In order to cover losses of a limited liability company, the articles of association may authorize the shareholders to order the provision of additional payment to the capital of the company. Such additional payments do not comprise a part of the registered capital (it will increase the tied-up reserves of the company) and those amounts not required to cover the losses shall be repaid to the shareholders. Pursuant to the former Companies Act and accounting rules, an additional payment had to be provided in the form of actual cash contribution which means that no set off or in-kind contribution was allowed.

As of 15 March 2014, the Companies Act was replaced by the new Civil Code. Among other changes and as opposed to the rules prior to the new Civil Code, it allows for the shareholders to provide additional payment in the form of in-kind contribution as well.

As a result, an additional payment can also be provided by converting shareholders’ loan receivables or providing other valuable assets to the relevant company. The rest of the regulations relating to the additional payment remained unchanged.

However, the changes introduced by the Civil Code have not yet been mirrored by any changes to the Accounting Act, which still provides that additional payments must be booked as at the date when the cash is credited by the receiving company. This leaves the accounting position unclear for additional payments made in kind, as no cash movement occurs.