practice that the object of the contribution must be transferable and have a pecuniary value is a point of reference. This ensures that the non-monetary contribution has real value, so that the capital does not become a ‘fictitious’ asset which cannot be effectively used by creditors.
In the case of a non-cash contribution, it is essential that its exact value be determined. This can be done by the members in the case of a company (with the provision that they are liable to the company for damages for any overvaluation if the value is deliberately set above the market price) or by an auditor or an expert with the necessary expertise to value the asset.  As a general rule, the value of the non-cash contribution should be fixed in the instrument of incorporation, with the provision that if it later transpires that the value of the contribution at the time of transfer is less than the value stated, the legal person may claim payment of the difference from the person who made the contribution. It is also important to note that the Civil Code contains different provisions for each form of legal person regarding the time limit for the provision of the service and the maximum proportion of the contribution in relation to the share capital.

Intellectual property as a non-monetary contribution
Intellectual property can also be brought into a business company as a non-monetary contribution, so its contribution can be an excellent way of utilizing such intellectual property, either at the time of the establishment of the business or later in its economic life. Intellectual property is classically divided into two broad categories: works of authorship (literary and artistic works, software, etc.) and works protected by industrial property law, such as inventions or trademarks.
Ownership of the intellectual property is transferred to the company at the time of the appropriation and the company can then dispose of the intellectual property. In this context, it is important to note that not only the ownership of the intellectual property, but also the right of use or utilization (licence) can serve as a non-monetary contribution, either at the establishment of the company or an increase in share capital. In the case of a transfer, for accounting purposes, the intellectual property provided (transferred) should be included in intangible assets (acquisition value) at the amount stated in the instrument of incorporation.

Trademark contribution, trust administration
According to Act XI of 1997 on the Protection of Trademarks and Geographical Indications (the “Trade Mark Act”), a trademark is a legal protection (trade mark protection) which identifies the origin of certain goods or services, which may be represented in an appropriate manner and which is capable of distinguishing the goods or services from those of others. Practice shows that businesses pay particular attention to the legal protection of their trademarks, given their prominent role in marketing and competition in the market. Since trademarks enable consumers to find their way around the market more easily, a well-constructed trademark can be of considerable value to a company through its promotional function as an indication of the quality of the goods/services.
Under the Trademark Act, the rights associated with a trademark and those arising from the application for, or protection of a trademark constitute a right of marketable pecuniary value and can be encumbered and enforced and therefore can also serve as a non-monetary contribution. In all cases, particular attention should be paid to the proper valuation of the trademark as a contribution, given its specific legal and tax implications.
When setting up a company, it is important to ensure that the trademark is registered in due time, since until the trademark is registered in favour of the company or individual wishing to make the contribution, the company that is to be established by the contribution cannot be registered. In the case of a registered trademark, care must be taken to ensure that, following the transfer of rights, the National Intellectual Property Office, as the competent authority, must be instructed to ensure that the change in the identity of the proprietor is duly recorded in the relevant trademark register, otherwise the transfer of rights cannot be properly effected.
A registered trademark may also be placed in trust, in which case the register of trademarks will state that it is part of the assets held in trust. In such a procedure, a request for acknowledgement of succession must be submitted to the authority, accompanied by a trust deed and, in the case of a non-business trust, a so-called filing certificate.

The content of this post does not constitute legal or tax advice and does not create an engagement. In each case, detailed knowledge of the individual case is necessary to assess it and to find a tailor-made solution. If you have any questions, please do not hesitate to contact us at

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