Companies that are capital companies have a statutory obligation to form registered capital.
A non-monetary contribution to the registered capital may be any asset whose economic value can be determined. This includes, for example, real estate, a trademark or cryptocurrencies. Cryptocurrency can also be used to increase the registered capital of an already existing company.
If the members, or the sole member of the company, decide to increase the company's registered capital by means of cryptocurrency, the procedure is the same as for an increase of the registered capital by any other non-monetary contribution. An increase of the registered capital requires a decision of the company's general meeting in the form of a resolution, or a decision of the sole member on the increase of the registered capital.
A member who intends to use their cryptocurrencies to increase the registered capital must express their will by means of a declaration assuming the obligation to make a new contribution to the company. The cryptocurrencies by which the registered capital is to be increased must first be valued by an expert from the relevant field, in order to determine their value by way of an expert opinion.
In order for the increase of the registered capital to take place, the cryptocurrencies must come into the ownership of the company. At the same time, the managing director is obliged to make a declaration on the payment of the new contributions to the company and on the amount by which the company's registered capital is being increased.
One must not forget the managing director's obligation to draw up a written report in accordance with Section 59b(4) of the Commercial Code. In addition, the declaration that no circumstances have arisen that would significantly change the value of the non-monetary contribution as expressed in the expert opinion must not be overlooked.
In this situation, however, it is worth reflecting on the nature of cryptocurrency, whose fundamental characteristic is the volatility determined by the cryptocurrency market.
What happens if the value of the cryptocurrency that was a non-monetary contribution to the company's registered capital changes?
The situation outlined above is best illustrated with a practical example.
A member makes a non-monetary contribution to the company in cryptocurrencies whose value was determined, on the basis of an expert opinion, at EUR 10,000.00. The cryptocurrency, specifically Bitcoin (BTC), was used to increase the company's registered capital to EUR 15,000.00. After the increase of the registered capital was recorded in the relevant Commercial Register, however, the value of BTC rose to EUR 20,000.00. As a result of the increase in the value of BTC, though, the member of the company is not obliged to file a further petition to increase the registered capital. The volatility of cryptocurrencies is, in fact, not taken into account when increasing the registered capital.
Given the volatile nature of cryptocurrencies, it would be illogical and even inconceivable for every increase or decrease in the value of the relevant cryptocurrency to require a change in the recorded amount of the company's registered capital. It is therefore clear that the legislature did not take into account in the Commercial Code, and at the time the relevant provisions of the Commercial Code were adopted could not have taken into account, the possibility of contributing cryptocurrency as a non-monetary contribution, with all the consequences that this entails.
Any increase or decrease in the value of the cryptocurrency used to increase the company's registered capital may possibly be reflected in determining the amount of the liquidation balance upon liquidation of the company.
When increasing the registered capital by a non-monetary contribution consisting of cryptocurrency, we therefore recommend that you turn to an attorney with experience in corporate law, who will guide you through the entire process of increasing the registered capital.
You can find the complete article at pravnenoviny.sk: https://bit.ly/36TjSRR