Your French société par actions simplifiée (SAS, the flexible French joint-stock company favoured by foreign founders) is running out of cash, and you live in London, New York, Dubai or Singapore. The French bank will not extend the overdraft, the German parent company is ready to wire 200,000 euros, and your French accountant tells you that you have three options: increase the share capital, call up the part of the capital that was never paid in, or simply lend the money to the company. Each route moves money into the business, but they do not move the risk to the same place, they do not cost the same in fees and tax, and they do not follow the same procedure. This article explains, for a foreign shareholder running a French SAS from abroad, how each route works under French statute and case law, with the exact provisions quoted so you can verify every decisive statement against its official source. The first part walks through the three funding routes in practical order: voting and filing a cash capital increase from outside France, with its preferential subscription right, its price rules, its eight-day deposit and its new Kbis company identity extract; then calling up unpaid capital or lending through a shareholder current account instead. The second part maps what goes wrong in real files: dilution fights between shareholders, blocked filings at the online registry, and the tax reassessment that follows money that was poorly documented. French acronyms are explained as they appear: the Registre du commerce et des sociétés (RCS, the trade and companies register kept by the greffe, the registry office of the commercial court), the Kbis extract (the official identity card of a French company), the Institut national de la propriété industrielle (INPI, which operates the guichet unique, the single online filing desk), the Bulletin officiel des annonces civiles et commerciales (BODACC, the official gazette where company events become visible to third parties), and the droit préférentiel de souscription (DPS, the preferential right of existing shareholders to subscribe to new shares first). If you have not yet chosen your French vehicle, read first our guide to choosing between a SAS, a SARL, a SASU and a branch and our step-by-step guide to setting up a company in France as a foreign founder, which cover the bank account, the first Kbis, VAT and the first hire.
I. How to put cash into your French SAS from abroad: increase, call up or lend
A. Vote and file a cash capital increase from abroad: collective decision, preferential rights, deposit and new Kbis
A capital increase in a SAS is a collective decision of the shareholders, even when the foreign parent holds 100 percent of the shares. French statute leaves SAS shareholders free to organise most decisions in the articles (statuts), but it draws a hard line for capital operations. Article L.227-9 of the Commercial Code provides that “les attributions dévolues aux assemblées générales extraordinaires et ordinaires des sociétés anonymes, en matière d’augmentation, d’amortissement ou de réduction de capital, de fusion, de scission, de dissolution, de transformation en une société d’une autre forme, de nomination de commissaires aux comptes, de comptes annuels et de bénéfices sont, dans les conditions prévues par les statuts, exercées collectivement par les associés” — the powers of extraordinary and ordinary general meetings regarding increases, amortisation or reductions of capital, mergers, demergers, dissolution, changes of corporate form, appointment of statutory auditors, annual accounts and profits are exercised collectively by the shareholders under the conditions laid down in the articles. The foreign shareholder therefore cannot recapitalise the French SAS by a simple instruction letter from headquarters: there must be a formal collective decision — an extraordinary general meeting recorded in minutes, or, in a one-shareholder SAS (SASU), a written decision of the sole shareholder entered in the statutory register. The same article adds, for the SASU, that “L’associé unique ne peut déléguer ses pouvoirs. Ses décisions sont répertoriées dans un registre.” The sole shareholder may not delegate these powers, and each decision must be recorded in a register. From abroad, this means organising a video meeting whose minutes you sign electronically, or signing a sole-shareholder decision and keeping it in the company’s register in France; your French counsel or accountant can hold the register, but the decision itself must exist in proper form before anything is filed.
Behind the SAS-specific rule sits the general machinery of French company law, because the SAS borrows most of its capital rules from the law of the société anonyme (SA, the classic French public limited company). Article L.227-1 of the Commercial Code states that “Dans la mesure où elles sont compatibles avec les dispositions particulières prévues par le présent chapitre, les règles concernant les sociétés anonymes” — to the extent compatible with the special SAS provisions, the rules governing the SA — apply to the SAS, subject to a list of excluded articles that does not include the capital-increase provisions. The core competence rule therefore applies directly: article L.225-129 of the Commercial Code provides that “L’assemblée générale extraordinaire est seule compétente pour décider, sur le rapport du conseil d’administration ou du directoire, une augmentation de capital immédiate ou à terme.” Only the extraordinary general meeting, acting on the report of the board (in a SAS, the report of the president), may decide an immediate or deferred capital increase. In practice the president of your SAS prepares a short written report explaining why the company needs the money, how many new shares will be created, at what price, and what will happen to shareholders who do not subscribe; the shareholders vote on that basis, and the minutes record the new total capital and the amended article of the statuts stating the capital amount.
Two timing rules frame the operation, and both carry official deadlines you should diary before wiring a single euro. First, the increase must be completed promptly once voted: article L.225-129 of the Commercial Code continues that “L’augmentation de capital doit, sous réserve des dispositions prévues aux articles L. 225-129-2 et L. 225-138 , être réalisée dans le délai de cinq ans à compter de cette décision ou de cette délégation.” The increase must be carried out within five years of the decision or delegation. Second, the shareholders may authorise the president to execute the increase later rather than fixing every detail on voting day, but that delegation is capped: article L.225-129-2 of the Commercial Code requires that the meeting set the period during which the delegation may be used, and that “elle fixe la durée, qui ne peut excéder vingt-six mois, durant laquelle cette délégation peut être utilisée et le plafond global de cette augmentation” — it fixes the duration, which may not exceed twenty-six months, and the overall ceiling of the increase. When the president later uses that authorisation, he must document the final terms precisely, because article R.225-116 of the Commercial Code provides that “le conseil d’administration, ou le directoire, établit, au moment où il est fait usage de l’autorisation, un rapport complémentaire décrivant les conditions définitives de l’opération établies conformément à l’autorisation donnée par l’assemblée” — the board draws up, when the authorisation is used, a supplementary report describing the final terms of the transaction as fixed under the meeting’s authorisation. For a foreign shareholder this delegation mechanism is the practical tool that avoids a second round trip of signatures: vote once in year one, authorise the president to call the funds within twenty-six months up to a ceiling, and execute each draw with a short supplementary report.
The most sensitive question in any multi-shareholder SAS is who gets the new shares. French law starts from a protective default: existing shareholders come first. Article L.225-132 of the Commercial Code provides that “Les actions comportent un droit préférentiel de souscription aux augmentations de capital.” Shares carry a preferential subscription right to capital increases. It continues: “Les actionnaires ont, proportionnellement au montant de leurs actions, un droit de préférence à la souscription des actions de numéraire émises pour réaliser une augmentation de capital.” Shareholders have, in proportion to their shareholding, a preferential right to subscribe to the cash shares issued for the increase. Each shareholder may waive this right individually, but the company cannot simply ignore a shareholder who wants to follow the money and keep its percentage. The official business-registration guidance confirms the timetable: for exercising their preferential right, shareholders have a period that may not be shorter than five trading days, and the meeting — or the president acting under delegation — may set a longer one (see the official procedure sheet Augmenter le capital social de la société on the public enterprise service). If the foreign parent wants to take the whole increase alone, the minority must therefore either waive its right in writing or be regularly offered the chance to subscribe and decline; files where the majority skipped this step are the files that end in court, as the second part of this guide shows.
Sometimes the whole point of the operation is to bring in a newcomer — the foreign parent itself, a new investor, a key manager — and the existing preferential right stands in the way. The meeting that decides or authorises the increase may remove it, but only through a formal, reasoned procedure. Article L.225-135 of the Commercial Code provides that the meeting “peut supprimer le droit préférentiel de souscription pour la totalité de l’augmentation de capital ou pour une ou plusieurs tranches de cette augmentation” — may remove the preferential subscription right for all or part of the increase — under the detailed conditions of the following articles, and that “Elle statue sur rapport du conseil d’administration ou du directoire.” It acts on the report of the board. Where the meeting fixes the terms itself, it also acts on the report of the statutory auditor (commissaire aux comptes, the independent auditor who certifies company accounts), if one exists. The price of the new shares then becomes the central protection for the shareholders who are set aside: the issue price, usually split between nominal value and share premium (prime d’émission, the extra amount paid above nominal value that goes to reserves), must be justified in the reports, and the auditor verifies that the terms comply with the authorisation given. A foreign parent injecting funds at a symbolic price while wiping out the French minority partner is precisely the pattern French courts punish; the price must reflect genuine company value, documented before the vote, not decided afterwards in London or Delaware.
Once voted, the money must actually arrive and be frozen for verification. Cash contributions (apports en numéraire) are deposited — with a bank, a notary, or a designated escrow account — and the depositary issues a certificate (certificat du dépositaire) proving the funds are blocked for the company. The official procedure sheet states the rule plainly: funds paid by way of contribution must be deposited within eight days of receipt, with a notary or in a dedicated bank account (see Augmenter le capital social de la société). For a foreign shareholder wiring euros from a London or US account, the practical chain is therefore: transfer the subscription amount to the French company’s dedicated increase account or the notary’s escrow, obtain the depositary certificate in the exact name of the subscribing entity, and keep the SWIFT confirmation stapled to the certificate in case the registry or a future auditor asks where the money came from. Contributions in kind (apports en nature) — machinery, patents, a business — follow a stricter track: article L.225-147 of the Commercial Code requires that “un ou plusieurs commissaires aux apports sont désignés à l’unanimité des actionnaires ou, à défaut, par décision de justice” — one or more contribution auditors are appointed unanimously by the shareholders or, failing that, by court order — to value the assets under their own responsibility, and article L.225-10 of the Commercial Code adds that when the meeting votes on an in-kind contribution, “les actions de l’apporteur ou du bénéficiaire ne sont pas prises en compte pour le calcul de la majorité” — the contributor’s shares are disregarded for the majority count, and the contributor may not vote, even by proxy. A foreign parent contributing its own patent portfolio to the French SAS therefore cannot vote its shares on the valuation of its own patents.
The final stretch is publicity and registration, and it is here that foreign files most often stall. The capital change amends the statuts, and any amended mention must be published: article R.210-9 of the Commercial Code provides that “la modification intervenue est publiée dans les conditions prévues à l’article R. 210-3” — the change is published under the conditions of article R.210-3 — which means a notice in a legal announcements gazette (support d’annonces légales, the authorised press outlet for company notices), followed by automatic insertion in the BODACC, which the official guidance describes as the step that makes the increase enforceable against third parties (see Augmenter le capital social de la société and the companion sheet Modifier les statuts de la société). The file — amended articles, minutes, depositary certificate, contribution auditor’s report where applicable, gazette publication certificate — is then submitted through the guichet unique, and the greffe updates the RCS and issues a new Kbis showing the new capital. Only at that point may the blocked funds be released to the company. If the online desk rejects the file, which happens regularly on capital operations with foreign documents, our guide to fixing a rejected guichet unique filing from abroad explains the correction circuit step by step. Do not skip the publication step to save a few hundred euros: an unpublished increase exists between the parties but cannot be relied on against third parties, and banks, lessors and the RCS reader all check the Kbis first.
B. Call up the unpaid half of your capital or lend to the company instead: balance calls, current accounts and consent
Before voting a full increase, check what your SAS already owes you — or rather, what you still owe it. French law does not require founders to pay the whole cash capital on day one. Article L.225-3 of the Commercial Code opens with the principle that “Le capital doit être intégralement souscrit.” The capital must be fully subscribed. It then sets the minimum cash payment: “Les actions de numéraire sont libérées, lors de la souscription, de la moitié au moins de leur valeur nominale.” Cash shares are paid up, at subscription, to at least half of their nominal value. The balance is not optional and not eternal: it is released “dans un délai qui ne peut excéder cinq ans à compter de l’immatriculation de la société au registre du commerce et des sociétés” — within a period not exceeding five years from the company’s RCS registration — in one or more calls decided by the board or, in a SAS, by the president under the articles. In plain terms, if your French SAS was incorporated with 100,000 euros of capital and only 50,000 paid in, the company holds a 50,000-euro claim against its shareholders that the president can call at any time within five years. Calling that unpaid balance (libération du surplus) is often the fastest way to fund the company from abroad: no new shares, no preferential right puzzle, no price debate, just a formal call for funds (appel de fonds), payment to the company account, and a depositary certificate for the file. Diary the five-year date at incorporation: an uncalled balance that lingers past the deadline is an irregularity that auditors flag, buyers discount, and opponents exploit in shareholder disputes.
The third route — lending the money instead of subscribing it — is the one foreign groups use most, and the one French auditors examine most closely. A shareholder loan, known in France as an apport en compte courant d’associé (shareholder current-account advance), is a debt of the company to its shareholder: it arrives in days with a simple loan agreement, it can bear interest, and it can in principle be repaid when the company recovers. Our guide to funding your French subsidiary by shareholder loan from abroad details the interest, tax-deduction and repayment rules, including the thin-capitalisation limits and the withholding tax on cross-border interest. Three warnings from that guide matter here. First, interest must be set at a defensible market rate and documented before the money moves; interest invented after the fact looks like disguised profit. Second, repayment must remain possible without hollowing out the company: a loan recalled brutally while the SAS cannot pay its suppliers invites the very liability proceedings directors fear, and in distressed situations courts re-examine whether the “loan” was really rescue equity that should have been subordinated. Third, blocking agreements (conventions de blocage, undertakings not to demand repayment before a date) reassure banks and auditors but bind the foreign lender’s hands; sign them with open eyes and a calendar.
Choosing between the three routes is therefore a matrix, not a reflex. A capital increase strengthens the balance sheet permanently, pleases banks and landlords who read the Kbis, and costs publication and registration fees plus auditor fees where applicable; it dilutes anyone who does not follow, and it cannot be undone by a simple repayment. A balance call injects cash without dilution and without a full increase procedure, but it only works up to the unpaid amount and within the five-year window. A shareholder loan is fast, flexible and repayable, but it leaves the company indebted, its interest is scrutinised, and in a downturn it may be treated as the symptom of under-capitalisation rather than its cure. One statutory guardrail governs every reshuffle that increases what a shareholder must pay: article 1836 of the Civil Code provides that “En aucun cas, les engagements d’un associé ne peuvent être augmentés sans le consentement de celui-ci.” Under no circumstances may a shareholder’s obligations be increased without its consent. A majority cannot vote that the minority will pay more, guarantee more, or lend more; each shareholder signs its own subscription form (bulletin de souscription) for the new shares it takes, and no one subscribes for anyone else. For the foreign parent this rule cuts both ways: headquarters cannot be forced to inject beyond its commitment, but neither can it force the French minority partner to follow an increase it never agreed to fund — which leads directly to the disputes mapped in the second part.
II. What can go wrong: dilution fights, blocked filings and tax challenges
A. Dilution, DPS removal and the rescue recapitalisation: when minority shareholders attack the increase
Every capital increase that is not followed by everyone reshuffles power, and French courts see the same three attack patterns against increases in SAS companies. The first pattern is the increase with removal of the preferential right that sidelines the minority at a friendly price. The meeting can remove the right, as shown above, but the removal must be voted properly, on proper reports, at a justified price — and minorities sue when any link is missing. A Paris appeal ruling illustrates both the claim and the court’s answer: in a SAS where the shareholders had revoked one president and appointed another, then voted “la réalisation d’une augmentation de capital d’un million d’euros avec intégration d’une prime d’émission réservée à la société Financière de Rennes et la suppression du droit préférentiel de souscription des associés ont été adoptées à la majorité requise du tiers des droits de vote des associés présents ou représentés” — the one-million-euro increase with a share premium reserved to one company and the removal of the preferential right were adopted by the required majority of one-third of the votes of shareholders present or represented — while 54 percent of the votes cast opposed the deal (see Paris Court of Appeal, Pôle 5, chamber 8, 4 April 2023, no. 22/05320). The outvoted shareholders sued for annulment, arguing fraud on their rights and abuse of the articles; the commercial court dismissed the claim, and the court of appeal confirmed the dismissal. The lesson for a foreign majority is not that minorities always lose — it is that the majority won because the procedure had been followed: a convened meeting, the required majority threshold met, reports on record, and a premium justified in the file. Where the price is symbolic, the reports absent, or the minority never properly convened, the same courts annul.
The second pattern is the rescue recapitalisation known as the coup d’accordéon — the accordion squeeze: reduce the capital to zero to wipe out past losses, then immediately increase it, so that shareholders who cannot or will not put in fresh money disappear from the register. The Cour de cassation, the French supreme court for civil and commercial matters, polices this technique strictly. In a 2023 SAS case where an extraordinary meeting had voted a reduction of the capital to zero followed by an increase with the preferential right maintained, the supreme court held that “la résolution décidant de la réduction à zéro du capital de la société ne pouvait, sauf à priver cette société de tout capital, légalement produire effet” — the resolution reducing the company’s capital to zero could not legally take effect, since it would deprive the company of any capital at all — and it quashed the appeal ruling that had treated the squeezed-out shareholder as no longer a shareholder on the date he filed his annulment action (see Cass. com., 4 January 2023, nos. 21-10.609 and 21-12.515). The squeezed shareholder kept his standing to sue precisely because the zero-reduction was legally ineffective. For a foreign parent tempted to clean a loss-making French SAS with an accordion before selling or refinancing, the message is blunt: the technique exists, but each step must independently survive judicial review, the zero phase is fragile, and shareholders wiped out on paper keep their day in court.
The third pattern is abuse of majority and abuse of minority around the vote itself: the majority forcing through a useless or predatory increase, or the minority blocking a vital rescue increase to extract a buyout price. French courts examine the purpose of the increase against the company’s interest, the equality of shareholders, and the reality of the vote. Defensive drafting from abroad therefore means: convene strictly under the articles (form, notice, information), keep the president’s report and, where the preferential right is removed, the auditor’s report in the file, justify the issue price with contemporaneous valuation material, record individual waivers of preferential rights in writing, and minute the exact new capital and amended articles. A file with these five elements survives a minority attack; a file with a one-page minute and a wire transfer does not. And where the SAS articles require specific majorities or specific information for capital decisions, follow the articles to the letter: the SAS is a contract-first company, and judges enforce the contract the shareholders wrote.
B. Rejected filing, frozen funds and tax reassessment: unblock the registry and defend the money trail
Even a perfectly voted increase produces nothing until it is published and registered, and the registry stage is where foreign files stall. The guichet unique examines the full bundle — amended statuts, minutes, subscription forms, depositary certificate, contribution auditor’s report for in-kind items, legal-announcement publication certificate — and rejects incomplete or inconsistent files: a subscriber name that differs by one letter between the wire, the certificate and the minutes; a foreign parent identified without its registration number and legal form; a translation missing where the officer requires one; a publication notice that omits the new capital figure. While the file pends, the subscribed funds stay blocked and the Kbis still shows the old capital, which means the bank will not count the money as equity and the landlord reading the Kbis sees the old figure. The fix is mechanical rather than legal: correct the discrepancy, re-file, and track the RCS update until the new Kbis arrives, following the method in our guide to fixing a rejected guichet unique filing from abroad. Budget the full chain before announcing the increase to a bank or a contracting partner: gazette publication fees, registry fees, notary or bank depositary fees, auditor fees for in-kind contributions, and translation and legalisation costs for foreign corporate documents. An increase announced to a lender as completed when it is merely voted is a credibility accident waiting for the Kbis check.
The tax administration reads capital movements with different glasses from the registry, and three reassessment tracks recur in foreign-owned SAS files. First, money that arrives without papers is recharacterised: an undocumented shareholder advance can be treated as taxable income of the company or, when the manager benefits, as a deemed distribution to the individual, taxed in his hands with penalties. Our guide to the personal tax bill that follows a company audit explains how a French company audit spills over onto the foreign-based director through deemed dividends and the 1.25 multiplier applied to distributed income. Second, cross-border payments have their own withholding logic: dividends paid by the French SAS to its foreign parent may bear French withholding tax, subject to treaty relief and reclaim procedures detailed in our guide to dividends paid abroad, while interest on shareholder loans must survive deductibility caps and transfer-pricing review. Third, the price of the new shares can itself be challenged where the operation shifts value across borders at an undervalue: a symbolic issue price that wipes out a French minority while the foreign parent takes the company for cents invites both annulment suits and valuation disputes with the administration. The common defence across all three tracks is paperwork made before the money moves: a dated subscription or loan agreement stating amount, price, interest, repayment terms and governing law; a bank trail from the foreign lender to the dedicated French account matching the depositary certificate to the euro; board and meeting reports justifying the price; and consistent accounting entries from day one. Judges and auditors forgive thin files slowly; they respect complete ones quickly.
Conclusion
Funding a French SAS from abroad is a choice between three instruments with three different signatures: the capital increase, voted collectively and published in the gazette and the RCS, which cements the money as equity and shows it on the Kbis; the call of unpaid capital, available within five years of registration and free of dilution mechanics, which converts an existing shareholder debt into cash; and the shareholder loan, fast and repayable, which keeps the company indebted and under the auditor’s lens. The increase rewards shareholders who do their paperwork — collective decision recorded under article L.227-9, reports that justify price and removal of preferential rights, subscription forms signed individually under article 1836, funds deposited within days and certified, publication that makes the new capital enforceable, and a fresh Kbis that proves it. It punishes shortcuts — skipped preferential rights, symbolic prices, missing reports, unpublished minutes — with annulment suits in which squeezed shareholders keep standing, as the Cour de cassation confirmed in January 2023, and with blocked funds and stale Kbis extracts that banks discount. Map your route before wiring: if the goal is permanent equity that impresses lenders, vote the increase; if subscribed capital remains unpaid, call it first; if the need is bridge cash, lend it with a real agreement and a market rate. In each case, build the file as if a minority shareholder and a tax auditor will read it together — because in the files that go wrong, they do.