INSUFFICIENT CONTRIBUTION OF CHARTER CAPITAL IN SINGLE-MEMBER LIMITED LIABILITY COMPANY

Charter capital is one of the basic legal conditions that need to be ensured in an enterprise’s business operations. However, in reality it is not always guaranteed that this capital is contributed in full and on time according to regulations. In case of insufficient contribution of charter capital in single-member limited liability company, what are the legal consequences and what should businesses do?

How is the charter capital of single-member limited liability company determined?

Charter capital is determined as the amount of capital contributed or committed to contribute at the time of company establishment.

Specifically, the charter capital of single-member limited liability company upon enterprise establishment registration is the total value of assets committed to contribute by the company owner and recorded in the company’s charter.

How is the deadline for contributing charter capital to single-member limited liability company?

Enterprises must comply with the charter capital contribution deadline as prescribed by law.

The owner shall contribute adequate and correct assets as promised when applying for enterprise registration within 90 days from the issuance date of the Certificate of Enterprise Registration. The time needed to transport or import the contributed assets and for completing ownership transfer procedures will be added to this 90-day period.

During this period, the owner shall have rights and obligations that are proportional to the promised capital.

What should be performed upon insufficient contribution of charter capital in single-member limited liability company?

The law sets out legal procedural requirements for cases of not contributing or not being eligible to contribute capital to the charter of single-member limited liability company, because the owner has not contributed capital or not contributed the full amount of committed capital. Accordingly, the company must register to change its charter capital to the actual amount of contributed capital.

The implementation deadline is 30 days from the last day to contribute the full capital contribution according to regulations.

Correspondingly, the owner must be responsible in proportion to the committed capital contribution for the company’s financial obligations arising in the period before the last date the company registers to change its charter capital according to regulations.

Charter capital is one of the basic legal conditions that need to be ensured in an enterprise’s business operations.

What are the responsibilities of the company owner upon insufficient contribution of charter capital in single-member limited liability company?

The owner’s liability for the company’s financial obligations and the damage caused by the failure to contribute or to fully and punctually contribute charter capital shall be equal to all of the owner’s assets.