In the Resolution of the DGRN of December 4, 2019, that governing body has ruled on a really interesting issue, namely, the possibility of contributing at the time of the constitution of an SL a “Know How” as a non-monetary contribution to disburse the share capital of the company.
The case is based on an assumption in which, at the time of the incorporation of a limited liability company (SL), the founding partners, among other assets, disbursed part of the share capital through a non-monetary contribution consisting of certain intangible knowledge linked to the business that the SL intended to carry out and conceptualized as "know how".
The Commercial Registrar who assessed that deed of incorporation, refused to register it on the grounds that he understood that this “know how” actually constituted “the contribution of work or services that cannot be the object of contribution (art. 58 Capital Companies Law)”.
In response to this classification, the contributing partners appealed to the DGRN, arguing that this knowledge did not constitute work but "know-how", that this knowledge was essential to carry out the corporate purpose and that it met the characteristics of being secret, identifiable and providing an economic benefit.
The resolution that puts an end to this controversy, issued by the DGRN, upholds the appeal and considers the "know how" as falling within the category of non-monetary contributions.
In this regard, the DGRN (Directorate General of Registries and Notaries) states the following: “According to Article 58.1 of the Capital Companies Law, ‘in capital companies, only assets or property rights susceptible to economic valuation may be contributed.’ And the contribution in question in the registration qualification, even though it is an intangible asset, has a patrimonial character, is susceptible to economic valuation and appropriation, and therefore can be contributed to the company and is capable of generating a profit. Furthermore, it is different from a mere obligation to perform, so the rule that prohibits the contribution of labor or services (Article 58.2 of the Capital Companies Law) is not infringed.”
The meaning of this resolution raises numerous legal questions and is quite surprising.
Besides raising doubts from the point of view of the guarantee that the company's share capital represents for creditors, and the contributions made by the partners in payment thereof, the most evident doubt is that which arises with respect to the secret and highly personal nature of that "know-how," since there is the possibility that those partners who contributed it may transfer their shares to third parties who are not aware of it, and that as a result of the departure of those partners from the company, that "know-how" which theoretically exists in the share capital may also leave.
Taking these considerations into account, it will be necessary to be attentive to see if the DGRN in subsequent resolutions endorses what was admitted in this Resolution, or if, in view of the doubts that have arisen regarding it, it decides to qualify and redirect the meaning of the resolution described here, introducing certain restrictions.
If you require our assistance to obtain more information or have any questions, please contact us via email at ambit@ambitassessor.com or at our offices.
Do you have any questions about this topic?
Our team of expert advisors will help you resolve any issues related to our services.
Contact us now
A graduate in Law from the University of Barcelona and with a Master's degree in Business Law from the same university, he worked at the law firm Alonso-Cuevillas Advocats and later joined the Civil and Commercial Litigation department of the law firm Bufete Bueno Bartrina. He then joined the team at the firm Casamitjana-Cuyas-Morales, and subsequently continued his career at Bufete Herrera Advocats, in the Commercial and Litigation department. In November 2015, he joined aÀmbitJurídic i Econòmic, SLP, as a professional partner, to head the Commercial and Insolvency practice.
Latest posts by Andreu Pujol i Camps
(see all)
Related
