It’s not always the case that cash is king: what do you need to consider when forming a company through non-cash contributions?
A capital contribution is due when you form a GmbH or an AG (corporations) (see the articles on each legal form). However, you don’t necessarily have to contribute this capital in a currency such as Swiss francs: you can also make a non-cash contribution.
But be careful: if you now want to use your portfolio of shares or your stamp collection to form a company, you must have it audited by a registered auditing firm. Depending on the nature and complexity of the non-cash contribution, this audit may cost an additional CHF 400 to CHF 3,000.
What are the conditions for a non-cash contribution?
The following factors determine what you can and cannot contribute as a non-cash contribution.
The asset can be valued
You can only contribute assets that have concrete value and can be capitalised. An auditor must confirm the precise value of the contribution. Foundera is happy to organise this for you.
You must be able to transfer the asset that will be included in the company’s assets. This means that there must be no legal obstacles preventing this.
The non-cash contribution must be available immediately to the company after its entry in the commercial register.
The asset must be recoverable if the company is dissolved. This means that there must be at least a small market for the asset and it must be legally transferable.
Typical examples of non-cash contributions:
Certain non-cash contributions are relatively common and are therefore also associated with lower costs for the auditors. Common non-cash contributions include:
- Vehicles (delivery van, driving school car, lorry)
- Tools and machinery (furnaces, lathes, hammer drills)
- IT hardware (laptops, screens, printers, ...)
- Stocks of materials (raw materials, spare parts, ...)
- Software (purchased or developed in-house)
Advantages of formation with non-cash contributions:
- Free capital can be invested on a liquid basis
- If no cash capital at all is used for the share capital, there is no need for the bank to confirm the capital contribution.
- Vehicles can be contributed transparently to the company’s assets.
Drawbacks of formation with non-cash contributions
- Additional costs to pay auditor
- The non-cash contribution may unexpectedly lose value over the years
- The valuation of the non-cash contribution may vary (e.g. for software)
Do you have any further questions or would you like to form a GmbH or even an AG using a non-cash contribution? The initial consultation with Foundera is no obligation and free of charge: