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Authorized Capital Contributions

When registering a newly created company, or reorganizing an existing one, the size of the authorized capital in many cases requires that a portion of the authorized capital consists of non-monetary kinds of contributions. In other words, when contributing a non-monetary portion to the authorized capital, the founding shareholder is transferring property instead of a specific sum of money.

A contribution to the authorized capital in the form of property is a fairly widespread phenomenon in contemporary practices.

Forms of contributions to the authorized capital can include all kinds of equipment, pieces of real estate, intellectual property and the like. In similar situations, an intelligent appraisal of the contribution to the authorized capital will guarantee that all kinds of conflicts between the participating parties will not arise. It is entirely logical to assume that a founding shareholder will want to transfer his property into the company's authorized capital at the highest possible price, while the other founding shareholders and the company itself are interested in the lowest possible price for that very same property. Therefore, in order to avoid an obvious conflict, one can go the route of obtaining an independent appraisal of the property.

It is necessary to understand that the quality of an appraisal is a decisive factor in determining a company’s financial attractiveness as an investment, not only from the stand point of its clients, but also from the stand point of its partners and potential investors.

A TurkmenExpert Company appraisal of the value of property being contributed to a company's authorized capital is a trustworthy assurance to the Ministry of Economics and Development of Turkmenistan – the body that develops procedures for registering and reregistering legal entities.

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