What is a Contribution in Kind?
Contributions in kind can be used to contribute capital to a limited liability company (e.g., ApS or A/S), including, for example, when establishing a limited liability company or increasing the capital of a limited liability company. The legal definition of a contribution in kind is that “assets other than cash” are contributed. This means that, in principle, contributions in kind can be any type of asset that is not cash. Contributions in kind are regulated in sections 35-38 of the Danish Companies Act. This may include all assets that have economic value and may be tangible, intangible, or financial. As an appraisal report must be prepared by an appraiser (typically a registered or state-authorized public accountant), it will be up to the appraiser to assess the economic value of the individual asset.
Examples of assets that can potentially be used for a contribution in kind include real estate, equipment, tools, machinery, patents, trademarks, and many other types of assets.
When can a Contribution in Kind be Relevant?
A contribution in kind can be relevant in situations where you want to contribute certain assets to a company while also acquiring ownership in the company. When converting from a sole proprietorship to a private limited company (ApS), contributions in kind are usually used, as an ApS requires a minimum share capital of DKK 20,000 when converting to an private limited company (ApS) (and when establishing it in general). The same applies if you are about to convert your private limited company (ApS) into a public limited company (A/S), as a public limited company (A/S) requires a minimum share capital of DKK 400,000.
In addition, a contribution in kind may be optimal in the case of capital increases where a group needs to restructure assets or rights to another company in the group. A contribution in kind may also be optimal in situations where two limited liability companies choose to enter into a partnership and therefore merge the companies into a single entity by merging two companies (regardless of whether these are ApS or A/S). As a rule, a capital increase through a contribution in kind to a private limited company (ApS) or a public limited company (A/S) can be approved by 2/3 majority vote at the company’s general meeting. The same applies, among other things, to the conversion from a private limited company (ApS) to a public limited company (A/S).
What does the Process of Establishing a Contribution in Kind Involve?
The conditions for making a contribution in kind are that the assets must have an economic value and that the value must be assessed from a market perspective. This part is assessed by an appraiser, typically a certified public accountant or a state-authorized public accountant.
However, contributions in kind cannot consist of work or services, nor can they consist of claims on founders or shareholders.
In addition, the memorandum of association must state whether the company, in connection with its formation, may take over assets contributed in kind in accordance with the provision on the content of the memorandum of association in section 27(1)(3) of the Companies Act.
When assessing the value of the contribution in kind, a valuation report must be prepared and attached to the memorandum of association. The requirements for the content of the report are set out in section 36(1) of the Companies Act. The valuation must not have been made more than four weeks prior to the signing of the memorandum of association and must be prepared by one or more independent, expert valuers, who will normally be registered auditors.
It should be noted that if you choose to form a limited liability company (ApS) with all or part of the capital contributed in kind, the entire share capital and any share premium must be paid in full.
Contributions in kind can be a flexible solution when you want to add assets to a company without paying cash. The advantages include the possibility of using existing assets as capital, which can reduce the need for liquidity and make it easier to convert a business into a limited liability company. The disadvantages are primarily related to the complex process and the documentation requirements. An independent auditor must prepare a valuation report, which entails additional costs and time. In addition, contributions in kind entail a risk of disagreement about the valuation of the assets, and assets such as services or receivables cannot be used.
This article does not constitute and cannot replace legal advice. Raadgiver.dk ApS assumes no liability for any damage or loss, directly or indirectly, attributable to the use of the information provided in the article.
Published January 2026
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