Appraisal of property contribution
The subject of a property contribution may be either tangible or intangible assets which are estimated in monetary value and which can be used in the company’s business activities, except for assets which are exempt from enforcement under the law. Property contributions may not be made in instalments.
The following assets may not be the subject of property contributions:
- obligations to provide service or perform a certain work;
- expected profit or expected participation in a company;
- expected salary, royalties, dividends and similar payments received by the founder or a member from the company.
The following persons are entitled to carry out the appraisal of property contribution and draw up an appraisal report:
- An appraiser of property contribution included in the list of the appraisers of property contribution kept by the Enterprise Register (ER). The appraiser may not be: a first- to third-degree relative, a spouse and an in-law of first- to second-degree affinity of the owner of property to be apprised and any person otherwise interested in the appraisal of property:
- Upon the establishment of AS (stock company), SIA (limited liability company or LLC) or a cooperative society. Exception – if the equity of SIA (LLC) is below EUR 5700 and the total amount of property contributions is less than a half of the equity, the founders themselves are entitled to carry out the appraisal.
- Upon the increase of the equity of AS (stock company) or SIA (LLC). Exception – if the property contribution to a capital company of a public person does not exceed EUR 14 000, the holder of capital shares is entitled to draw up the appraisal report.
- If SIA (LLC) is the acquiring company in the reorganisation process, and the equity of the SIA (LLC) is increased or the SIA (LLC) is established as a new company as a result of the reorganisation, assets of each company being acquired or the relevant part of assets of the company being divided have to be evaluated in order to determine whether they are sufficient to increase the equity of the acquiring company or to establish the acquiring company. Exception - if the decision or the contract of reorganisation has been audited by an auditor, the auditor is entitled to assess the adequacy of assets.
- The founders of AS (stock company) and SIA (LLC) if the equity is paid-up by transferable securities and money market instruments listed on a regulated market registered (licensed) in a Member State of the European Union (EU) or the European Economic Area (EEA) for at least two years before the signature of the memorandum of association or the date of decision on the increase of the equity. In this case, please provide information used as the basis for the appraisal of the property contribution.
The appraisal report must contain the following information:
- Description of each item of the property contribution;
- Value of each item of the property contribution;
- Ownership of the property;
- Valuation method of each contribution (may not be provided if the appraisal is performed by the founders);
- Opinion on the compliance of the item of the property contribution with the types of commercial activities of the company;
- Information used as the basis for the appraisal of the property contribution if the equity is paid-up by transferable securities and money market instruments listed on a regulated market registered (licensed) in an EU/EEA Member State, and the appraisal report is drawn by the founders.
If the appraisal report is drawn by the founder, it must be signed by all founders
Sample Appraisal Report
A Property Appraisal Report is valid for six months from the date of drawing up of the report. A Property Appraisal Report must be valid also on the day of the signing the memorandum of association or taking the decision on the increase of the equity.