Valuation of contributions in kind in an S.A. (LGS art. 53)
Article 53 of the General Companies Law requires that, in companies limited by shares, valuation of contributions in kind be approved by the supervisory authority, based on market value or expert appraisal.
What article 53
Article 53 governs valuation of contributions in kind in companies limited by shares and the related state supervision.
In companies limited by shares, the valuation, which must be approved by the supervisory authority, shall be made: 1) at market value, for assets having a current market value; 2) by expert appraisal, where in the authority's opinion such appraisal cannot be replaced by reports from government agencies or official banks. Contributions at a value below the appraisal are permitted, but where the value attributed to the contribution exceeds the appraisal, the difference must be paid in.
Source: Law 19,550, art. 53 - InfoLEG (updated official text)
Commentary
For an S.A. the scrutiny is stricter: the supervisory authority (IGJ/CNV, as applicable) approves valuations of contributions in kind in order to protect the reality of stated capital for third parties and investors. A contribution may be booked below the appraised value, but not above the approved value without paying in the difference.
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