Liechtenstein Venture Cooperative (LVC)
The Liechtenstein venture cooperative (LVC) is a legal entity governed by Liechtenstein law whose type of legal entity is that of a small cooperative which offers legal certainty for inventors, supporters and investors.
The members of a Liechtenstein venture cooperative use the cooperative to bring ideas, work and capital together. The LVC serves as a platform for cooperation with the aim to advance an innovation and then bring it to the market. It offers the structure to make the weighting of financial participation and participation in the form of know-how or work easier and to make it fair for all participants.
Upon the formation of an LVC, the innovator directly creates a legal entity of its own for his idea, thus preparing the way for a simplified cooperation with the experts and capital providers. An LVC makes it possible for various persons (private individuals and legal entities) to contribute work as an investment, to make non-cash investments and capital investments which are necessary for the development of an innovation. In return for the contribution to the LVC of an idea or the preparatory work associated therewith, the inventor(s) receive(s) units in the company. A major part of the added value of the LVC lies in the development of the innovation and in the related increase in value.
The sale by the LVC of the marketable invention has no corporate earnings tax consequences in the countries where the members are resident. Nor has the alienation of the invention to a Liechtenstein company limited by shares in return for shares in the purchasing company any corporate earnings tax consequences in the said countries where the members are resident. The corporate earnings tax consequences in the respective country of residence do not arise until dividend payments to the foreign members are actually made.
The corporate bodies of an LVC are the general meeting of members, the managing board, the auditors and commissions and delegates, in line with the resolutions and regulations of the general meeting of members.
In principle, an LVC is free to choose its corporate name. However, it is recommended that the planned corporate name be first submitted to the Office of Justice, in order to eliminate the risk that there are two companies with the same or very similar names.
The formation of an LVC only makes sense if several persons work on an innovation. First, there is no capital requirement. The innovation is the capital contributed to the company. For this purpose, the innovation is described as precisely as possible in an innovation document which is then signed and officially certified. Upon contribution of the idea, it no longer belongs to the inventor but to the LVC. The formal formation of an LVC requires various documents after the signing of which the LVC is deemed to have been formed: Articles of association, formation deed, founder’s resolution, innovation document, membership contribution regulations and unit register. The formation documents are also needed for the tax administration and the opening of a bank account.
The managing board can authorise the president to sign all documents alone, with the exception of the founder’s resolution and the formation deed. The other documents are mentioned in these two documents and are adopted jointly. The entry of an LVC in the commercial register is voluntary, but the advantage associated therewith is that the name of the LVC can be registered, thus increasing its visibility to business associates. If an LVC is entered in the commercial register, it will also be entered in the tax register. If the LVC is not entered in the commercial register, it must register with the tax administration and will then obtain a tax number.
There is no disclosure requirement for LVCs.