The authorized capital is a documented amount of funds that the founders contribute when creating their organization. It forms the minimum number of assets of a legal entity that it needs to carry out its activities. Also, this capital guarantees the interests of investors and creditors of the organization.
Contribution of property to the authorized capital is made by the founders of limited liability companies and joint-stock companies. Moreover, such a contribution can be paid by both tangible and intangible assets.
Deposit Features
A contribution to the authorized capital by property is made, both in the process of creating an organization, and with an increase in its assets. In this case, the founders have the right to pay their share of participation with their money, property, securities, as well as other rights that have a monetary value.
The legislation provides that such contributions do not participate in the formation of the base for income tax, as well as value added.
When forming the authorized capital, accounting provides for different procedures for fixing such property. The easiest way is to pay your share in cash. When making tangible or intangible assets (non-monetary assets), a certain procedure is performed.
A contribution to the authorized capital by real estate, securities or other values is carried out according to a certain scheme. At the first stage, the founder must confirm his rights. He must be the owner of the values that he intends to transfer to the authorized capital. Further, the transfer of values is documented by signing a special act of acceptance and transfer. You should also decide on the need to seek the help of a third-party appraiser.
Property Valuation
According to a certain technology, a contribution is made to the authorized capital by property. Valuation of non-monetary values is carried out by an external specialist. This approach is established by law. Evaluation (except cash) is made by an expert in any case, regardless of the size of the contribution. Previously, the law was in force, if the share of the participant’s contribution to the authorized capital is less than 20 thousand rubles, the owner can independently determine the cost. However, since 2014 this law has been repealed.
If the organization seeks the help of an independent appraiser, this specialist and the participant who transfers the non-monetary property shall be liable for 3 years (from the date of registration of the organization). Moreover, it exceeds the size of the value of the deposit. This is necessary so that the independent appraiser does not overstate the value of the property of the participant. If subsequently the company incurs debts to creditors due to an incorrect procedure for depositing values, both the organization itself and the involved expert will be liable for such obligations.
At residual value, a deposit is accepted. The authorized capital by property (VAT in this case is not withdrawn) is replenished in accordance with the tax accounting of the participant. In this case, additional costs associated with the transfer of property or rights are taken into account. They are defined as part of the contribution to the share capital.
VAT deduction
As already mentioned above, when the shares are paid by participants in the company, property tax is not removed.Contribution to the authorized capital is not subject to VAT. However, in some cases, it may be subtracted from the amount of contributed values. For example, if such property is subsequently used by the organization in activities that are subject to VAT under the law. It is restored by the transmitting party, but only if these amounts are highlighted in the documentation.
In this case, an invoice is not required. Only in the organization’s purchase book are corresponding transfer documents recorded. Copies must also be kept in the journal of invoices received. The deduction of the tax amount is made after the adoption of the values on the balance sheet of the organization.
If the recovered tax was not actually paid by a member of the organization, the company has no right to pay this amount. This is established by law and is suppressed in court. The amount of VAT is deductible only if the persons who made the deposit previously legitimately accepted them for recovery.
Individuals are not entitled to restore VAT when making tangible and intangible assets. They are not initially payers of such a tax. Even if this amount will be allocated in the documents during the transfer of property, the company does not have the right to take them into account.
Payment instruction
If a participant wants to make a minimum contribution to the authorized capital of the company, he can do this only in cash. This law has been in force since 2014 in the Russian Federation. An additional contribution to the authorized capital by property may be made only if the participant has previously made a monetary amount of 10 thousand rubles. At the same time, paying your share of participation is not necessarily intangible assets. A cash contribution will be sufficient.
If the founders have decided to contribute a certain share of the charter capital with property, they must adhere to certain instructions. At the first stage, participants unanimously approve the monetary value of the values that are transferred to the fund of their organization.
After that, an independent expert evaluates such property. After carrying out their work by an outside specialist, the members of the company must sign the act. It is compiled based on the results of the assessment.
Data on the value of the share contributed in this way is also reflected in the relevant documentation. If the founder is one, this information is indicated in the decision. For two or more participants, an agreement and protocol are drawn up.
Next is the registration of the company. After signing the relevant documents, all participants must transfer to the foundation of their organization a set amount of values. In this case, an act is drawn up in the prescribed form. The legislation prohibits contributing to the authorized capital property that is pledged, or borrowed funds from creditors, insurance companies, etc.
Accounting entries
In a certain way, the contribution to the charter capital by property is reflected in accounting. Postings, both for money and other values, use account 75 and the sub-account “Settlements with founders”.
In this case, the entries correspond to the debts of the participants in the debit of subaccount 75. Until the company participant has paid them off, they are listed here. When the required share is paid into the authorized capital, this amount will be reflected on the loan as repaid debtor debt. It will be equal to the documented residual value of deposits.
If a company has limited liability, its foundation must be paid at least half when created. If the participants have a debt to pay the established share, it is reflected in accounting by posting to 75 account (Debit) and 80 account (Credit). Amount data is taken from the relevant signed documentation.The amount of 80 accounts corresponds to the amount set for the contribution of capital, which is fixed when the organization is created.
At the same time, when paying the set share with money, the posting will be simple. It is reflected in 50 accounts (Debit) and 75 accounts (Credit). However, the procedure for recording non-monetary values that the founder transfers to the organization is more complicated.
Accounting for the transferred property
It is somewhat more difficult to reflect in accounting the contribution to the authorized capital by property. Postings in this case will be performed in accordance with the standard "Asset Accounting".
At the same time, at the first stage, the compliance of the transferred values with the established characteristics of fixed assets is checked. After that, the transferred property is put on the balance sheet. Regardless of its type, values in fixed assets are entered at initial cost. In this case, the source of its receipt is taken into account.
The initial cost is formed on the basis of the results of an independent expert assessment. It corresponds to their cash price, which was approved by all participants in the organization. This also includes expenses that arise during registration of rights, delivery and commissioning of this property.
To summarize the results of cost accounting for the adoption of fixed assets that the participant transfers to the organization, the account “Investments in fixed assets” is used in accounting (account 08). Therefore, it is with him that account 75 will subsequently be corresponded. Postings are not made directly with the Fixed Assets account (invoice 01).
Accounting Posting Example
The contribution of the founder to the authorized capital by property should be correctly displayed in accounting. In order to avoid mistakes, you should consider the whole procedure with a specific example. For example, OOO Constructor registered its authorized capital in the amount of 300 thousand rubles. The first founder paid his share by contributing to the general fund of the car. An expert assessment carried out before the transfer of this property, established that the market value of the machine is 50 thousand rubles.
After signing the relevant documentation (the list was presented above), the accountant must correctly display this operation. The company displays information using the previously presented transactions. In this case, the accountant makes the following entries.
Debit 75 Credit 80. The amount of 300 thousand rubles. It is reflected in the account as registered capital and at the same time debts of the organization participants.
Next, the accountant must reflect the transfer of the car by the first participant to the authorized capital. The amount is 50 thousand rubles. To do this, he writes the posting: Debit 08 Credit 75.
After that, property as a contribution to the authorized capital (50 thousand rubles) should be displayed as part of fixed assets. Posting: Debit 01 Credit 08.
The presented actions are carried out on the basis of documents of transfer of material values.
Contribution to joint stock company property
Contribution to the authorized capital by property is not legally provided for joint-stock companies. However, there is no ban on the implementation of such a procedure. Therefore, you should consider the features of this process. If the shareholder is a legal entity, and he wants to contribute values in the form of non-monetary funds to the authorized capital, some discrepancy arises.
The legislation provides that the donation of material values between commercial organizations cannot exist. This applies even to parent or subsidiary companies. However, formally, the Tax Code allows the transfer of property free of charge. At the same time, there is no specification of for which organizations this is possible.
Therefore, in some cases, for joint stock companies, the analogy of introducing tangible and intangible assets into the authorized capital is used. There are only some restrictions on donation issues.
Shareholders may be interested in increasing the authorized capital of their company. At the same time, they expect growth in net profit and dividend payments. However, the transfer of property in this case is considered free of charge. Moreover, the value of these values can also be excluded from the tax base. Such property should not be transferred to third parties during the year.
If the property received by the joint-stock company for the formation of the authorized capital is leased, pledged, or in another form, the tax benefit will not apply.
Payment of a share of the right to use property
Contribution to the charter capital of LLC property can be carried out in a slightly different form. Not material values themselves can be transferred, but only the right to use them. For LLC this option is possible. However, with this method of payment for shares, some difficulties are possible.
For example, a situation may occur when the right to use property ends earlier than agreed by the founders. In this case, the lease term expires. It is legally established that in the event of such a situation, a participant who transfers the right to use the property as payment for his share, at the request of the founders, is obliged to compensate for the loss in the form of cash payments. The amount will be equal to the rent for the movable or immovable property. Moreover, such a transfer of funds is made on the same conditions that were established initially before the expiration of the period of use established earlier. However, the contribution of property to the authorized capital is considered preferable.
Compensation is provided at a time, but within a reasonable time. The repayment period is set from the day the founders present their claims. Participants may choose another way to provide compensation. This decision is documented in the minutes of the general meeting. At the same time, the participant to whom the demands are put forward does not participate in the voting.
Proof of payment
Contribution of property to the authorized capital, which is made by the founders, must be documented. Such information is stored in the created organization.
However, each participant must also receive documents confirming his share in the general fund of the organization. They must be properly designed. This is proof of the contribution of property or rights to use it by the participants of the organization.
First of all, the founder must receive an extract from the settlement account of the organization, as well as copies of payment documents, an act of acceptance-transfer of tangible or intangible assets. Also, each member of the company must own the provisions of the charter. It indicates the fact of full payment of the authorized capital.
Moreover, the balance sheet should not contain information about incomplete payment of the authorized capital of LLC. Also proof of a participant’s contribution is the receipt of a receipt for a cash receipt order.
Having considered what constitutes a contribution by property to the authorized capital, as well as the procedure for its contribution, we can understand the mechanism for conducting such an operation for various organizations.