License as contribution in kind for the conversion of UG to GmbH
October 1, 2012 | 30,00 EUR | answered by Dr. Yanqiong Bolik
FACTS:
I recently founded an UG (limited liability company) with a share capital of 1 Euro. I have now learned that, according to a decision of the Federal Court of Justice, it is possible to increase the company's capital to the required 25,000 Euros for a GmbH (limited liability company) through a contribution in kind. The company's business activities involve the development and distribution of software.
INTENTION:
I have developed a game which I would like to transfer to the UG. The game is currently selling steadily and well, generating revenues of 15,000 Euros over a period of 9 months. The future forecast seems promising. Currently, it is still generating a monthly revenue of 1,000 Euros.
QUESTION:
Can I transfer the rights to the game to the UG (as a contribution in kind from a shareholder), and set a value of 25,000 Euros (since the game will continue to generate income - potential forecast), in order to facilitate the transformation of the UG into a GmbH? If the value of the game does not reach this threshold, there are also licenses for various development software, as well as hardware worth approximately 5,000 Euros.
Furthermore: Who has to determine this value? I would even set the value much higher, as a community has formed around the game, which serves as the target market for future developments. In my opinion, the value would be more like 40,000 Euros.
Thank you very much!
Best regards,
Mario Gaida
Dear inquirer,
Thank you for your inquiry, which I am happy to answer taking into consideration your input and the rules of this platform.
Please note that my response is based on the facts presented, and that adding, omitting, changing information, or the ambiguity of information may change the tax result.
The prohibition of contributions in kind in the initial capital stock serves to simplify the process of founding a UG. Whether contributions in kind are also excluded in the case of an increase in the share capital of a entrepreneurial company reaching the amount of the minimum share capital of a regular GmbH of 25,000 euros (§ 5 para. 1 GmbHG) under § 5a para. 2 sentence 2 GmbHG is a matter of dispute in case law and doctrine. The Federal Court of Justice, in its decision of 19.04.2011 (II-ZB-25/10), interpreting the legal norm according to its meaning and purpose, came to the conclusion that a capital increase with contributions in kind is also possible for the entrepreneurial company, even if the minimum share capital of a regular GmbH has not yet been reached. With its fundamental decision, the Federal Court of Justice clarified that contributions in kind are possible in a capital increase that reaches the minimum share capital of the GmbH.
Basically, intangible assets (including rights, etc.) are also eligible for contributions in kind. Please note that ownership of the rights must be transferred to the corporation. Mere granting of use does not constitute a contribution in kind.
The subject of the contribution in kind and the amount of the share to which the contribution in kind relates must be determined. The contributions in kind should be appropriate in value.
It is not legally required who can determine the value. In this respect, you can also assess it yourself. However, competent registry courts / tax offices regularly require a certificate of the value of the contribution in kind (certificate of value), which can be prepared by experts.
A capital increase through contributions in kind could have various tax effects, also with regard to future business activities. Therefore, it is advisable to have the process accompanied by professionals to avoid unwanted disadvantages.
I hope I was able to assist you.
If there is still any uncertainty, please feel free to use the follow-up function.
Best regards,
Dr. Yanqiong Bolik
Tax advisor
Bildstöckle 6, 70567 Stuttgart
Tel: +49 (0)711 / 2132 1815
Email: info@zdbz.de
www.steuerberatung.zdbz.de
