How contributions in kind are valued (LGS art. 51)

Article 51 of the General Companies Law establishes how contributions in kind are valued: as provided in the company agreement, by market prices, or by experts appointed by the registration judge. In an SRL and for limited partners, the supporting basis for the valuation must be stated, and creditors may challenge it within five years in the event of insolvency or bankruptcy.

What article 51

Article 51 governs the valuation of non-cash contributions and creditor protection in relation to that valuation.

Source: Law 19,550, art. 51 - InfoLEG (updated official text)

Commentary

Contributions in kind—real estate, machinery, businesses, receivables—create a risk of overvaluation, which can artificially inflate stated capital to the detriment of third parties. The law therefore requires objective valuation criteria: the company agreement, market prices, or a court-supervised expert valuation.

In an SRL and for limited partners, valuation is particularly sensitive because their liability is limited: the supporting basis must be stated and creditors may challenge the valuation within five years if the company becomes insolvent, unless it was made judicially. A judicial valuation therefore shields the contribution from that specific challenge.

Distinctions often confused

Practical impact

When contributing assets, the valuation should be carefully documented and, for an SRL, a judicial expert valuation may be considered for greater certainty. Overvaluation may trigger member liability (art. 150 for an SRL).

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