22 June 2020

Do I pay up my cash contribution in full when incorporating a private limited company or not?

If you wish to incorporate a private limited company, you should bear in mind that all contributions from the moment of incorporation should be paid up in full, unless you stipulate otherwise in the deed of incorporation. As recompense for the contribution you are making, you are allotted shares.

Your cash contribution should be deposited in a special account in the name of the company in the process of incorporation, held with a financial institution. As proof of the payment made into this account a bank certificate is issued; you should hand this certificate to the notary when the private limited company is incorporated, together with the financial plan.

As founder you can also decide only to transfer part of your cash contribution to the special bank account. If the company needs additional funds at a later date, the management body can ask you to pay up your contribution in full.

But did you know that it is also possible for you to be bound in the deed of incorporation to make a certain contribution, which incidentally has to be invested in full and unconditionally, but for you NOT to have to pay ANYTHING yet at the time of incorporation?

By opting for this procedure, you avoid the bank certificate.

Kristof van der goten

Legal

Do you have any further questions about this? Then be sure to contact our advisors! Let's talk!

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