Legal advice

I would like to establish a limited liability company and pay-up the equity capital by property contribution. What kind of property can be contributed to the equity capital of LLC and how the valuation of material contribution shall be carried-out, as well as in what cases will I need the help of experts for valuating the material contribution?

18.03.2010 Aleksandr Lenkovskis, member of the board

Items of property contributions may be tangible or intangible property valued in terms of money, which may be utilised in the commercial activities of a company, except for property which in accordance with law may not be the subject of collection.  

The property contributions shall be valued according to the usual value of the relevant property. An opinion regarding the valuation of a property contribution shall include a description and value of each contribution item, indicate the ownership of the property, and the method used for the valuation of each contribution, and include an opinion regarding the conformity of the items of property contribution with the types of commercial activities of the company. If the valuation is made by the founders or shareholders, the valuation methods for property contributions need not be indicated.  

The persons, who performed the valuation, shall be solidarily liable for any losses, which have been incurred with an incorrect valuation of a property contribution. The valuation of property contributions and an opinion thereof shall be made by an expert who is included in the list approved by the Commercial Register Office. If, when founding a limited liability company, the total value of property contributions does not exceed 4000 lats, and the property contributions together are less than one-half of the equity capital of the company, the valuation of the property contributions and the submission of an opinion may be made by the founders.

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