When a foreign founder incorporates a French company, the stated share capital is not always paid in full on the day the company is registered. French company law allows a limited part of a cash contribution to remain unpaid for a defined period, particularly in a simplified joint-stock company (SAS, or société par actions simplifiée) and a private limited liability company (SARL, or société à responsabilité limitée). That flexibility does not turn the unpaid balance into an optional promise. It creates a debt owed by the shareholder to the company, with a timetable, a person responsible for calling the funds and evidence that matters if the founder, the bank or the company later disputes what was paid.
The question is especially important for a founder living outside France. A transfer may come from a foreign account, pass through a correspondent bank, use a currency conversion, or be described only as “funding” in the payment reference. Those details can make it difficult to prove that a particular sum released subscribed capital. This guide explains the minimum payment at incorporation, the five-year ceiling, the call for payment, the consequences of delay, the position of a French director and the practical file a foreign founder should assemble. The legal rules below are based on official texts and decisions, with the original French wording quoted where the exact legal language matters.
It should be read alongside the firm’s French company formation and corporate compliance guide, which provides the wider roadmap for a foreign founder setting up and operating a French company.
I. How much French company capital must a foreign founder pay, and when?
A. SAS or SARL: how much cash capital must be released at incorporation?
The first distinction is between subscribing capital and releasing, or paying, capital. A founder subscribes when the founder undertakes to contribute a stated amount in exchange for shares or parts. The founder releases capital when the money or asset is actually transferred to the company, or to the depositary holding the funds before registration. A French filing may therefore show a capital amount that is higher than the amount already paid, provided that the statutory conditions for deferred release have been respected.
An SAS is a simplified joint-stock company. It may have one or several shareholders and is often chosen by foreign founders because its internal governance can be drafted flexibly. Article L227-1 of the French Commercial Code states: « Une société par actions simplifiée peut être instituée par une ou plusieurs personnes qui ne supportent les pertes qu’à concurrence de leur apport. » The official text is available in Article L227-1 of the Commercial Code on Légifrance. The reference to the contribution matters: limited liability does not erase the shareholder’s obligation to deliver the contribution promised in the subscription documents.
For cash contributions to an SAS, at least one half of the nominal value of the subscribed shares must be paid when the company is formed. Article L225-3 of the Commercial Code provides: « Les actions de numéraire sont libérées, lors de la souscription, de la moitié au moins de leur valeur nominale. » The balance can be paid in one or several instalments on a decision of the board or executive body, within a period that cannot exceed five years from registration. The article also distinguishes contributions in kind, which must be fully released when issued. Read the complete rule in Article L225-3 of the Commercial Code.
A SARL is a private limited liability company. It is often used for a closely held business where the shareholders want a more prescribed statutory framework. Its cash rule is less demanding at the incorporation stage: at least one fifth of the amount of cash parts must be released. Article L223-7 says: « Les parts représentant des apports en numéraire doivent être libérées d’au moins un cinquième de leur montant. » The remaining amount must be released in one or several instalments on a decision of the manager within five years of registration. The full provision, including the rule restricting a new cash capital subscription while the existing capital has not been fully released, appears in Article L223-7 of the Commercial Code.
These percentages apply to cash contributions, called apports en numéraire. They do not describe every form of contribution. An asset contributed in kind, such as equipment or intellectual property, has its own valuation and release rules. In a SARL, Article L223-9 requires the articles of association to contain the valuation of each contribution in kind and states that, in defined circumstances, the shareholders are jointly liable to third parties for the value attributed to that asset for five years. The official source is Article L223-9 of the Commercial Code. A foreign founder should not treat a promise to transfer an asset later as equivalent to a cash deposit made at incorporation.
The depositary also has a documentary role. For a French joint-stock company, Article L225-6 provides: « Les souscriptions et les versements sont constatés par un certificat du dépositaire établi, au moment du dépôt des fonds, sur présentation des bulletins de souscription. » The rule is reproduced in Article L225-6 of the Commercial Code. In practice, the founder should retain the subscription form, the depositary certificate, the transfer confirmations, the account statement and the final filing documents. A bank confirmation that merely says “business funding” can be less useful than a document that identifies the company, the shareholder, the subscribed shares and the amount released.
For a foreign founder, the payment trail deserves attention before the incorporation file is signed. The transfer should normally be made in euros, or the file should show the exchange rate and the euro amount credited to the depositary. If the funds come from a personal account in another country, keep the account holder’s name, the account number or international bank account number (IBAN), the transfer reference and the date on which the depositary credited the funds. If the account belongs to a foreign parent company rather than to the future shareholder, the transaction may be a loan, an advance or a contribution by a different legal person. It should not be labelled as the founder’s personal release without checking the legal documents and the accounting treatment.
The public registration vocabulary can also cause confusion. A Kbis is the official extract showing the registered company’s legal information; it is issued after registration in the French Trade and Companies Register (RCS). Since the one-stop filing portal is now the Guichet unique operated through the National Institute of Industrial Property (INPI), the electronic filing may be submitted through the official French business formalities portal. The company is also recorded in the National Business Register (RNE). Neither the existence of a Kbis nor the fact that the declared capital appears in the registration extract should be treated as proof that every deferred instalment has already been paid. The payment evidence remains a separate part of the corporate file.
The French public administration also publishes a practical overview of the deposit and release of company capital on Service-Public. It is useful for the filing sequence, but the Commercial Code provisions linked above remain the primary legal references for the amount and deadline of the obligation.
A founder who selects an SAS because it has a low or flexible capital amount should still distinguish the capital from the company’s actual financing needs. A one-euro capital may be legally possible in many SAS structures, but it does not provide working cash, demonstrate that a foreign parent has funded operations or remove the obligation to release the amount actually subscribed. Conversely, a larger capital can support credibility with a bank or commercial partner, but every unpaid portion is a real obligation. The choice should be matched to the budget, the cash-flow forecast, the bank’s onboarding requirements and the intended financing route.
The same distinction is useful when comparing a branch with a subsidiary. A branch is an establishment of the foreign company and does not have share capital of its own in the same way as a new French company. A subsidiary, by contrast, has its own legal personality and its own subscribed capital. The branch/subsidiary choice is outside this article, but a founder should not use a capital-release rule for a subsidiary to describe a transfer to a French branch. The legal entity named on the subscription and deposit documents must be the entity that receives the funds.
B. What does the five-year deadline actually require after incorporation?
The five-year period runs from registration of the company, not from the date on which the founder receives a residence document, opens a French operating account, signs a first customer contract or completes the first financial year. For an SAS, Article L225-3 refers to the registration date and gives the relevant corporate body authority to decide how the balance is released. For a SARL, Article L223-7 gives the manager that role. The five-year limit is a legal outer boundary, not a general recommendation to wait until the last month.
The amount remaining unpaid should be identifiable shareholder by shareholder. If two founders subscribed different amounts, one founder’s payment does not automatically release the other founder’s balance. If the subscription documents provide for several instalments, the company should record the amount called, the date of the call, the deadline and the amount actually received. A foreign founder should ask for a written statement of account rather than rely on an informal message from a co-founder or a spreadsheet with no bank reference.
The articles of association are important because governance determines who can make the call and how shareholder decisions are documented. For an SAS, Article L227-9 provides: « Les statuts déterminent les décisions qui doivent être prises collectivement par les associés dans les formes et conditions qu’ils prévoient. » The complete article is available at Article L227-9 of the Commercial Code. The articles may allocate authority to the president or another executive, while reserving certain capital decisions for the shareholders. A call made by the wrong person, without the corporate approval required by the articles, creates avoidable evidence and enforcement problems.
The underlying civil-law obligation is direct. Article 1843-3 of the Civil Code states: « Chaque associé est débiteur envers la société de tout ce qu’il a promis de lui apporter en nature, en numéraire ou en industrie. » The official text is reproduced in Article 1843-3 of the Civil Code. The same provision says that a shareholder who promised a sum and did not pay it becomes, automatically and without a prior request, liable for interest from the day the sum was due, without prejudice to additional damages where appropriate. A foreign founder should therefore avoid assuming that a quiet period means that the obligation has disappeared.
Article 1843-3 also gives a procedural route when the legal calls have not been made within the required period. An interested person can ask the president of the court, sitting in emergency proceedings known as référé, either to order the directors or managers under a daily penalty to make the calls or to appoint a representative to complete the formality. The provision is particularly relevant when a company has become inactive, when the managers disagree or when the shareholders live in different countries. It does not mean that every disagreement over a transfer becomes a personal claim against the director. It does mean that the company’s governance cannot indefinitely leave the capital ledger unresolved.
For a SARL, the full-payment rule has an additional financing consequence. Before a new subscription of cash parts, the existing capital must be fully released, otherwise the operation risks nullity under Article L223-7. A foreign parent company planning a second funding round should therefore check whether the first capital was fully paid before drafting a capital increase. A shareholder loan may be a different financing instrument, but it does not silently transform an unpaid capital subscription into a loan. The contracts, accounting entries and corporate approvals must say what each transfer is intended to accomplish.
The five-year period also interacts with corporate distress. Article L624-20 of the Commercial Code states: « Le jugement d’ouverture rend immédiatement exigible le montant non libéré du capital social. » The official provision is available in Article L624-20 of the Commercial Code. In plain language, the opening judgment for insolvency makes the unpaid capital balance immediately due. A founder who planned to pay gradually may therefore face an accelerated demand when the company enters insolvency proceedings.
This rule is one reason to treat an unpaid balance as a liquidity risk in the financial plan. If the French company has adequate cash and the founder is solvent, the issue may be regularized through an ordinary call and a documented transfer. If the company is already unable to pay debts, the same balance may be demanded by the insolvency practitioner at a time when the founder is also dealing with foreign exchange restrictions, an overseas bank or a parent-company approval process. The five-year ceiling should not be used as a reason to postpone all documentation or cash planning.
The French tax administration’s official portal, impots.gouv.fr, and the INPI formalities materials can help separate the corporate filing from tax and accounting obligations. Paying capital is not the same as paying corporate income tax, value-added tax or social contributions. Those liabilities follow their own events and deadlines. A foreign founder should ask the company’s accountant to reconcile the capital ledger with the bank statement rather than infer the position from a tax payment or an invoice.
II. What can happen if the balance remains unpaid, and how should the file be regularized?
A. Can the company demand payment, interest and proof of which transfer covered the capital?
The company can call the unpaid balance in accordance with the law and its articles. A practical call should identify the shareholder, the subscription date, the number and class of shares or parts, the amount already released, the balance requested, the bank details of the company or depositary, the payment deadline and the documents to send after payment. If the shareholder is abroad, the notice should also state whether the bank will accept a transfer from an account held by a related company and what payment reference is required. A clear notice reduces the risk that a later transfer will be booked as a loan or a general operating advance.
The interest rules are not merely contractual. Article 1843-3 makes the shareholder a debtor of the promised contribution and refers to interest from the date on which the sum should have been paid. Article 1344-1 of the Civil Code states: « La mise en demeure de payer une obligation de somme d’argent fait courir l’intérêt moratoire, au taux légal, sans que le créancier soit tenu de justifier d’un préjudice. » The official source is Article 1344-1 of the Civil Code. A mise en demeure is a formal demand to pay. It should be prepared with care because the date and content can affect the interest calculation and the evidence of default.
Article 1231-6 of the Civil Code adds that damages for late payment of a monetary obligation consist of legal interest from the formal demand, without requiring the creditor to prove a loss, while allowing separate damages for an independent loss caused by bad faith. See Article 1231-6 of the Civil Code. The company should not threaten a foreign founder with an undefined penalty. It should state the legal basis, the principal amount, the date due and the consequences that are actually being claimed.
Evidence becomes decisive when a founder has sent several transfers. A transfer from a personal foreign account may have been intended to release capital, pay an invoice, fund expenses or make a shareholder loan. The payment reference, the receiving account, the accounting entry and the corporate documents should tell the same story. If the transfer uses a different currency, retain the bank’s credited amount in euros, not only the amount debited in the foreign currency. If an intermediary bank changes the reference, retain the originating payment instruction and the final credit advice.
A decision of the Commercial Court of Castres dated 4 May 2026, no. 2025000661, illustrates the point. The decision is available through the official Cour de cassation decision source. In that case, the court recorded: « Le certificat de dépôt de fonds délivré le 26 avril 2019 par la société générale atteste de versements pour partie de la libération du capital en numéraire par les trois actionnaires Messieurs [P] [U], [L] et [Q], mais pas de versement par Madame [O] [R]. » The decision then examined transfers attributed to the fourth shareholder and found that the payment descriptions did not establish that they were intended to release her capital. The lesson for a foreign founder is practical: a bank transfer is not self-proving if its purpose cannot be connected to the subscription.
The same decision states, in the court’s own wording: « Madame [O] [R] fournit divers relevés bancaires faisant état de plusieurs virements de sa part sur le compte de la Société Habitat Bois Occitanie pour un montant de 32 360 euros, mais le libellé d’aucun de ces virements sur les relevés de compte de la société HBO et de Madame [O] [R] ne mentionne que ce virement est destiné à la libération du capital de la société HBO par Madame [O] [R], les mentions « pour HBO » ou « interne » à propos d’un virement de 13.000 euros en date du 19 août 2019 ne suffisant pas à caractériser l’affectation des sommes ainsi versées. » This is a warning against relying on a vague description such as “for the company”. A founder should use a precise reference such as “release of subscribed cash capital – [company name] – [shareholder name]”, subject to the instructions of the receiving bank and accountant.
An unpaid capital balance should also be distinguished from a shareholder current-account balance. A current account is a claim that a shareholder may have against the company after advancing funds. It is not automatically the same as the shareholder’s debt to pay subscribed capital. In a Commercial Chamber decision of 18 January 2000, no. 97-14.362, the Cour de cassation held, in the verified passage: « Mais attendu que l’arrêt retient que les créances de MM. Z… et Y… constituées par les soldes créditeurs des comptes courants ouverts à leurs noms dans les livres des sociétés étaient nées des prêts consentis à celles-ci, tandis que leurs dettes envers lesdites sociétés dérivaient des contrats de société par lesquels ils s’étaient obligés à libérer leurs apports en numéraire, ce dont il résulte qu’il n’y avait pas connexité entre ces créances et ces dettes ; » The exact decision and official link are available at Cour de cassation, Commercial Chamber, 18 January 2000, no. 97-14.362.
That decision does not mean that every shareholder current-account arrangement is unusable. It means that a founder must not assume that a loan claim can be set off against an unpaid capital call without a legally valid analysis and the required corporate and accounting treatment. If the foreign parent transferred money under a shareholder-loan agreement, that agreement should remain identifiable. If the shareholders want to convert a loan into capital, the conversion should be structured as a capital transaction with the necessary approvals, subscription documents and filings, rather than described retrospectively as if the original loan had always been capital.
The company’s director also needs a measured assessment of risk. The president of an SAS or the manager of a SARL may have to organize the call, keep the capital ledger accurate and preserve the payment evidence. A failure to manage the corporate process can expose the company to a court application under Article 1843-3 and can become relevant in an insolvency or shareholder dispute. It does not automatically make the director personally liable for every unpaid contribution. Personal liability usually depends on the legal basis of the claim, the director’s conduct, the loss and the causal connection. A demand letter should therefore identify the company’s claim against the shareholder without making an unsupported personal accusation against the director.
One older Commercial Chamber decision shows why the identity of the claimant matters. On 12 October 2004, in no. 03-14.909, the Cour de cassation stated in a verified passage: « Attendu que le commissaire à l’exécution du plan, qui ne représente pas le débiteur, ne peut pas se substituer aux organes légaux de la société pour exiger d’un associé qu’il libère ses apports ; qu’en cas de cession totale des actifs de la société, cette demande incombe à son liquidateur amiable ou à un mandataire ad hoc ; » The decision is available at Cour de cassation, Commercial Chamber, 12 October 2004, no. 03-14.909. The case does not excuse non-payment. It explains that the party entitled to pursue the release must have the correct legal capacity.
For a cross-border file, the demand should be sent in a way that can be proved in the founder’s country as well as in France. Email may be useful for speed, but the company should also consider a formal delivery method that records the recipient, date and contents. The notice can attach the subscription form, a ledger statement, the relevant statutory clause and the bank instructions. If the shareholder disputes the amount, the company should invite a reconciliation of the documents rather than mix the capital claim with unrelated invoices or parent-company funding.
B. What should a foreign founder do before the deadline or after a missed call?
The safest approach is to treat the unpaid balance as a project with a closing file. Before the five-year deadline, the founder should request the following documents from the company:
- The signed articles of association and any later amendment that changed the capital or the shareholder identity.
- The subscription forms identifying the shares or parts and the amount promised by each shareholder.
- The depositary certificate and the bank statement showing what was credited at incorporation.
- The capital ledger, with the amount subscribed, the amount released and the balance still due for every shareholder.
- Every call for payment, corporate resolution and notice of the deadline.
- Transfer orders, account statements and credit advices matching each instalment to the shareholder and the company.
- The company’s accounting entries, including any shareholder current-account or parent-company loan entry that could otherwise be confused with capital.
- The registration documents filed through the one-stop portal and the current Kbis or equivalent company extract.
The founder should then reconcile three amounts: the subscription obligation in the legal documents, the amount accepted by the company as released and the balance shown by the accounting records. If those amounts differ, the issue should be resolved before a new investment round, a distribution of profits, a sale of shares or a refinancing. A foreign founder should also check whether the sending bank requires a purpose code, supporting documents or a prior foreign-exchange declaration. Those banking questions are distinct from the French company-law obligation, but they can delay the payment that satisfies it.
If a call has already been received, do not answer by sending an unexplained transfer. Ask the company to confirm the exact amount, recipient account, payment reference and accounting treatment. Pay from the account named in the notice where possible. If a related foreign company must pay for commercial reasons, obtain written instructions and a legal review before remitting; the payment may otherwise create a new shareholder-loan or contribution issue instead of releasing the founder’s personal subscription.
After payment, request a written acknowledgment stating the date received, amount in euros, shareholder concerned, subscription concerned and remaining balance. Keep the bank evidence with the acknowledgment. If the company’s articles or the transaction require an update to the corporate records or a filing, the manager or president should complete it through the official formalities process. The Kbis is an extract, not a replacement for the full internal corporate file, so a founder should preserve the resolutions and accounting evidence even after the public extract has been updated.
If the five-year deadline has passed without a proper call, the company should not simply erase the unpaid amount. It should obtain advice on the validity of the calls, the limitation issues, the interest calculation and the appropriate corporate action. Article 1843-3 provides the emergency court mechanism when legally required calls have not been made, including the possibility of an order under a daily penalty or the appointment of a representative. The correct application depends on the company form, the articles, the dates and the person seeking relief.
If the company is in insolvency proceedings, the timing becomes more severe. Article L624-20 makes the unpaid capital immediately due once the opening judgment is made. The insolvency practitioner may request payment for the benefit of the company’s creditors, but the identity and capacity of the claimant must be checked in light of the procedural stage. The 2004 Commercial Chamber decision cited above is relevant because it shows that a person involved in a restructuring process cannot automatically replace the company’s legal organs or the appropriate liquidator. A foreign founder should respond quickly, preserve proof of payments and obtain a French-law analysis of the insolvency notice rather than rely only on a foreign accountant’s description.
There is also a governance question for a French director who is not the shareholder. The director should maintain a calendar showing the date of registration, the five-year final date, the planned calls and the funds received. The director should ensure that the company does not report a capital payment that the bank cannot support. If a shareholder refuses to pay, the director should record the decision to call the balance, send the notice and account for the debt. Silence can create a poor record, particularly if the company later asks a court to appoint a representative or enters insolvency.
For a foreign founder, a short bilingual working file can be useful, even though the article and corporate documents may be prepared in French. The English index can identify “subscription”, “release of capital”, “call for payment”, “depositary certificate”, “articles of association”, “shareholder current account” and “insolvency opening judgment”. The French documents should remain the controlling documents. Machine translation should not be used to change a payment reference, a shareholder resolution or a court response without a professional review.
The commercial decision is not always to pay the entire balance immediately. An SAS or SARL may have a legitimate reason to leave the permitted portion unpaid while the business tests the market. The decision should be made consciously, with the five-year date in the cash forecast and with a plan for a bank request, a new cash subscription or a possible insolvency scenario. A foreign parent that wants to keep flexibility may prefer a carefully documented loan, but that is a financing choice with its own terms, repayment priority, interest and tax consequences. It should not be disguised as an incomplete capital release.
Finally, founders should not confuse an unpaid capital balance with the company’s general inability to pay its debts. The balance is an asset or claim of the company against the shareholder. It does not by itself prove insolvency, and paying it does not automatically cure other unpaid debts. The director, the shareholder and the accountant should map both positions separately: capital obligation, shareholder funding, supplier debt, tax debt, employee liabilities and bank debt. That separation makes the legal response clearer and gives a foreign founder a better chance of complying on time.
Conclusion
A foreign founder can generally defer part of a French cash-capital contribution, but the deferral is limited and documented. In an SAS, at least half of the cash subscription must be released at formation; in a SARL, at least one fifth. The remaining balance must be called and paid within five years of registration. The shareholder remains a debtor of the company, interest can arise, and an insolvency opening judgment makes the unpaid capital immediately due. The company must also be able to prove which transfer released which subscription.
The practical answer is a controlled evidence file: articles of association, subscription forms, depositary certificate, transfer references, euro credit evidence, corporate calls, ledger entries and written acknowledgments. A current-account loan is not automatically a substitute for capital. If the deadline, payment or claimant is disputed, the company and founder should resolve the record promptly, with particular care when the founder, bank or parent company is outside France.
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