The joint stock company has a high degree of formalization compared to at least the company z o.o. An example is the process of verifying the non-monetary assets which the court brought about.
This process involves, among other things, the preparation of a written report by the founders and the examination of such report by the statutory auditor. In this article, we will present the procedure related to this obligation.
When should a report be drawn up?
Article 311(1) KSH provides for a report to be drawn up for third the categories of benefits. This Article concerns the provision of non-monetary (ports) paid by shareholders to cover the shares covered. This provision details the elements of such a report.
Article 312 KSH refers to the examination of the report by one or several auditors, for the purpose of issuing an opinion on the fair value of non-monetary contributions and whether it corresponds at least to the nominal value of the shares covered.
In turn Article 312 1 KSH specifies a few exceptions when the statutory auditor is not required to report.
Provisions Article 311 – Article 312 1 KSH is dedicated only to the stage of the formation of the company, but is used accordingly to increase the share capital of the company (Article 431 KSH), or the division of the company (Article 538 1 KSH).
The formalised verification process for non-monetary assets transferred to a public limited liability company shall apply in any case to make such a contribution to the company. Although this is a burdensome obligation, it should be borne in mind that its aim is to ensure the safety of trade.
Who makes the report?
The report is the responsibility of the founders of the company and the establishment of the board of directors of the joint stock company in the organisation does not change that fact. The answer to this question becomes somewhat more complicated in the event of an increase in share capital. No rule explains this.
The founders of the company will not be suitable persons because they have no power to act either on behalf of the company or on behalf of the shareholder submitting the aport. After second may no longer be its shareholders, nor have any other relationship with it.
The representatives of the doctrine indicate that, in such a case, the report referred to in 311 section 1 KSH will be the appropriate board of directors. We have similar doubts about the separation procedure. The rules do not give us an answer again and we should refer to the interpretation of mutants.
In this case, appropriate use Article 311 KSH means the obligation to complete management reports with Article 536(1) KSH for a report presenting the assets of a shared company.
Audit audit
The statutory auditor shall be appointed by the registered court competent for the seat of the company. When appointing an expert, the court shall decide whether to appoint one, Or a few experts. A greater number of experts justify a large amount of work which excludes an opinion within a reasonable time by one person.
It has now become common practice to request the appointment of an auditor, indicating that appointment will be sufficient one the expert and the candidate. However, the court is not bound by such an indication.
The designated expert shall conduct a report study on the veracity and reliability. The purpose of the study is to give an opinion on the fair value of non-monetary contributions. The expert shall confirm whether it corresponds at least to the nominal value of the shares covered by those contributions.
Furthermore, the statutory auditor’s opinion should assess the method of valuation of non-monetary contributions adopted in the report. When examining the report, the expert does not rely solely on its content. He may request additional explanations or documents.
After an opinion has been drawn up, the auditor should submit it to the two copies together with the report to the registry court. Then the court leaves one a copy in the company's file, and second transfer to the company.
Before the date of registration of the company, reference should be made to the statutory auditor's submission of an opinion. The company is also obliged to be advertised in the Court and Economic Monitor and possibly in another letter for the company’s announcements.
Obligation to apply the rules to the division of a company
The provisions in question concerning the drawing up and examination of the report shall apply mutatis mutandis to the shared company’s assets transferred in connection with its division. As I pointed out at the beginning, in practice this means that it is mandatory to supplement the management reports with Article 536(1) a report showing the assets of the split company.
The situation may be different in the event of a division by setting up new companies.
The Commercial Companies Code then provides the possibility to fail to draw up the management reports specified in Article 536(1) and failure of the plan of division by the expert (provided that the plan of division provides that the shareholders of the split company shall retain the share held in the share capital of the divided company, in the share capital of all companies newly bound).
No less, the assets belonging to the plan of division of the acquiring company or the newly bound company, which is a public limited company, shall be subject to the provisions respectively. Article 311-312 1 KSH (obligation of the report and its examination by the expert).
The formal verification process of non-monetary assets transferred to a public limited liability company is therefore applicable in any event to make such a contribution to the company.