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Aside from the traditional method for purchasing real estate, partnerships and companies (hereinafter collectively referred to as ‘companies’) can acquire real estate through it being contributed to the company by a partner or shareholder (hereinafter collectively ‘shareholder’) through the so-called in-kind (or ‘non-monetary’) contribution. How is such a process conducted, and are there any additional obligations associated with it as compared to the above-mentioned traditional method?

What is an in-kind contribution (‘aport’)?

A contribution is the ‘brick’ each shareholder brings into the company – and his fundamental obligation as a shareholder. In principle, a contribution takes the form of money. In exchange for contributing, the shareholder or shareholder receives a specified number of shares or stocks in the company. However, when formulating regulations concerning the organization and functioning of companies, the legislator has also allowed, in addition to the possibility of making a monetary contribution, the contribution of non-monetary assets.

One of the components of assets that can be contributed to the company as a non-monetary contribution is real estate. Notably, the subject of in-kind contribution does not have to be the ownership of real estate. It is possible to make an in-kind contribution to the company other property rights, such as perpetual usufruct of real estate or cooperative ownership rights to a premises. In addition to directly contributing real estate, partners can contribute it as part of a business or its organized part.

In the Civil Code, the legislator has included regulations allowing partners to make an in-kind contribution of their ownership, other rights, or services to a civil partnership. This is explicitly stipulated in Article 861 of the Civil Code. The same applies to commercial companies. Regarding corporations, such as limited liability companies, simple joint-stock companies, and joint-stock companies, Article 14 of the Commercial Companies Code imposes two restrictions regarding the subject that can be contributed as in-kind contributions. The non-monetary contribution to a limited liability company, joint-stock company, or the share capital of a simple joint-stock company cannot include non-transferable rights or the provision of labor or services.

Who becomes the owner of the real estate after it’s been contributed to a company?

Due to the specific characteristics of a civil partnership, which fundamentally differ in organization and operation from commercial companies, contributing real estate as a non-monetary contribution to a civil partnership may raise various concerns. According to the provisions of the Civil Code, such a partnership does not possess legal capacity and is inseparably linked to its founding partners. They are personally liable for all of the partnership’s obligations, and its assets are essentially the collective property of the partners.

In this context, transferring real estate ownership from a partner to a civil partnership may initially seem pointless. However, it is essential to note that the assets contributed by the partners to a civil partnership become their collective property. This means that it can be utilized to achieve a common economic goal. At the same time, individual partners cannot independently dispose of their share in the collective assets or the individual components of this property. Therefore, contributing real estate to a civil partnership – even though unconventional – is not without rationality.

Conversely, in the case of commercial companies, when real estate is contributed, it ceases to be the ownership of the partner(s) and becomes an asset of the company. In company companies, a shareholder receives an appropriate share in rights and obligations in exchange for the contributed real estate, whereas in capital companies, shares or stocks are allocated to them.

A special form of transferring ownership of real estate to the company

Suppose a shareholder has committed to contributing real estate. In that case, Article 158 of the Civil Code comes into play, which states that an agreement involving the transfer of ownership of real estate must be concluded in the form of a notarial deed. The same applies to an ownership transfer agreement made to fulfill an existing obligation to transfer ownership of real estate; this obligation should be mentioned in the deed. Contributing real estate to a company always requires a notarial deed. Any attempt to execute the transfer of property rights in any other form would render such an agreement void.

In principle, the actual transfer of ownership can be accomplished through a single document, combining the company agreement (which must also be in the form of a notarial deed in this case). However, this practice is not commonly used. More frequently, the ownership transfer agreement regarding the real estate constitutes a separate document. This is a recommended approach by legal commentators to avoid uncertainties about the transaction’s validity.

Valuation of real estate in the context of an in-kind contribution

It is necessary to conduct a valuation before making a non-monetary contribution to a company, regardless of whether it is real estate or another asset. This is because, for real estate to be contributed, it must meet three fundamental criteria: the right to the property must be transferable, the real estate must have economic value, and the real estate itself must have balance sheet capacity, meaning it must be capable of being included within the company’s assets.

In the case of a joint-stock company, founders prepare a written report that should specify the nature of the non-monetary contributions, the number, and type of shares or other participation units issued in exchange for them, and the valuation method applied. Such a report is generally subject to examination by a certified auditor.

Valuation determines the number of rights or shares allocated to the contributor. This is significant regarding the consequences associated with the overvaluation of non-monetary contributions. Article 175 of the Commercial Companies Code, which applies to limited liability companies, stipulates that if the value of non-monetary contributions has been significantly overstated compared to their market value on the date of the company agreement, the shareholder who made such a contribution and the members of the management board who, knowing this, registered the company, are jointly liable to compensate the company for the missing value. In the case of a joint-stock company, the legislator has included a similar provision where shareholders and management board members are jointly responsible if the value of non-monetary contributions has been significantly overstated.

The process of making an in-kind contribution to a company

Real estate can generally be contributed in two ways:

  • During the formation of the company.
  • In connection with an increase in the share capital (for capital companies).

Company agreement

Suppose partners or shareholders decide to contribute real estate to the company right from the start, during the company’s formation. In that case, it is essential to include this information in the company’s founding document, which could be the company agreement or the articles of association. The regulations governing different types of companies require that these documents specify the contributions made by the partners and indicate their values. If partners anticipate the possibility of making non-monetary contributions to the company, it is advisable to include provisions on this in the initial stages of drafting the agreement.

It is crucial to note that the description of the real estate to be contributed should be comprehensive and specific. This should include at least:

  • The location of the property.
  • Parcel number.
  • Surface area.
  • Land registry number and the court maintaining the land registry.

Furthermore, real estate can only be contributed to a limited liability company if the company agreement is in the form of a notarial deed. If the company is established using a template agreement and the S24 system, the share capital can only be covered by contributions in the form of cash.

Increase in share capital

If real estate is to be contributed during the company’s existence, for example, due to a new shareholder joining, the transfer of ownership of real estate can occur through a resolution of the partners to increase the share capital. The resolution of the partners or shareholders regarding the increase in share capital should also include a detailed description of the non-monetary contribution, as mentioned in the previous section. In addition, in the case of a joint-stock company, this resolution should contain information about the nature and valuation of non-monetary contributions, as well as the individuals who are to subscribe for shares in exchange for such contributions, along with specifying the number of shares to be allocated to each of them.

In both of the above scenarios – whether when registering the company or when registering an increase in its capital – the actual transfer of real estate should occur within the following timeframes:

  • In the case of a limited liability company, the real estate should be transferred to the company before submitting the application for registration of the company or its capital increase. This is because the management board of a limited liability company is required to declare that the contributions have been made.
  • For a joint-stock company, shares issued in exchange for non-monetary contributions should be fully paid up no later than one year after the company’s registration.
  • In the case of a simple joint-stock company, the law stipulates that contributions should be entirely made within three years from the date of the company’s registration, and the management board immediately passes a resolution confirming the complete contribution by the shareholder.

Agricultural land as in-kind contribution to a company

The law also allows for agricultural land to be contributed to a company. According to the Civil Code, agricultural land refers to real estate that can be used for agricultural production, including crop farming, animal husbandry, horticulture, fruit cultivation, and fisheries. In practical terms, agricultural land includes fields, orchards, pastures, ponds, and farm buildings.

Like other types of real estate, agricultural land will become the company’s property (or the partners’ joint property). This is significant because, according to the Law on Shaping the Agricultural System, agricultural land can only be acquired by an individual farmer unless the law provides otherwise. However, this provision does not apply to agricultural land with an area smaller than 1 hectare. In such cases, only notification to the National Support Centre for Agriculture is required, along with an excerpt from the Land and Building Registry. If the agricultural land being contributed exceeds this size, obtaining the consent of the Director of the National Support Centre for Agriculture is necessary, which is an administrative decision regarding the possibility of transferring ownership of the land to the company.

Registration obligations

After transferring ownership, it is necessary to update the legal status in the land registry. Regardless of whether the ownership of the real estate is transferred to all partners of the civil partnership or to the company itself in the case of commercial companies, changes in the land registry (KW) will need to be made. This change is constitutive, and the date of its completion will be the date of registration.

Liability of a shareholder for defects in real estate contributed to the company

In the case of a civil partnership, Article 862 of the Civil Code contains provisions stipulating the liability of a shareholder who commits to contribute ownership of a thing to the company. This liability includes responsibility for warranty defects as well as the risk of loss or damage to the property, and it is governed by the rules applicable to sales contracts. If the property is contributed for the sole purpose of use, the rules applicable to lease agreements will apply in the same regard. This means a shareholder is responsible for defects in the real estate they contributed to the civil partnership, similar to how a seller is liable to a buyer. Therefore, if the real estate has physical or legal defects, the shareholder will be held responsible for warranty claims and may also be liable for damages resulting from non-performance or improper performance of the agreement.

For capital companies, it should be noted that if a shareholder or shareholder contributes real estate with defects, they are obligated to compensate the capital company for the difference between the value agreed upon in the company’s agreement or articles of association and the actual market value of the contribution. The company’s agreement or articles of association may also specify other rights that the company has in such cases.

Tax obligations

Whether the contribution of real estate to a company entails tax obligations depends on the specific circumstances of each case.

In general, the contribution of real estate to a company, if it does not constitute an organized part of a business, is subject to the provisions of the Value Added Tax (VAT) Act. According to established positions of tax authorities, the act of in-kind contribution (depending on its nature) can be treated as either a supply of goods under Article 7 (transfer of the right to dispose of goods as an owner) or as the provision of services under Article 8 (any service other than the supply of goods, especially the transfer of rights to intangible assets). However, it is important to note that only the shareholder who is a registered VAT payer, in accordance with Article 15 of the VAT Act, is obligated to pay VAT. Furthermore, the transaction may be exempt from tax obligations under the circumstances described in Article 43(1)(10) of the VAT Act.

It should also be noted that the contribution of real estate to a company can qualify as capital gains income under Article 17(1)(9) of the Personal Income Tax (PIT) Act. The transfer of real estate to the company does not represent a gain for the partner. Instead, their benefit consists of acquiring shares or ownership interests, subject to PIT. Therefore, the tax obligation arises on the side of the partner. The taxable basis for calculating the tax is the value of the contribution indicated in the company’s agreement or articles of association. In the case of companies, contributing real estate is tax-neutral for the shareholder because they benefit from a tax exemption under Article 21(1)(50b) of the PIT Act.

For capital companies, which are legal entities, the contribution of real estate will trigger the obligation to pay corporate income tax (CIT) if the company is a CIT taxpayer. According to the CIT Act, all capital companies are CIT taxpayers, as well as limited companies, limited joint-stock companies, and general companies that have their registered office or management in Poland if their partners are not exclusively natural persons and the general company does not submit timely information about the right to share in its profits. The basis for taxation will be the equivalent value of the contribution.

The transaction may also be subject to the tax on civil law transactions (PCC) because the contribution of real estate to the company may involve changing the company’s agreement, which is a taxable event. The tax is calculated at a rate of 0.5% of the value by which the company’s capital increases, effectively the value of the real estate. To settle the tax with the tax authorities, a tax declaration should be filed within 14 days from the date of amending the company’s agreement.


Contributing real estate as a non-monetary contribution to a company is a complex issue, and the specific rules may vary depending on the type of company involved. Therefore, it is advisable to consult with a lawyer and/or tax advisor before proceeding with non-monetary contributions in the form of real estate rights.

Questions and answers

No, in this way, the wife will relinquish her co-ownership of the real estate.

After 6 years, in accordance with Article 118 of the Civil Code.