The authorized capital is a documented amount of funds contributed by the founders when creating their organization. It forms the minimum amount of assets of a legal entity that it needs to carry out its activities. This capital also guarantees the interests of investors and creditors of the organization.
Contributions of property to the authorized capital are made by the founders of limited liability companies and joint stock companies. Moreover, such a contribution can be paid with both tangible and intangible assets.
Features of the deposit
Contributions to the authorized capital with property are made both in the process of creating an organization and when increasing its assets. At the same time, the founders have the right to pay for their share of participation with their money, property, securities, as well as other rights that have a monetary value.
The legislation provides that such contributions do not participate in the formation of the base for income tax, as well as value added tax.
When forming the authorized capital, accounting provides for different procedures for recording such property. The easiest way is to pay for your share of participation in cash. When depositing tangible or intangible assets (non-monetary assets), a certain procedure is followed.
Contributions to the authorized capital with real estate, securities or other valuables are carried out according to a certain scheme. At the first stage, the founder must confirm his rights. He must be the owner of the assets that he is going to transfer to the authorized capital. Next, the transfer of valuables is documented by signing a special acceptance certificate. You should also decide whether you need to seek the help of a third-party appraiser.
What is a contribution to the authorized capital of a transaction?
A contribution to the authorized capital is a replenishment of the company’s fixed capital using available cash or property funds. Types of such replenishment include:
- cash or non-cash money transfer;
- use of securities;
- use of property rights (intangible capital);
- adding real things to the company's balance sheet, i.e. property.
Since the presence of authorized capital gives the right to carry out economic and commercial activities, this issue is regulated by law.
Until recently, replenishment of a company’s capital could be carried out in any of the above types, i.e. practically did not require the deposit of real money. But under such conditions, many controversial and problematic situations arose, so changes were made to the regulatory documents.
Currently, a contribution to the authorized capital with property is possible only if there is a minimum amount of real money in the capital. Different forms of ownership have different thresholds:
- for a limited liability company 10,000 rubles;
- for a public joint stock company 100,000 rubles;
- for a non-public joint stock company 10,000 rubles.
This is exactly the amount that must be contributed to the authorized capital in cash. If you need to increase this amount, you can use all other methods of replenishment, including replenishment with property. This need may arise in several cases:
- at the time of foundation of the company to increase the available budget;
- for the development of the company at the time of its activity;
- if there is a debt on the contribution to the authorized capital to repay it.
In fact, the founder (everyone, if there are several of them) has the opportunity to register his property on the company’s balance sheet at any time. To do this, you need to prepare certain documents and go through the following steps:
- determination of the list of property transferred to the authorized capital;
- property valuation with the help of an independent appraiser (previously such an assessment was not always necessary, only for fairly expensive property, but nowadays even the smallest funds must be appraised);
- the appraiser draws up a report indicating the final value of the property;
- a general meeting of all company owners or shareholders is held, at which the appraiser’s act must be approved, and this decision must be documented;
- The owners of the property must then draw up a transfer and acceptance certificate and finally register it on the company’s balance sheet.
In this process, the cost of a contribution to the authorized capital is the most controversial issue: often the owners do not agree with the expert’s assessment, but legally they still do not have the right to assign a higher value. In addition, the slightest errors in the wording of documents can lead to refusal of replenishment or other problems. And the cost of the assessment and the expert’s work is often higher than the final cost of the transferred property.
There is also a common problem: often the owners and the company agree on a valuation that is beneficial to the owners. Therefore, changes must be made to the legislation that impose on the appraiser exactly the same responsibility for fraud with the value of property as on the owner.
Property valuation
Using a certain technology, a contribution to the authorized capital is made with property. The assessment of non-monetary values is carried out by an external specialist. This approach is established by law. The assessment (except for cash) is carried out by an expert in any case, regardless of the size of the contribution. Previously, the law was in force that if the share of the participant’s contribution to the authorized capital is less than 20 thousand rubles, the owner can determine the value independently. However, since 2014 this law has been repealed.
If the organization resorts to the help of an independent appraiser, this specialist and the participant who transfers non-monetary property bear financial liability for 3 years (from the date of registration of the organization). Moreover, it exceeds the value of the deposit. This is necessary so that the independent appraiser does not overestimate the value of the participant’s property. If the company subsequently incurs debts to creditors due to an incorrect procedure for depositing valuables, both the organization itself and the involved expert will be liable for such obligations.
The deposit is accepted at the residual value. The authorized capital with property (VAT in this case is not deducted) is replenished in accordance with the tax accounting of the participant. This takes into account additional costs associated with the transfer of property or rights. They are defined as part of the contribution to the authorized capital.
How to withdraw property from an organization
Such manipulations with property included in the capital may be necessary to protect against seizure or claims by government agencies. This is most often done by organizations with large debts. In practice, several methods are used to withdraw funds from the authorized capital. First, the capital must be reduced through the above manipulations, and then the freed funds must be transferred from liabilities to assets. You can operate with assets quite freely.
- Implement. Another legal entity is organized, and a purchase and sale or exchange agreement is concluded with it. The right to property passes to the new owner.
- Withdraw during any gratuitous transactions. This should be done jointly by employees of the accounting and legal departments. After all, all transactions must be justified. If the organization does not have its own lawyer, in such a situation it is advisable to invite a consultant.
- Create controlled debt secured by valuable assets. And then go to court for recovery.
- Transfer property to the authorized capital of another company. The whole point is that the sellers themselves organize this company. After the transaction, in such cases, a procedure is carried out to increase the authorized capital.
- Reorganize the company by dividing it into many smaller ones. Then the property is transferred to new companies, and the old company, from a legal point of view, ceases to exist. But it is worth considering that debts do not disappear anywhere. New owners receive them along with their assets.
- Participate in exchange trading. But at the same time, you need to agree in advance with a trusted person who will purchase the entire package of securities and contracts.
- Issue bills. This route is sometimes taken by prospective bankrupts. This allows debt securities to be devalued and property to be transferred to third parties.
Of course, most of these methods for withdrawing authorized capital can be considered dubious. But the question of business survival sometimes forces them to resort to them. It is possible to carry out such a procedure and not fall under any article only with the help of a very experienced lawyer.
If an LLC is liquidated, its participants can legally receive part of the authorized capital. But funds can be withdrawn for them only after debts to all creditors are paid. First, the profit is paid, and then you need to withdraw the capital to each of the participants in proportion, in accordance with the originally invested share. This procedure is carried out using bank payment orders or by paying at the LLC cash desk.
A special commission manages the liquidation process. She must give 2 months to creditors so that they can make claims. Only after all debts have been paid can the capital be withdrawn for the participants. But the commission can extend the 2-month period indefinitely; there are no established limits in the law. Therefore, participants can receive their shares of capital in a few years.
Sources:
Civil Code of the Russian Federation. Article 90. Criminal Code of LLC
Civil Code of the Russian Federation. Article 99. Criminal Code of JSC
Civil Code of the Russian Federation. Article 101. Reduction of the authorized capital of a joint-stock company
VAT deduction
As mentioned above, property tax is not deducted when shares are contributed by company participants. Contribution to the authorized capital is not subject to VAT. However, in some cases it may be subtracted from the amount of deposited values. For example, if such property is subsequently used by the organization in activities that are subject to VAT by law. It is restored by the transferring party, but only if these amounts are highlighted in the documentation.
In this case, there is no need to issue an invoice. Only the organization's purchase book records the relevant transfer documents. Copies of these must also be kept in the journal of invoices received. The tax amount is deducted after the values are accepted onto the organization’s balance sheet.
If the restored tax was not actually paid by a participant in the organization, the company has no right to pay this amount. This is established by law and is suppressed in court. VAT amounts are accepted for deduction only if the persons who made the contribution previously lawfully accepted them for recovery.
Individuals do not have the right to recover VAT when depositing tangible and intangible assets. They are not initially payers of such tax. Even if this amount is highlighted in the documents when transferring property, the company does not have the right to take them into account.
VAT
The operation of transferring property to the authorized capital is not recognized as a sale (subclause 4, clause 3, article 39 of the Tax Code of the Russian Federation). Consequently, it is not subject to VAT taxation (subclause 1, clause 1, article 146 of the Tax Code of the Russian Federation).
A participant who transfers property as a contribution to the authorized capital must restore the VAT on it, previously accepted for deduction (in relation to fixed assets and intangible assets in an amount proportional to the residual value without taking into account revaluation). This is provided for in paragraph 3 of Art. 170 Tax Code of the Russian Federation.
The recipient has the right to accept the restoration of the VAT participant as a deduction if he plans to use the received property in operations subject to VAT (clause 11 of Article 171 of the Tax Code of the Russian Federation). If the condition for the participant to restore the tax amounts is not met, VAT cannot be deducted (letter of the Ministry of Finance of Russia dated May 14, 2015 No. 03-03-06/1/27742).
So, in order to deduct VAT, the recipient company must have confirmation that the participant has recovered the tax, as well as data on the amount of this tax. From the provisions of clause 14 of the Rules for maintaining a purchase book, approved by Decree of the Government of the Russian Federation dated December 26, 2011 No. 1137, and the letter of the Federal Tax Service of Russia dated December 6, 2013 No. GD-4-3 / [email protected] it follows that such confirmation will be documents on the transfer of property to the authorized capital, which indicate the amount of tax recovered by the participant. The recipient registers these documents in the purchase book.
Payment instructions
If a participant wishes to make a minimum contribution to the authorized capital of the company, he can only do so in cash. This law has been in force since 2014 in the Russian Federation. An additional contribution to the authorized capital with property can only be made if the participant has previously contributed a sum of money in the amount of 10 thousand rubles. At the same time, it is not necessary to pay your share of participation in intangible assets. Only a cash contribution will be enough.
If the founders have decided to contribute some share to the authorized capital with property, they must adhere to certain instructions. At the first stage, the participants unanimously approve the monetary value of the values that are transferred to the fund of their organization.
After this, an independent expert evaluates such property. After an external specialist has carried out his work, the participants of the company must sign a report. It is compiled based on the results of the assessment.
Data on the value of the share contributed in this way are also reflected in the relevant documentation. If there is only one founder, this information is indicated in the decision. An agreement and protocol are drawn up for two or more participants.
Next, the company is registered. After signing the relevant documents, all participants must transfer a specified amount of valuables to the fund of their organization. In this case, an act is drawn up in the prescribed form. It is prohibited by law to contribute to the authorized capital property that is pledged, or borrowed funds from creditors, insurance companies, etc.
Accounting entries
The contribution to the authorized capital of property is reflected in accounting in a certain way. Postings for both money and other valuables use account 75 and the subaccount “Settlements with founders”.
The entries in this case correspond to the debt of the participants in the debit of subaccount 75. Until the company participant has repaid them, they are listed here. When the required share is contributed to the authorized capital, this amount will be reflected on the loan as a repaid debt of the debtor. It will be equal to the documented residual value of the deposits.
If the company has limited liability, its fund must be paid at least half upon creation. If the participants develop a debt to pay the established share, it is reflected in accounting by posting to account 75 (Debit) and account 80 (Credit). Data on amounts are taken from the relevant signed documentation. The amount of account 80 corresponds to the amount of capital established for contribution, which is fixed when the organization is created.
In this case, when paying the established share in money, the transaction will be simple. It is reflected in account 50 (Debit) and account 75 (Credit). However, the procedure for accounting for non-monetary values that the founder transfers to the organization is more complicated.
Accounting for transferred property
It is somewhat more difficult to reflect the contribution to the authorized capital with property in accounting. Postings in this case will be carried out in accordance with the “Fixed Asset Accounting” standard.
In this case, at the first stage, the compliance of the transferred values with the established characteristics of fixed assets is checked. After this, the transferred property is placed on the balance sheet. Regardless of its type, values in fixed assets are entered at their original cost. In this case, the source of its receipt is taken into account.
The initial cost is formed based on the results of an independent expert assessment. It corresponds to their monetary price, which was approved by all participants in the organization. This also includes expenses that arise during the registration of rights, delivery and commissioning of this property.
To summarize the results of accounting for the costs of accepting fixed assets that the participant transfers to the organization, the account “Investments in non-current assets” (account 08) is used in accounting. Therefore, account 75 will subsequently correspond with it. Postings are not made directly to the “Fixed Assets” account (account 01).
Example of accounting entries
The founder's contribution to the authorized capital with property must be correctly reflected in the accounting records. To avoid mistakes, you should consider the entire procedure using a specific example. For example, Konstruktor LLC registered its authorized capital in the amount of 300 thousand rubles. The first founder paid for his share by contributing a car to the general fund. An expert assessment carried out before the transfer of this property established that the market value of the car is 50 thousand rubles.
After signing the relevant documentation (the list was presented above), the accountant must correctly display this operation. The company displays information using the previously presented transactions. In this case, the accountant makes the following entries.
Debit 75 Credit 80. In this case, the amount is 300 thousand rubles. is reflected in accounting as registered capital and at the same time the debt of the organization’s participants.
Next, the accountant must reflect the transfer of the car by the first participant to the authorized capital. The amount is 50 thousand rubles. To do this, he records the posting: Debit 08 Credit 75.
After this, the property as a contribution to the authorized capital (50 thousand rubles) should be displayed as part of fixed assets. The posting is made: Debit 01 Credit 08.
The presented actions are carried out on the basis of documents for the transfer of material assets.
Initial OS cost
When forming the initial cost, take into account the monetary value of the fixed asset, agreed upon by the founders (participants, shareholders) (clause 9 of PBU 6/01). This indicator should not exceed the market value of the property, determined by an independent appraiser:
- in joint stock companies;
- in an LLC, if the participant’s share in the authorized capital, which is paid for with fixed assets, exceeds 20,000 rubles.
This procedure follows from the provisions of paragraph 3 of Article 34 of the Law of December 26, 1995 No. 208-FZ and paragraph 2 of Article 15 of the Law of February 8, 1998 No. 14-FZ. In these cases, an independent assessment of property contributions to the authorized capital is mandatory.
In addition, in the initial cost of a fixed asset, include the organization’s associated costs associated with obtaining property and bringing it to a state suitable for use (for example, costs of delivery, installation, appraiser services, etc.) (clauses 8 and 12 of PBU 6/01). A detailed list of such expenses is given in the table.
During the operation of a fixed asset, its initial cost does not change. The exceptions are cases of completion (retrofitting), reconstruction, modernization, partial liquidation and revaluation of fixed assets. This procedure follows from paragraph 14 of PBU 6/01.
The procedure for determining the initial cost of fixed assets contributed as a contribution to the authorized capital differs in accounting and tax accounting. As a result, a permanent difference may arise in accounting (clause 4 of PBU 18/02). For example, this will happen if the value of the fixed asset, according to an independent assessment, is less than the residual value of the object according to the tax accounting data of the transferring party (founder).
To receive incoming fixed assets, an organization should create a commission that should determine:
- whether the fixed asset meets the technical specifications and whether it can be put into operation;
- whether it is necessary to bring (rework) the fixed asset to a state suitable for use.
If the organization's staff consists only of a director, do not create a commission. In this case, its functions must be assumed by the director.
This procedure follows from the instructions approved by Resolution of the State Statistics Committee of Russia dated January 21, 2003 No. 7.
After examining the received property, the commission must give an opinion on the possibility of its use. This conclusion is reflected in the act in form No. OS-1.
Contribution to a joint stock company with property
Contribution to the authorized capital by property is not provided for by law for joint stock companies. However, there is no prohibition on carrying out such a procedure. Therefore, the features of this process should be considered. If the shareholder is a legal entity and he wishes to contribute non-monetary assets to the authorized capital, some discrepancy arises.
The legislation stipulates that the gift of material assets between commercial organizations cannot exist. This even applies to parent or subsidiary companies. However, formally the Tax Code allows for the gratuitous transfer of property. However, there is no specification for which organizations this is possible.
Therefore, in some cases, for joint-stock companies, the analogy of introducing tangible and intangible assets into the authorized capital is used. There are only some restrictions on donations.
Shareholders may be interested in increasing the authorized capital of their company. At the same time, they expect net profit growth and dividend payments. However, the transfer of property in this case is considered free of charge. Moreover, the cost of these values can also be excluded from the tax base. Such property should not be transferred to third parties during the year.
If the property received by the joint-stock company to form the authorized capital is leased, pledged or in another form, the tax benefit will not apply.
Authorized capital property
Advice from lawyers:
Please help me, I don’t know what documents are required for the tax authorities when adding property to the authorized capital.
4 answers
We created an LLC and decided to contribute the authorized capital with property. The statutory 10,000 was prescribed in the charter.
3 answers
If you contribute your share to the authorized capital with property, then it does not require valuation if this amount is less than 20,000 thousand rubles? In accordance with Article 15 of the Federal Law of the Russian Federation on LLC.
2 answers
Two individuals decided to create an LLC. It was decided to contribute property to the authorized capital,
2 answers
Is the consent of a spouse required when another spouse joins an LLC if the entry occurs by contributing to the authorized capital of the spouse’s property that was gifted to him?
2 answers
Dear lawyers. We are creating an LLC. One of the participants contributes property to the authorized capital.
2 answers
When creating an LLC, the founder was the only one who contributed property to the authorized capital (a laptop cost 18 tr.), is this not contrary to the law? If so, what is the law?
1 answer
Are the former/current founders and the former CEO personally liable?
1 answer
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1 answer
Please, could a state unitary enterprise (in the period from 2009 to 2014)
1 answer
We do this by increasing the authorized capital. The question is: is it possible to make a contribution to the authorized capital with property rather than money? And how.
1 answer
Please tell me, can an LLC be liable to debtors with its authorized capital? And is the authorized capital the property of an LLC?
1 answer
Please tell me, can an LLC be liable to debtors with its authorized capital? And is the authorized capital the property of an LLC?
1 answer
The LLC created a subsidiary and contributed 100% of the authorized capital with property, namely apartments that are still under construction under a share participation agreement in construction.
1 answer
Can the sole founder of an LLC pay for 100% of the authorized capital with property?
1 answer
When registering an LLC, all documents indicate that the authorized capital is contributed in money, is it now possible to contribute the authorized capital with property?
1 answer
Is it possible to contribute to the authorized capital the property transferred by the supplier free of charge...?
1 answer
An audit was carried out at the municipal unitary enterprise, which revealed that there were no funds in the amount of 10,000 rubles (authorized capital) in the municipal unitary enterprise's current account
1 answer
The sole founder of the LLC - a legal entity - wants to contribute property (an apartment) to the authorized capital.
1 answer
We have the following situation: The founder contributed to the authorized capital property that was leased to another company.
1 answer
The bank filed a lawsuit to collect the debt under the loan agreement. I am the gen.
1 answer
The amount of authorized capital is 10,000 rubles. When creating an LLC, the sole participant deposited 5,000 rubles into a temporary bank account.
1 answer
Formation of authorized capital - with property, what supporting documents for property must be provided?
1 answer
The enterprise was being liquidated, there was no activity, the balance sheet was zero for several years.
1 answer
How can you withdraw state property from the authorized capital? there is no registration, only changes have been made to the Unified State Register of Legal Entities to increase the authorized capital.
1 answer
How to admit a second founder to an LLC? How to increase the authorized capital of an LLC?
1 answer
Is it possible to remove a participant, change the gene. dir and increase the authorized capital (for example, property) and do it all in one action, i.e. stage. Thank you in advance.
1 answer
How to leave the founders if there are no documents on hand (other members of the company took it and are not making contact).
1 answer
Payment for a share of the right to use property
Contributions to the authorized capital of an LLC with property can be made in a slightly different form. It is not the material assets themselves that can be transferred, but only the right to use them. For an LLC, this option is possible. However, with this method of paying for shares, some difficulties are possible.
For example, a situation may occur when the right to use property ends earlier than agreed upon by the founders. In this case, the lease agreement expires. It is established by law that if such a situation arises, a participant who transfers the right to use property as payment for his share, at the request of the founders, is obliged to compensate for the loss in the form of depositing funds. The amount will be equal to the rental fee for movable or immovable property. Moreover, such transfer of funds is carried out under the same conditions that were initially established before the expiration of the previously established period of use. However, the contribution of property to the authorized capital is considered preferable.
Compensation is provided as a lump sum, but within a reasonable time frame. The repayment period is established from the day the founders present their claims. Participants may choose another method of providing compensation. This decision is documented in the minutes of the general meeting. In this case, the participant to whom the demands are made does not participate in the voting.
Proof of payment
The contribution of property to the authorized capital made by the founders must be documented. Such information is stored in the created organization.
However, each participant must also receive documents confirming his share in the general fund of the organization. They must be properly formatted. This is evidence of the contribution of property or the rights to use it by the participants of the organization.
First of all, the founder must receive an extract from the organization’s current account, as well as copies of payment documents, an act of acceptance and transfer of tangible or intangible assets. Also, each member of the company must be aware of the provisions of the charter. It indicates the fact of full payment of the authorized capital.
At the same time, the balance sheet should not contain information about incomplete payment of the authorized capital of the LLC. Also, proof that the participant has contributed his share is the receipt of a receipt for the cash receipt order.
Having considered what a property contribution to the authorized capital is, as well as the procedure for making it, you can understand the mechanism for carrying out such an operation for various organizations.
Why is it so difficult to withdraw authorized capital?
The underlying property of the organization has a guarantee function, ensuring the receipt of loans. Therefore, the founders cannot withdraw the authorized capital in an arbitrary manner. After all, these funds are confirmation of solvency and credit reliability.
Therefore, before withdrawing the authorized capital, you need to formalize its reduction. This procedure is different for each form of ownership.
An LLC can reduce its authorized capital:
- an equivalent reduction in the share of each participant;
- liquidation or redemption of some of the shares of the management company.
JSCs carry out reductions in the following ways:
- reduce the price of shares;
- remove part of the securities included in the authorized capital from market circulation, if the company’s charter allows this.
The procedure for reducing the capital capital is prescribed step-by-step by law, and you cannot change it at your own discretion.
- The meeting of shareholders or founders makes a decision to reduce the authorized capital.
- The management of the organization not later than 3 days later informs the tax authorities that such an official decision has been made.
- LLC or JSC develops new constituent documents within the same period, taking into account the adopted changes.
- All creditors are warned that the authorized capital is being reduced.
- Changes are registered in the Unified State Register of legal entities, after which the organization must obtain a certificate from the register.
Only after completing these five steps does the charter capital begin to be considered officially reduced, and the authorized capital can be legally withdrawn by transferring from the company account to the personal accounts of the founders, shareholders, creditors or other recipients.
