Transferring Real Estate to a Commercial Company via Non-Cash Contribution
Contributing real estate to a commercial company as a non-cash contribution, also known as “aport,” is a common method for increasing a company’s capital. This process involves transferring ownership of the property to the company, where it becomes part of the company’s assets. Below, we outline the key steps, legal considerations, and benefits of aport contributions in Bulgaria.
What is an Aport Contribution?
An aport is a type of non-cash contribution where a partner contributes real estate, intellectual property, or other assets to a company in exchange for equity. In the context of real estate, this means transferring ownership of the property to the company, which is then used as part of its operating assets.
Why Choose an Aport Contribution?
- Increase Capital: Aport contributions allow partners to boost the company’s capital without using cash.
- Optimize Resources: Real estate contributed as an aport can serve operational or investment purposes for the company.
- Tax Efficiency: In some cases, aport contributions may offer tax advantages compared to direct sales or other methods of transferring property.
Steps for Transferring Real Estate via Aport
- Decision by the General Assembly
The process begins with a resolution by the company’s General Assembly. The decision must outline:
- The property being contributed.
- The value of the contribution (as determined by an expert evaluation).
- The resulting change in equity and ownership percentages.
- Expert Valuation
Under Bulgarian law, aport contributions require an independent evaluation to determine the market value of the property. This ensures transparency and fairness for all shareholders.
- Amend the Articles of Association
The Articles of Association must be updated to reflect the increased capital and the new ownership structure resulting from the aport contribution.
- Drafting the Aport Agreement
The aport agreement is a legally binding document that specifies:
- Details of the property.
- The valuation.
- The terms and conditions of the transfer.
- Notarization
The transfer of real estate ownership must be completed via a notarized deed. This step requires:
- Presentation of the company’s resolution and Articles of Association.
- The expert valuation report.
- Proof of property ownership.
- Registration in the Commercial Register
The aport contribution and changes to the company’s capital must be registered in the Commercial Register. Documentation required includes:
- The updated Articles of Association.
- The notarized deed of transfer.
- The expert valuation report.
Legal Considerations
- Clear Ownership: The contributor must prove ownership of the property, free from encumbrances or legal disputes.
- Independent Valuation: Bulgarian law mandates an independent valuation to prevent overvaluation or undervaluation.
- Registration Requirements: The transfer must be registered both in the Commercial Register and the Property Register.
- Tax Obligations: Certain taxes, such as local property taxes or notary fees, may apply during the transfer process.
Benefits of Real Estate Aport Contributions
- Strengthen Company Assets: The contributed property becomes part of the company’s capital, improving its financial standing.
- Flexible Financing: Partners can increase the company’s capital without liquid cash.
- Business Growth: The property can be used for operational needs, development, or as collateral for future investments.
Common Challenges
- Disputed Ownership: Any unresolved claims on the property can delay the process.
- Valuation Disputes: Disagreements over the market value may require additional assessments.
- Regulatory Compliance: Failure to follow legal procedures can result in invalidation of the aport contribution.
Why Choose Legal Frame?
At Legal Frame, we provide end-to-end support for aport contributions, ensuring a smooth and legally compliant process. Our services include:
- Drafting resolutions and agreements.
- Coordinating expert property evaluations.
- Preparing and filing registration documents.
- Advising on tax and regulatory implications.
Contact Legal Frame Today
Ready to transfer real estate to your company? With our expertise, you can confidently navigate the process and secure your company’s financial future. Contact Legal Frame for professional assistance tailored to your needs.
