Capital contributions lawyer Paris: cash, in kind, skills, valuation.

A cash contribution is a payment of money to the company. It feeds the share capital directly. A contribution in kind is the transfer of an asset (building, business, patent, equipment) whose value is included in the share capital. A contribution of skills is the provision of know-how, work or expertise. It does not count towards the share capital (Article 1843-2 of the French Civil Code) but gives entitlement to profit-sharing shares.

There is no legal minimum for an SAS, an SARL, an SASU or an EURL: the share capital may be set at a symbolic €1. An SA requires share capital of at least €37,000 (Article L. 224-2 of the French Commercial Code). Share capital that is too low can weaken credibility with banks and suppliers. Overvalued share capital can become difficult to pay up in cash within the legal time limits.

No. For an SARL (Article L. 223-9 of the French Commercial Code) and an SAS (Article L. 227-1, paragraph 6), the future shareholders may decide unanimously to dispense with one if no contribution in kind exceeds €30,000 and if the total value of unvalued contributions in kind does not exceed half of the share capital. For an SA (Article L. 225-8), the auditor is mandatory, with no exemption possible.

There are two cumulative conditions, set out in Article L. 223-9 of the French Commercial Code for the SARL and in Article L. 227-1, paragraph 6, for the SAS. First, no contribution in kind taken individually may exceed €30,000. Second, the total value of the contributions in kind not subject to valuation may not exceed half of the share capital. The decision to dispense with an auditor must be taken unanimously by the future shareholders and expressly recorded.

Yes. For an SARL, at least one fifth must be paid up on incorporation, and the balance within five years of registration (Article L. 223-7 of the French Commercial Code). For an SAS, at least half must be paid up immediately, and the balance within the same time limit. The schedule for calling the balance must be set by the company's director. If it is not called within the legal time limit, any interested party may apply to the president of the court.

A capital contribution feeds the shareholder's share and determines their commercial liability. It is in principle inalienable except in the cases provided by law. A shareholder current account is a loan granted by the shareholder to the company, which may bear interest and remains repayable at any time, unless the articles of association provide otherwise or a lock-in agreement applies. It finances cash flow without diluting the shareholding.

Towards third parties, where there is no contributions auditor or where the value adopted differs from the one proposed by the auditor, the shareholders are jointly and severally liable for five years for the value attributed (Articles L. 223-9 and L. 227-1, paragraph 7, of the French Commercial Code). The Court of Cassation, in Cass. com., 12 May 2021, No. 20-12.670 (published in the Bulletin), clarified that this rule, which comes from the Law of 9 December 2016, applies only to articles of association signed on or after 11 December 2016.

Yes. For the SA and the SAS, Article L. 242-2 of the French Commercial Code criminally penalises any person who fraudulently causes a contribution in kind to be given a value above its real value. This offence exposes the offender to criminal penalties and to civil damages. Appointing an independent contributions auditor is the best prevention.

Contributing a business follows formalities close to those of a sale. A written deed is required, the creditors of the business may lodge an opposition within ten days, and the contribution must be published in a legal notices newspaper and then in the BODACC. The transaction is in principle subject to registration duties. A contributions auditor's report is needed as soon as the transaction exceeds the exemption thresholds.

That is the principle: in the absence of a clause in the articles of association or of a specific agreement, the shareholder who is the creditor may ask for repayment of their current account at any time, under the ordinary law of loans. There are three exceptions: a written lock-in agreement, a clause in the articles of association providing for another arrangement, or the opening of insolvency proceedings, which suspends the due date. An untimely repayment demand can push the company into cessation of payments.

Under a community property regime, contributing a community asset or community funds requires notice to the spouse, who may claim the status of shareholder for half of the shares (Article 1832-2 of the French Civil Code). For contributions of community buildings or businesses, the spouse's express consent is required. A written waiver of the status of shareholder must be obtained before the articles of association are signed.

An SAS may issue inalienable shares resulting from contributions of skills (Article L. 227-1, paragraph 4, of the French Commercial Code). The terms of subscription and allocation are set by the articles of association. A contribution of skills remains marginal: know-how is more often remunerated through an employment contract, a services agreement or founder share warrants (BSPCE), which are simpler to organise and to unwind on an exit.

By unanimous agreement of the future shareholders. Failing that, the most diligent future shareholder may apply by petition to the president of the commercial court of the planned registered office to have an auditor appointed. The auditor must be on the list of statutory auditors. The auditor delivers a report, annexed to the articles of association, which describes each contribution, the valuation methods used and the proposed value.

Fees are freely set and depend on the complexity of the matter (nature and number of assets contributed, valuation method, any expert opinion, size of the company). For a simple contribution below €100,000, the budget is generally between €1,500 and €3,500 excl. VAT. For a contribution of a business or a building, allow €3,000 to €8,000 excl. VAT depending on the documents to be analysed.

The share premium is the portion of the issue price above the par value of a share. It absorbs the difference between the company's economic value and its par value. It avoids excessive dilution of the existing shareholders when an investor comes in. It is recorded in a separate reserve account and remains available to absorb losses or to be incorporated into the share capital.