Meaning
Non-cash contributions allow investors to acquire shares by transferring tangible or intangible assets to a company. In civil law jurisdictions, a sacheinlage involves a formal valuation of the property to ensure it matches the nominal value of the stock issued. This method is common during the formation of industrial startups.
Valuation Report
Independent auditors must certify the worth of the machinery and patents being contributed. The sacheinlage process protects existing shareholders from the dilution of their holdings by preventing the overvaluation of the incoming asset. This report is a mandatory filing with the commercial register.
Capital Maintenance
Rules governing the preservation of the company’s base assets apply to non-cash items just as they do to cash. If the value of the sacheinlage drops significantly before the registration is complete, the investor may be required to pay the difference in cash. This ensures the firm starts with the resources it claims to have.
Notarial Procedure
Formal transfer of ownership happens in the presence of a notary to verify the legality of the transaction. Because a sacheinlage is a complex legal act, the documentation must be perfect to avoid a rejection by the court. This step provides the final seal of approval for the capital increase.
