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Contributions in Kind in Limited Liability and Joint Stock Companies: Current Limits

by Pietro Acerbi | Apr 27, 2022 | Blog

Contributions in kind  

“Contributions in kind” are all those contributions of goods or services which, by nature, are different from money. As a matter of fact, they are all those economically assessable goods, whose conferment is not excluded by the chosen company type: in fact, in joint-stock companies, contributions of works or services are not allowed, whereas they are possible in limited liability companies. In fact, contributions in kind of real estate, credits, registered trademarks and even receivables are generally widespread in practice; the conferral of cryptocurrencies remains doubtful, and we will return to this subject in another publication. 

For the purposes of their validity, specific rules are laid down by the Civil Code, both regarding the transfer of such assets or rights to the company, and to safeguarding the actual value of the contribution itself.  

It is also provided that the shares or quotas (depending on the type of company) referred to in contributions in kind must be fully paid up at the time of their subscription.  

The same rationale regarding contributions in kind at the time of incorporation is followed, insofar as applicable, also in cases of capital increases against payment.  




The new features of online company formation and video-conference meetings  

The EU Directive 2019/1151, on the possibility of fully online incorporation of companies, has been transposed into our legal system as of last December 14, 2021: it is therefore now possible, through a special platform of the Italian notaries at the instigationinitiative of the chosen notary public, to establish limited liability companies (whatever their size or characteristic).  


The online incorporation procedure certainly represents a significant innovation, both in terms of time and cost reduction (for example, in the case of entities which intervene from abroad, it is no longer necessary to have the power of attorney of a foreign notary, subsequently legalized): however, this procedure provides that the contributions to be made at the time of incorporation must be made only in money, by means of bank transfer to the escrow account of the notary; in this way, therefore, it is not possible for the shareholders to make contributions in kind.  


Similarly, our legislator decided to intervene also with regard aboutto meetings by videoconference – which have already been adequately described here – by providing for the possibility to hold them entirely by means of this system. However, in the light of the rationale of the current legislation, it is not possible to hold a meeting by videoconference concerning a paid capital increase with a simultaneous contribution in kind: this is because, in any case, the latter is a separate negotiation act that cannot be validly “incorporated” in the resolution that is exclusively carried out by electronic means.  



In the light of what has been briefly examined, the legislator has introduced significant innovations, both in terms of facilitating shareholder participation and reducing time and costs. All this, obviously, with enormous benefits for shareholders and company directors, albeit within certain limits.  


In this context, as regards both the online constitution of limited liability companies and the holding of meetings exclusively by videoconference, the simultaneous making of contributions in kind does not seem possible. These are, in fact, contributions which, by their nature, entail a negotiated relationship whose implementation cannot take place by means of a mere telematic procedure (videoconference).  


In the wake of the innovations just introduced, it is hoped that in the future the legislator will be able to make changes to make contributions in kind easier to make, in line with the changes, without prejudice to the principle of safeguarding the effectiveness of capital.  


Videoconference meetings: are they always possible?



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