Non-cash consideration (Swedish: apportegendom) (contribution in kind) is property other than money, such as inventory, real estate or shares in another company, used to pay for shares. It occurs on formation or in a non-cash issue. It must be of use to the business and be valued prudently, with an auditor reviewing the valuation.
The share capital increases and holdings may change, causing dilution for existing owners. The new shares are entered in the share ledger. Clear documentation of the valuation helps in later reviews.
A non-cash issue is a share issue in which the new shares are paid for with property instead of cash.
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Share capital is the capital the shareholders contribute to a company in exchange for shares.
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A valuation is an estimate of what a company or a shareholding is worth.
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A new share issue is when a limited company issues new shares for payment to increase its capital.
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