Rules for making a contribution in kind to a capital company – formal requirements and valuation

At the same time, making a contribution in kind involves a number of legal requirements, which vary depending on the form of the company — the procedure differs in a limited liability company (sp. z o.o.), in a public limited company (S.A.), and yet again in a simple joint-stock company (P.S.A.). An incorrect contribution in kind may result in the shareholder being held liable to the company, and may even jeopardise the validity of the acquisition of shares.

In this article, we explain what may constitute a contribution in kind, what the formal requirements are for making such a contribution in different types of capital companies, and what to pay particular attention to in order for the entire process to proceed correctly.

What is a contribution in kind and what can it consist of?

Contributions to a capital company are divided dichotomously into monetary and non-monetary (in-kind) contributions. As M. Tofel emphasises, the legislator has contrasted a non-cash contribution with a cash contribution — there is no third category (M. Tofel, in: J. Bieniak et al., Commercial Companies Code. Commentary, 10th ed., 2026, Art. 14). A monetary contribution consists of Polish or foreign currency. Everything else — goods, property rights, other benefits — constitutes a non-monetary contribution.

Importantly, if cash forms part of a larger whole contributed to the company (e.g. an enterprise or an organised part thereof), the entire contribution is non-monetary in nature — even though it also includes cash. Similarly, a promissory note is not treated as a cash contribution, as it does not constitute a surrogate for money (see the Supreme Court resolution of 20 May 1992, III CZP 52/92, LEX No. 5364).

Contributory capacity

Not every asset can constitute a contribution in kind. Legal doctrine has developed the concept of so-called ‘contributory capacity’, i.e. a set of characteristics that a given asset must possess in order to be effectively contributed to a company as a non-monetary contribution. As A. Opalski points out, an asset is eligible for contribution if it meets all of the following conditions (A. Opalski, in: A. Opalski (ed.), Commercial Companies Code. Volume IA. Commentary, 1st ed., 2024, Art. 14):

• it is transferable — it may be transferred to the company (which excludes strictly personal rights);
• it represents a pecuniary value — it can be valued in monetary terms;
• it may be recognised in the company’s balance sheet as an asset — it forms part of the company’s assets;
• it is capable of satisfying the claims of the company’s creditors — it serves to protect the share capital.

The most common items of non-monetary contributions are: immovable property, movable property (machinery, vehicles, equipment), a business or an organised part thereof (ZCP), shares in other companies, intellectual property rights (patents, trade marks, copyright, know-how), receivables, rights to internet domains or licences.

Statutory exclusions

Pursuant to Article 14(1) of the Commercial Companies Code, the subject of a non-monetary contribution to a limited liability company, a public limited company or a public limited company (P.S.A.) intended for share capital may not be an inalienable right or the provision of labour or services. As M. Tofel points out, this prohibition serves to protect the company’s creditors — the share capital should be covered by assets from which creditors can effectively satisfy their claims (M. Tofel, in: J. Bieniak et al., Commentary on the Commercial Companies Code, 10th ed., 2026, Art. 14). In practice, this means that:

• shares cannot be covered by an obligation to perform work for the company;
• rights that are not transferable (e.g. personal servitude, life annuity rights) cannot be contributed;
• a mere ‘business idea’ without a formalised monetary value cannot be contributed.

It is worth noting that R. Pabis points out the inadmissibility of so-called ‘hidden contributions’ — a situation in which the company agrees that, instead of cash, a shareholder may make a non-monetary contribution without an appropriate amendment to the articles of association. Such a circumvention of the contribution requirements is unacceptable (R. Pabis, in: J. Bieniak et al., Commentary on the Commercial Companies Code, 10th ed., 2026, Art. 158).

Contributions in kind in a limited liability company

In a limited liability company, the rules governing the making of contributions in kind are primarily regulated by Articles 158 and 175 of the Commercial Companies Code. As emphasised by A. Opalski and A. W. Wiśniewski, Article 158 is commonly regarded as a provision ‘on contributions in kind’, although in reality it regulates two separate issues: the requirements for a valid agreement to cover a contribution in kind and the protection of the share capital against the payment of remuneration for services rendered upon the company’s formation (A. Opalski, A. W. Wiśniewski, in: A. Opalski (ed.), Commentary on the Commercial Companies Code, Vol. IIA, 1st ed., 2018, Art. 158).

If shares are to be subscribed for with non-cash contributions, the articles of association must specify in detail: the subject matter of the contribution, the shareholder making the contribution, and the number and nominal value of the shares subscribed for in exchange (Article 158 § 1 of the Commercial Companies Code). As Z. Jara points out, the purpose of this provision is to protect the interests of the company and its creditors and to ensure that the contribution to the company is genuine and has real value (Z. Jara, in: Z. Jara (ed.), Commentary on the Commercial Companies Code, 30th ed., 2025, Art. 158). R. Pabis adds that it is not permissible for any of the shareholders to be exempted from the obligation to make contributions (R. Pabis, in: J. Bieniak et al., Commentary on the Commercial Companies Code, 10th ed., 2026, Art. 158).

Non-monetary contributions must be made in full prior to submitting the application for registration of the company in the National Court Register (Article 163(2) of the Commercial Companies Code). From that moment, the subject of the contribution remains at the sole disposal of the company’s management board (Article 158(3) of the Commercial Companies Code).

It should be noted that in the case of a company whose articles of association were drawn up using a standard form (S24 system), only cash contributions may be made to cover the share capital (Article 158(1)¹ of the Commercial Companies Code). A contribution in kind becomes permissible only upon a subsequent increase in the share capital effected by way of a notarial deed (Article 158 § 1² of the Commercial Companies Code).

In a limited liability company (sp. z o.o.), there is no statutory obligation for the valuation of a contribution in kind to be verified by a certified auditor. The shareholders carry out the valuation themselves, which gives them greater flexibility but also greater responsibility.

Article 175 of the Commercial Companies Code provides that if the value of a non-cash contribution has been significantly overstated in relation to its market value on the date of the company’s incorporation, the shareholder making such a contribution and the members of the management board who, knowing of the overstated valuation, registered the company, are jointly and severally liable to compensate the company for the shortfall in value.

Irrespective of liability for overvaluation, Article 14(2) of the Commercial Companies Code introduces liability for compensation for defects in the contribution. If the non-cash contribution made has defects, the shareholder is obliged to compensate the company for the difference between the value accepted in the agreement and the market value of the contribution. The articles of association may also provide for other rights of the company in such a situation.

Contributions in a public limited company

In a joint-stock company, the requirements regarding non-cash contributions are significantly more restrictive. A. W. Wiśniewski describes the formation of a joint-stock company involving contributions in kind as ‘qualified formation’ — a specific procedure in which assets other than cash are contributed to the company, which requires additional control mechanisms (A. W. Wiśniewski, in: A. Opalski (ed.), Commentary on the Commercial Companies Code, vol. IIIA, 1st ed., 2016, Art. 311).

Where non-monetary contributions are envisaged, the founders of a joint-stock company are required to draw up a written report which should set out, in particular: the nature of the contributions, the persons making them, the number and type of shares subscribed for and — most importantly — the method used to value the contributions. As R. Pabis emphasises, this obligation covers three categories of contributions: contributions in kind proper, assets acquired prior to the company’s registration, and services provided upon its formation (R. Pabis, in: Z. Jara (ed.), Commentary on the Commercial Companies Code, 30th ed., 2025, Art. 311). The report must also justify the intended transactions, including the amount of remuneration granted. If the subject of the contribution is an enterprise, the report must be accompanied by financial statements for the last two financial years (Article 311 § 3 of the Commercial Companies Code).

This is the most significant difference compared to a limited liability company. Non-cash contributions made to a joint-stock company are subject to a mandatory audit by a certified auditor appointed by the registry court. The auditor examines whether the value of the contribution corresponds to at least the nominal value of the shares subscribed for in exchange for it. The auditor’s report constitutes a mandatory annex to the application for registration of the company or for a capital increase.

Shares subscribed for in return for non-cash contributions must be paid up in full no later than one year after the company’s registration (Article 309 § 3 of the Commercial Companies Code).

Contributions in a simple joint-stock company

The simple joint-stock company, introduced into the Polish legal system in 2021, represents a breakthrough in the approach to contributions. As L. Modzelewska and K. Reszczyk-Król point out, a broad interpretation of the capacity to make non-cash contributions was previously characteristic only of partnerships. It is now one of the key distinctions between a simple joint-stock company and other capital companies (L. Modzelewska, K. Reszczyk-Król, in: Z. Jara (ed.), Commentary on the Commercial Companies Code, 30th ed., 2025, Art. 300²).

Pursuant to Article 300²(2) of the Commercial Companies Code, a non-monetary contribution towards the subscription of shares in a P.S.A. may be any contribution having pecuniary value, in particular the provision of labour or services. This is a fundamental difference compared to limited liability companies (sp. z o.o.) and joint-stock companies (S.A.). The legislator justified this by the need to take into account the specific nature of start-up companies, in which the unique skills and work of founders are combined with capital provided by financial investors (explanatory memorandum to the draft Act of 19 July 2019).

In a P.S.A., non-monetary contributions should be divided into two categories: (1) contributions intended for share capital — these must meet the traditional criteria for contribution eligibility under Article 14 § 1 of the Commercial Companies Code (transferability, valuability, balance-sheet eligibility) and (2) contributions not intended for share capital (including labour and services) — these are not subject to the restrictions on the eligibility of contributions in kind. As A. Opalski notes, this arrangement means that a P.S.A. combines the characteristics of capital companies (protection of share capital) with the flexibility of partnerships (the possibility of contributing labour) (A. Opalski, Commentary on the Commercial Companies Code, Vol. IA, 2024, Art. 14).

In a P.S.A., there is no statutory requirement for the valuation of a contribution in kind to be verified by a certified auditor, which simplifies and speeds up the process.

Summary

Making a contribution in kind to a capital company is a transaction which, when carried out correctly, allows the company to be effectively equipped with the necessary assets. It is crucial to comply with the formal requirements specific to the type of company in question, to ensure a reliable valuation, and to be aware of the tax consequences.

In a limited liability company (sp. z o.o.), the procedure is relatively simple — there is no obligation for an audit by a certified auditor, but Article 175 of the Commercial Companies Code imposes severe consequences for an inflated valuation. In a public limited company, the requirements are higher, with a mandatory founders’ report and an audit by a certified auditor. A simple public limited company offers the greatest flexibility, even allowing contributions in the form of labour or services — which makes it an attractive form for start-ups and technology companies.

HWW Hewelt Wojnowski Lindner i Wspólnicy Sp.k. has extensive experience in handling non-cash contributions, establishing capital companies and providing corporate advisory services. If you are planning to make a contribution in kind to a company or require assistance with the valuation and formalities associated with a non-cash contribution, please do not hesitate to contact our specialists