Head of real estate and commercial law practice
Specialist in the field of commercial law and process. Real estate, construction support; land law and protection of property ownership.
Contribution of real estate to the authorized capital
The contribution of real estate to a company’s authorized capital involves the transfer of ownership rights to buildings, structures, or land plots from an individual to an existing company in exchange for a share in the business. This issue is directly regulated by the Civil Code of Ukraine, as well as a number of other special laws that establish the foundations for organizing the activities of companies of various legal forms. Instead of ownership rights to real estate, as a result of such an exchange, a person acquires corporate rights, namely the right to dividends, voting rights, and a share in the company’s property (in particular, in the event of liquidation). We will examine this issue in more detail in this article.
Real Estate as a Contribution to Authorized Capital: What Should Be Considered?
The process of increasing authorized capital through property follows a clearly defined sequence that cannot be violated: from the adoption of a preliminary decision by the management body to the actual transfer of property under an acceptance deed. Such changes also require the entry of new information into two state registers — the register of legal entities and the register of real property rights. All transactions related to the transfer of property may be signed by the company’s director. At the same time, if for additional assurance the founders wish to limit the director’s authority in this matter, the charter may stipulate that the director may sign transactions of any value provided that they do not exceed 50% of the company’s assets. It should also be emphasized that a significant part of the entire process must be supervised by a notary, since the logical completion of the procedure will ultimately take place through them.
How Does the Contribution of Real Estate to Authorized Capital Take Place?
This process is carried out in stages and requires strict compliance with the following steps:
- first, preparation of the founders’ protocol/decision. The document specifies a detailed description of the real estate, its monetary valuation, the timeframe for actual transfer, as well as changes in the percentage shares of the company’s participants;
- second, execution of the real estate acceptance and transfer deed and its notarization. The deed is the primary title document in this procedure. Even if the founder and the director are the same person, the deed is signed by them as an individual and on behalf of the company as its head. This document must also be executed on notarial forms with certification of the authenticity of the participants’ signatures;
- third, legal formalization. This stage can be conditionally divided into three parts — registration of ownership rights to the property by the new owner, approval of a new version of the charter and ownership structure, and submission of an application to a notary to enter changes into the Unified State Register.
Important to Know! Before starting the process of contributing real estate to authorized capital, it is crucial to ensure the legal clarity of the property. For this purpose, it will be necessary to review the technical passport, certificates confirming the absence of encumbrances, and other relevant documents. To learn more, order a consultation with our real estate attorney.
What Documents Are Required to Contribute Real Estate to Authorized Capital?
The main list of documents includes the following:
- documents confirming ownership rights (contract, certificate, extract from the State Register of Property Rights);
- documents containing a description of the real estate (technical passport, extract from the State Land Cadastre);
- acceptance and transfer deed (notarized);
- decision of the general meeting or the sole founder of the company;
- documents from third parties, in particular the consent of the second spouse to conclude the transaction (if required).
Real Estate Lawyer Support: How Can It Help?
Real estate transactions are often accompanied by a number of legal risks, especially when property is contributed to authorized capital. The cost of a mistake in such cases is extremely high; therefore, to protect yourself from undesirable consequences, we recommend using the support of a real estate lawyer. Below are the key areas where a specialist’s assistance will be particularly important for clients:
- comprehensive due diligence of the property (including checks for encumbrances and arrests);
- analysis and drafting of real estate acquisition agreements (if required);
- support in decision-making and development of a “roadmap” for contributing real estate to the company’s authorized capital;
- work with documents for the lawful transfer of real estate;
- organization of negotiations and meetings with a notary to carry out the relevant registration actions;
- appeal against unlawful actions of state registrars (if required).
Thus, the contribution of buildings, structures, or land plots to a company’s authorized capital in exchange for corporate rights is possible provided that the established procedure is strictly followed. First, an appropriate decision is adopted, a notarized acceptance and transfer deed is executed, and only after that are changes made to the state registers. It should be emphasized that before starting the process, it is critically important to conduct a legal audit of the property and verify the correctness of document preparation. The experience and qualifications of a real estate lawyer will help guide the entire process — from the initial stage to its logical completion.
To receive a consultation and find out the cost of legal assistance regarding the contribution of real estate to authorized capital, please fill out the form below.
Calculate the cost of services
1 question
Is the real estate that is planned to be contributed to the authorized capital privately owned without encumbrances and arrests?
2 question
Does the company need to change the charter or the structure of the participants' shares in connection with the transfer of property?
3 question
Do you need full support of the transaction with a notary and state registers?
In which regions of Ukraine do you work?
The department of real estate and land law, as a rule, works in Kyiv and the Kyiv region.
- We provide our services in all regions of the Kyiv region, for example:
- Bilotserkiv district (towns of Skvira, Tarasha, Bila Tserkva, Uzyn, Tetiiv).
- Boryspil district (the cities of Boryspil, Pereyaslav, Yagotyn).
- Brovary district (the cities of Brovary, Berezan).
- Buchansky district (towns of Bucha, Irpin, Vyshneve).
- Vyshhorod district (the cities of Vyshhorod, Slavutych).
- Obukhiv district (towns of Obukhiv, Boguslav,
- Vasylkiv, Kagarlyk, Myronivka, Rzhyshchiv, Ukrainka).
- Fastiv district (the cities of Fastiv, Boyarka).
It is worth noting that on some issues (services) we work throughout Ukraine, contact and clarify information by phone!
Do you provide consultations online or over the phone?
Yes! If you do not have the opportunity to come to the office in Kyiv, then you can pay and receive a consultation by phone or in one of the applications for conducting calls/conferences.
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