Ask a tax advisor on the topic of Balance sheet

Contribution in kind for small GmbH

February 1, 2010 | 20,00 EUR | answered by Matthias Wander

Hello,

I am the sole shareholder and managing director of a small GmbH founded in 2009.

The share capital of €27,500 has been fully paid in.

The GmbH is a tenant in a building that I own. In the rented floor, a photo laboratory was set up before the company was founded, using private funds without an invoice. According to the building application and assessment by the architect and planner, this laboratory has a value of €20,000 with special installations.

Since paying rent for this to me personally would be unfavorable for my personal situation, I would like to contribute the laboratory to the company without receiving any consideration. This way, I have at least improved the balance sheet values of the company.

I was then informed by a friend who is an entrepreneur that this is not possible because there are no invoices and the valuation and confirmation of proper installation by an architect would not be sufficient, and an evaluation by a specialist would be uneconomical.

My question now is:

Would the valuation and confirmation of proper installation by two separate architects/planners suffice as an evaluation, or do I need a new specialized appraisal?

Do I need to simultaneously increase the share capital at the commercial register (what needs to be submitted there) and could, and on what grounds, the commercial register or another authority reject the contribution in kind?

Matthias Wander

Dear questioner,

Thank you for your inquiry, which I would like to answer based on the information provided in an initial consultation.

In the balance sheet of the GmbH, the assets to be shown are those in which the GmbH has legal or at least economic ownership. Since the premises are rented, they are not to be included in the GmbH's balance sheet. This also includes the laboratory.

The contribution of the laboratory would result in the legal ownership transferring to the GmbH. Furthermore, the entire property (in the event of a declaration of division, the entire sub-object) would need to be transferred to the GmbH, resulting in you losing legal ownership of the property.

It is not possible to include the laboratory in the GmbH's balance sheet without simultaneously transferring legal ownership to the GmbH.

Regardless of whether the GmbH pays you rent for the use of the premises or not, there is a case of operational separation here. As a result, you would generate commercial income from the rental. Furthermore, the rented part of the building and the corresponding land, as well as possibly the GmbH shares, need to be activated in the balance sheet of the owning company.

I hope this gives you an initial overview.

Kind regards,

Wander
Tax consultant