service items

Assets (Stocks) Valuation and Appraisal Summary｜Non-cash Investment

Can assets other than cash be used as capital contribution for capital increase and issuance of new shares?
Answer: Yes, but not during the public offering of new shares. In terms of the process, the company should first implement the asset ownership transfer registration procedure, and include its name or title and the type, quantity, price or valuation standard of the property and the company in the subscription form. The number of shares approved.

How should asset pricing be evaluated?
Answer: The price of assets can be evaluated by impartial relevant agencies or experts, and according to the method for accountants to check the registered capital of a visa company, the accountant should obtain the appraisal price opinion of the relevant agencies or experts, and evaluate whether to adopt it.

Newly established company, type of capital contribution

The company already exists, the type of capital contribution at the time of capital increase

Introduction to setting up a company with stock price

According to Article 131, Paragraph 3 of the Company Law, "The promoter's capital contribution, in addition to cash, may be offset by property and technology required by the company's business." According to the Ministry of Economic Affairs (Republic of China) (the same below) on January 10, 1966 Jingshangzi No. 00632 letter, "property needed for the company's business" also includes "equity or shares of other companies". In addition, the Financial Supervisory Commission’s Letter No. 1100362895 dated August 02, 2010 held that in the case of company establishment, capital contribution with the stock of other listed companies is not a transaction of securities and is exempt from securities transaction tax. , and is not subject to the prohibition principle of over-the-counter trading under Article 150 of the Securities Exchange Law.

Investors who invest in stocks to establish a company should first register the stock transfer to the investment company . However, when registering the transfer, special attention should be paid to the name of "○○ Company Preparatory Office Representative ○○○", which is recorded on the back of the stock and The register of shareholders is calculated to complete the transfer of shares. According to the resolution of the Ministry of Economic Affairs on September 13, 1994, when discussing the "company law and company registration doubt meeting", when the company was established, the promoters should use the stock price to offset the payment of the share, and the transfer of the stock should be completed before applying for the establishment of the company Registration shall be handled in accordance with Article 164 and Article 165 of the Company Law, and shall be recorded on the back of the stock certificate and the shareholder list in the name of "XXXX Company Preparatory Office Representative XXXX", and shall be attached to the company that initiated the establishment to issue an agreement to use the stock certificate The proof documents for the payment of shares shall be registered for transfer, and the company shall be renamed "○○ Company" after the company has completed the establishment registration and obtained legal personality. In addition, in accordance with Article 7 of the Measures for Accountants to Check and Verify the Registered Capital of a Company, the company’s registered capital must first be checked and certified by an accountant. If the stock is used to offset the payment of shares, the relevant certificates for the transfer and delivery of the stock should also be presented. The accountant’s audit report should detail the following: Only the name, type, quantity, price or valuation standard of the person whose property is used to pay the share capital, and the shares or certificates issued by the company can be applied for company registration.

In addition, it should be noted that when the stock price is used to measure its value, if there is a decimal point in the stock conversion value, the decimal point shall be rounded up, and there may be doubts about overestimating the stock value. This may also be challenged by the competent authority and hinder the registration. Therefore, the occurrence of this problem must be considered when evaluating the value of the stock.

The relaxation of the company law from cash contributions to new types of contributions such as stocks, technology, and labor services can give companies and shareholders more flexibility and choices. At present, in our country, for a company in the process of capital contribution by share price, the transfer procedure cannot only be transferred and handed over to the investment company by endorsement of the stock. It is required to complete the transfer of the stock in the name of "○○Company Preparatory Office Representative ○○○" , can only apply for company establishment registration and other restrictions.

Valuation standard based on share price
Where stocks are used to offset payment for shares, it shall be checked whether its valuation complies with the following regulations:
(1) The stock of a company that is not listed, listed on the OTC, or listed on the OTC shall be valued based on the net asset value of the company on the measurement date.
(2) The stocks of emerging companies can be valued by the average transaction price on the measurement day. However, if the stock has no transaction price on the same day, it shall be evaluated according to the average transaction price on the last day before the measurement date; if the transaction price fluctuates drastically, it shall be evaluated according to the average transaction price of each day within 30 days before the measurement date.
(3) The stocks of listed and OTC companies can be valued at the closing price on the day of measurement. If the stock has no trading price on the day, it shall be valued according to the closing price on the last day before the measurement date; if its price fluctuates drastically, it shall be valued according to the average price of the closing prices of each day within 30 days before the measurement date.
(4) The measurement date specified in the preceding three items shall be within two months of the benchmark date.

Documents required for stock pricing

Tax clarification on subscribing for new shares by holding stocks of other companies
1. When a company issues new shares, the subscribing shareholders use the stocks of other companies as capital contributions to pay for the shares, if it complies with the Ministry of Economic Affairs’ No. 00632 Letter on January 10, 1966 and Article 419, Item 1, Subparagraph 4 of the Company Law (Editor Note: Deleted), Article 272, Article 274 Item 1, and Item 2, the stocks that should be used to offset the payment of shares shall be transferred to the invested company. The part of the amount of the paid-in stock that exceeds the acquisition cost is the stock exchange income of the subscribing shareholders, and the income tax is exempted during the period when the stock exchange suspends income tax; however, if the stock is in compliance with Article 12 For the stocks stipulated in Article 1, the par value portion shall still be declared and taxed by the subscribing shareholder as dividend income. 2. Letter No. 00632 issued by the Ministry of Economic Affairs on January 10, 1966 stated that "stocks are securities and belong to a type of "property". If the promoters of a joint stock company use stocks to pay for shares, they shall refer to Article 131, Article 3 of the Company Law. According to the provisions of this article, the stock should be the property required by the company’s business, and it should be recognized after the company provides an explanation and valuation.” Any such case where the stock of another company is used to pay for the subscription of new shares should be After being approved by the Ministry of Economic Affairs, the subscribing shareholders shall declare and pay comprehensive income tax in accordance with the law in the year of transfer. (Ministry of Finance 69/05/05 Taiwan Caishui No. 33561 Letter)

Relevant laws and regulations (excerpt)
Article 131 of the Company Law When the promoters subscribe for the shares to be issued for the first time, they shall immediately pay the full share capital and elect directors and supervisors.
Article 198 shall apply mutatis mutandis to the selection method referred to in the preceding paragraph.
The stock payment in Paragraph 1 may be offset by the property needed by the company.

Article 156 In addition to cash, the shareholder's capital contribution may be offset by the company's monetary claims or technology required by the company; the offset amount must be approved by the board of directors and is not subject to the restrictions of Article 272.

Article 272 When a company issues new shares to the public, it shall pay in cash. However, if it is subscribed by the original shareholders or by agreement of a specific person, but not publicly issued, the property required by the company's business may be used as capital contribution.

Article 274 When a company issues new shares and does not issue them to the public in accordance with the proviso of Article 272, it shall still prepare a warrant in accordance with the provisions of Paragraph 1 of the preceding Article; , and include his or her name and the type, quantity, price or valuation standard of the property and the number of shares granted by the company in the share subscription form.
After the property capital contribution in the preceding paragraph is implemented, the board of directors shall send to the supervisor for review and comments, and report to the competent authority for approval.

Article 7 of the Measures for Accountants to Check the Registered Capital of Visa Companies Accountants are entrusted to check the registration of the establishment of the visa company or the registration of mergers, splits, acquisitions, share conversions, increases in paid-in capital changes, etc. Creditor's rights, technical pricing, credit capital contributions, labor service capital contributions, stock offsets, other properties, dividends, statutory surplus reserves, capital reserves, mergers, divisions, acquisitions, share conversions, share exchanges, new shares with restricted employee rights) and their issuance The price of shares, the number of issued shares, and the amount of capital, if there is a premium or discount, shall state the amount of each share issued and the accounting treatment method, and state the total number of issued shares and the amount of capital before and after the capital increase.
Accountants are entrusted to check and verify the registration of the capital amount in the preceding paragraph, and the items to be checked are as follows:
1. For cash stock payment: check the payment status of the share payment, and check the deposit certificate if it has been deposited in the bank; if it is deposited and transferred in the form of bills, check whether it has been cashed; for the currency owned by the company If the creditor's rights are used to offset the payment of shares, it should be checked whether the cause of the occurrence is real; if the share funds have been used, the company's statement should be checked, and all certificates should be checked; transfer of affairs.
2. Technology price, stock offset or other property offset against share capital: The name of the company's shareholders, the type, quantity, price or valuation standard of the property, and the shares or certificates issued by the company shall be checked.
3. Technical pricing and other property to offset the payment of shares: Except for overseas investment companies, accountants should obtain appraisal opinions from relevant agencies, organizations or experts, and evaluate whether to adopt it; and check whether the relevant property has been established or increased capital Registered with the company before the base date; but if there is no registration requirement according to the law, it shall be checked that the property has been delivered to the company before the establishment or the base date of capital increase.
4. Stocks for payment of shares: It shall be checked whether the valuation is handled in accordance with the following regulations:
(1) The stock of a company that has not been listed, listed on the OTC, or not listed on the OTC may be evaluated by the company's net asset value on the date of measurement.
(2) The stocks of emerging companies can be valued by the average transaction price on the measurement day. However, if the stock has no transaction price on the same day, it shall be evaluated according to the average transaction price on the last day before the measurement date; if the transaction price fluctuates drastically, it shall be evaluated according to the average transaction price of each day within 30 days before the measurement date.
(3) The stocks of listed and OTC companies can be valued at the closing price on the day of measurement. If the stock has no trading price on the day, it shall be valued according to the closing price on the last day before the measurement date; if its price fluctuates drastically, it shall be valued according to the average price of the closing prices of each day within 30 days before the measurement date.
(4) The measurement date specified in the preceding three items shall be within two months of the benchmark date.
5. Dividends transferred to capital: According to the company's articles of association, the financial statements of the shareholders' meeting minutes (shareholders' consent), and the profit distribution proposal, check whether the profit distribution is in compliance with the relevant provisions of the company law.
6. When the statutory surplus reserve is converted into capital: it shall be checked according to the calculation of the amount converted into capital and the amount withdrawn in the minutes of the shareholders meeting (shareholders’ consent letter) in compliance with the relevant provisions of the Company Law.
7. Those who transfer capital reserves to capital: check whether the type, source, and content comply with the relevant provisions of the Company Law, and whether the transferred amount is in accordance with the minutes of the shareholders' meeting (shareholders' consent letter), etc.
8. Merger of companies: According to the company law, enterprise merger and acquisition law and other relevant laws and regulations, the minutes of the shareholders meeting and the board of directors (shareholders' consent), the merger contract, the names of shareholders, the number of allotted shares and other related matters, Review and describe the accounting treatment method adopted.
9. Issuance of new shares by division: It shall be checked in accordance with the Company Law, the Enterprise Merger and Acquisition Law, and other relevant laws and regulations, the minutes of the shareholders meeting and the board of directors, the division plan, the name of the shareholder, the number of allotted shares, and other relevant matters, and shall Describe the accounting treatment method adopted.
10. Acquisition and issuance of new shares: According to the Company Law, Enterprise Merger and Acquisition Law and other relevant laws and regulations, shareholders meeting, minutes of the board of directors, purchase contract, names of shareholders, number of allotted shares and other related matters, they shall be checked and described. State the accounting treatment method adopted.
11. Share conversion and issuance of new shares: shall be checked in accordance with the Company Law, Enterprise Merger and Acquisition Law, and other relevant laws and regulations, minutes of shareholders' meeting and board of directors, share conversion contract, shareholder's name, number of allotted shares, and other related matters. , and describe the accounting treatment method adopted.
When the accountant checks the capital amount of a closed joint stock limited company according to the provisions of the preceding paragraph, he shall check the number of shareholders, and if there is any non-cash contribution, he shall also check the letter of consent of all shareholders, the type of capital contribution recorded in the company's articles of association, the offset amount, and the amount approved by the company. The number of shares; in the part of credit and labor investment, the name of the shareholder and whether it meets a certain ratio announced by the competent authority should be checked separately, and there is no need to submit a valuation report.

Related explanations
△Property contributions can be made by consulting impartial relevant agencies or groups or experts for price assessment. If it is difficult to assess the price of property contributions, you can consult impartial agencies or experts for assessment. The so-called impartial agencies and groups have the ability to evaluate properties Specialized personnel, who can make a reasonable appraisal from an objective standpoint, the Land Registry Office for land valuation, the provincial industry association or provincial machinery industry association for machinery valuation, and the provincial construction industry association for building valuation. If the department thinks it is appropriate, it is all right, and the term "expert" refers to a person with a certain kind of specialized knowledge, and his opinion is generally considered correct, and it is not limited to architectural technicians. (No. 56, 4, and 4 of the Ministry of Economic Affairs No. 08180)

△The payment of shares with stocks should be the property required by the company’s business. Stocks can be checked as securities, which are a type of “property”. Article 31 of Article 31 stipulates that the stock should be property necessary for the company's business, and the company should first provide an explanation and estimate the value before it can be recognized.
(Ministry of Economic Affairs No. 66, 1, 10, Shang 00, 632)

△The promoters are not allowed to use the mining rights to offset the payment of shares 1. According to the letter No. 229030 of the Commercial Department of the Ministry of Commerce 81, 1, and 6 Taishang Wufazi No. 229030, "the promoters shall use the property required by the company's business to offset When paying for the shares, the property shall be transferred to the company under establishment." Reply to the Ministry of Mines (Mining Department) August 1, 1, 27 Jingkuangzi No. 080668 to "Mining rights in the transfer However, the transferee must be a natural person or a legal person according to the law, and the company cannot register for the transfer of mining rights in accordance with the mining registration rules before the company has completed the registration of the establishment of a legal person and obtained the company license." , the company under establishment shall not be the transferee of the mining right, and the promoters cannot use the mining right to offset the payment of shares.
2. When a company limited by shares applies for establishment registration, it shall immediately receive full payment for the shares; and the transfer of mining rights shall apply to the competent authority of the province (municipality directly under the Central Government) for approval by the Ministry of Economic Affairs in accordance with Article 17 of the Mining Law. Article 17 stipulates that without approval, the transfer contract shall be invalid. This is what the letter said, "Based on the principle of incorporation, first agree to the establishment of the company, and after the transfer of the mining rights is completed, the established company will submit a certificate of completion of the transfer." Section B, except when registering with the company In addition to the requirement that the company should receive full share capital immediately, and whether the company can obtain the mining rights after establishment is still subject to the approval of the competent authority, it is also uncertain whether the share capital can be replenished later, and it is difficult for this department to approve the establishment. (No. 81, 3, 9, 200414 of the Ministry of Economic Affairs)

△Resolve doubts about the payment of shares when the company is established 1. In accordance with the provisions of Article 131, Paragraph 3 of the Company Law, the shares paid by the promoters shall be offset by the property required by the company's business. Accordingly, if the promoters pay the share capital with property other than cash, and the property is needed for the business of the company again, it is not inconsistent with the law. Name, type of property, quantity, price or evaluation criteria, and the number of shares issued by the company.
2. There is no provision in the Company Law on whether Section B can be issued at a premium when the company is established. Based on the principle of private law autonomy, it is not impossible to stipulate it in the articles of association with the consent of all promoters.
(Ministry of Economic Affairs 82, 3, 27 Commercial No. 206392)

△Initiation, establishment and issuance of new shares can be paid with the property required by the company’s business. According to the first paragraph of Article 131 of the Company Law: “When the promoters subscribe for the shares that should be issued for the first time, they should immediately fully paid-up shares and appoint directors and supervisors", the third clause of the same article stipulates: "The share payment in the first paragraph can be offset by the property required by the company's business"; also the same as Article 272 of the law Regulations: "When a company issues new shares to the public, it shall use cash as the share price; however, if the original shareholders subscribe or subscribe by agreement with a specific person, and the public offering is not made, the property required by the company may be used as capital contribution." Accordingly, both the establishment and the issuance of new shares (capital increase) can be offset by the property required for the company's business to pay for the shares. As for whether it is the property needed by the company, it should be determined by the relevant industry competent authority on a case-by-case basis.
(Ministry of Economic Affairs No. 93, 6, and 9 Shangzi No. 09300093750 Letter)

△If the land is used to offset the payment of shares, the company should first practice the land ownership transfer registration procedures. , the company should first practice the land ownership transfer registration procedures before applying for company registration. As for other property that is used to offset the payment of shares, such as stocks, machinery and equipment, etc., similarly, relevant proof documents of property transfer or delivery should also be presented.
(Ministry of Economic Affairs No. 09402410621 Letter No. 09402410621)

△Shares for payment of shares According to the provisions of Article 131 of the Company Law, the issued shares can be offset by the property required by the company's business. Accurately, the promoters shall use the shares to offset the subscribed shares, and if the property is required by a professional investment company, it may be offset by itself. If you have any doubts about the application of Article 150 of the Securities and Exchange Act on the above listed company’s share payment, please contact the Securities and Futures Bureau of the Financial Supervisory Commission of the Executive Yuan directly.
(Ministry of Economic Affairs Jingshang Zi No. 09402094290 Letter No. 94, 7, 15)

△According to Article 150 of the Securities and Exchange Law, listed companies’ shares should be purchased and sold in the centralized securities trading market opened by the stock exchange. Investors should follow the provisions of Article 131 of the Company Law. , using the listed securities held to offset the payment of shares is not a transaction of securities, and Article 150 of the Securities Exchange Act does not apply.
(Letter No. 0940127463 of the 94th, 8th, and 25th Financial Management Commission of the Financial Supervisory Commission)

△ "Providing land use rights for a certain period of time" is not the property specified in this article It should be a regulation on the transfer of ownership; as for the shareholder paying the share capital with the property required by the company's business, it should still be in accordance with the 88206278 letter on April 30, 1988. company. In addition, "providing land use rights for a certain period of time" is not "property", and does not conform to the provisions of Article 131, Item 3 of the Company Law, "The first item of the stock payment can be offset by the property required by the company's business." bright.
(Ministry of Economic Affairs No. 102, 8, 16 Jingshang Zi No. 10202096260 Letter)

△ Shareholders of a limited company can offset the amount of capital contribution to the capital increase of a joint stock company. payment". Accordingly, your accountant asked the shareholder to use the capital contribution of "B Co., Ltd." to offset the capital increase of the non-public offering company "A Investment Co., Ltd.", if the assets of B Co., Ltd. If necessary, this proposition is still feasible. However, this case involves the transfer of the capital contribution of a limited company. Shareholders should obtain the consent of more than half of all other shareholders before transferring the capital contribution (see Article 111, Item 1 of the Company Law).
2. Since "A Investment Co., Ltd." is not a public offering company, its capital contributions are exempted from being submitted to the supervisor for inspection in accordance with Article 274, Item 2 of the Company Law.
(Ministry of Economic Affairs No. 102, 12, 23 Jingshang Zi No. 10202145030 Letter)

△ The question of paying the share capital with the technology required by the company for the establishment of a joint stock company 1. According to Article 156, Item 5 before the amendment of the Company Law on November 12, 1990: "The capital contribution of shareholders, except the capital contribution of promoters and capital Unless otherwise stipulated by the law, it shall be limited to cash." However, at that time, Article 131, Item 3 and Article 272 of the Company Law stipulated that the promoter's share payment and the company's new share issuance payment could be offset by the property required by the company's business There are also related letters and explanations for the technical capital contribution price offsetting the payment of shares (Jingshangzi No. 88207629 on May 25, 1988, and Jingshangzi No. 89218549 on October 2, 1989). In addition, the previous article was amended on November 12, 1990 to be priced by technology, which clearly shows the clear intention of the legislator. Therefore, the "properties necessary for the business" stipulated in Article 131, Item 3 and Article 272 of the Company Law shall include technology.
2. Second, in accordance with the provisions of the Company Law, shareholders with unlimited liability may make capital contributions with credit or labor services, while shareholders with limited liability may not make capital contributions with credit or labor services (see Articles 43, 115, and 117). In addition, when technology is invested and issued, the value of the investment target can be determined through valuation, and the company can obtain the ownership, use, and income rights of the invested technology (refer to the explanation of Jingshangzi No. 09102220840 issued by the Ministry on October 15, 1991); as for labor services , the individual characteristics of the service provider are more important, and it is difficult to determine its value through evaluation. However, specific cases should still be handled at the discretion of the competent authority.
(Ministry of Economic Affairs No. 104, 6, 1 Jingshang Zi No. 10402411780 Letter)

△There are doubts about the applicability of the technology required by the company for the establishment of a joint stock company to offset the payment of shares.
According to Article 131 of the Company Law: "When the promoters subscribe for the shares that should be issued for the first time, they should immediately pay the full share and elect directors and supervisors (item 1). The share payment in the first item can be The property needed for the company’s business is offset (item 3).” This time, the “property needed for the business” stipulated in item 3 of Article 131 of the Company Law shall include technology (Jing Shang Zi No. reference to the letter). Therefore, when a company is initiated and established, and the promoters' share capital is offset by the technology required by the company's business, the offset amount may be determined in accordance with the provisions of Article 131, Item 1 above, after the promoters have confirmed the paid-up share capital and The provisions of Article 156, Paragraph 7 shall not apply to decisions made during the selection and appointment of directors and supervisors.
(Ministry of Economic Affairs No. 104, 7, 30 Jingshang Zi No. 10400063840 Letter)

Source: Compilation of relevant laws and regulations, the Ministry of Economic Affairs, the National Taxation Bureau, Internet information, and Jingxun Joint Accountants, Huang Zehan, accountant of Jingxun Joint Accounting Firm