Share capital lawyer in Paris: increase, reduce or restructure without weakening the shareholders.

An increase raises the share capital by creating new shares (in cash, in kind, or by incorporation of reserves) or by raising the nominal value of the existing securities (Article L. 225-127 of the French Commercial Code, or Code de commerce). A reduction lowers the capital either to absorb losses (a motivated reduction) or to buy back securities and return cash to the shareholders (a reduction not motivated by losses). The regimes differ considerably, notably as regards creditors' opposition.

The accordion operation is a combined transaction: the share capital is reduced to zero (or almost zero) to absorb losses, immediately followed by an increase through subscription of new contributions. This technique restores shareholders' equity without insolvency proceedings. It may fully dilute the shareholders who do not subscribe to the increase. The Court of Cassation accepts the reduction of the capital of a company limited by shares to zero only if it is decided subject to a condition precedent, namely an effective capital increase bringing the capital to at least the legal or statutory minimum (Cass. com., 4 January 2023, No. 21-10.609). The reduction may also not undermine the equality of shareholders (Article L. 225-204).

The share premium is the difference between the issue price of the new shares and their nominal value (Article L. 225-128 of the Commercial Code). It absorbs the real economic value of the company, which generally exceeds the share capital recorded in the articles of association. Without a premium, the incoming investor would acquire securities at their nominal value although the company is worth far more, which artificially dilutes the existing shareholders.

There are three levers. First, exercise the preferential subscription right to subscribe in proportion to one's holding. Second, negotiate the share premium so as to set a fair valuation. Third, provide for contractual clauses in the shareholders' agreement (anti-dilution, ratchet, right of first refusal). If there is disagreement over the valuation, an independent expert assessment may be requested.

The period is twenty days from the filing with the court registry of the minutes of the meeting that decided on the reduction (Article R. 225-152 of the Commercial Code). The opposition is brought before the commercial court (tribunal de commerce). During this period, and until the decision at first instance where applicable, the reduction may not begin. This rule applies only to reductions not motivated by losses.

No. The court may reject the opposition if it considers that the reduction does not harm the creditor's rights. It may also order either immediate repayment of the debt or the provision of sufficient security (bank guarantee, pledge, mortgage). Once that condition is met, the reduction may resume. The timetable is generally pushed back by four to eight weeks.

Article L. 225-248 of the Commercial Code requires the board to convene an extraordinary general meeting within four months of the approval of the accounts showing the loss. The AGE decides either on early dissolution or on continuing the business, with the obligation to restore shareholders' equity before the close of the second financial year following. Failing that, any interested party may seek judicial dissolution.

Five steps: filing of the minutes with the court registry, amendment of the articles of association, legal notice, publication in the BODACC, and amending registration with the Trade and Companies Register. For a reduction not motivated by losses, add the creditors' opposition period. The company must also update the capitalisation table, the register of share transfers and the subscription forms.

Yes, by decision of the extraordinary general meeting and under the conditions of Article L. 225-135 of the Commercial Code. The removal may be total or reserved for named persons. It requires a detailed report from the board and a special report from the statutory auditor (commissaire aux comptes). Without these reports, the operation may be annulled. An individual waiver is also possible and more common in practice.

There are several grounds for annulment: irregular notice of meeting, absence of a prior report, breach of the preferential right, fraudulent undervaluation amounting to an abuse of majority, absence of the resolution reserved for employees (Article L. 225-129-6). An action for nullity of a decision to increase capital is subject to a three-month limitation period (Article L. 225-149-4). In the case of a formal irregularity, regularisation is often possible before judgment.

Abuse of majority arises where the decision is contrary to the corporate interest and taken with the sole aim of favouring the majority shareholders to the detriment of the minority. Deliberately undervaluing the company in order to dilute a minority shareholder artificially is an example sanctioned by the Court of Cassation (Cass. com., 30 September 2020, No. 18-22.076). The sanction is annulment of the resolution and the liability of the majority shareholders.

Legal costs (registry, publication, BODACC) range between €250 and €500 depending on the nature of the operation. Fees for assistance vary with the complexity: a simple cash increase with two shareholders is handled from €2,800 incl. VAT. A Series A fundraising with an incoming investor and a redraft of the shareholders' agreement generally costs between €6,500 and €15,000 incl. VAT, depending on the amount and the number of investors.

If the company has a statutory auditor, the draft reduction must be communicated to them within the period set by decree. The auditor informs the meeting of their assessment of the causes and conditions of the reduction. Failing communication, or if the report is manifestly deficient, the resolution may be annulled. For SARLs and SASs without an auditor, this formality is not required.

Yes, but only by delegation from the shareholders collectively. Authority in principle belongs to the extraordinary general meeting (Article L. 225-129 of the Commercial Code, applicable to the SAS by cross-reference). The articles of association of the SAS freely organise the arrangements: signature by the shareholders, written consultation, unilateral decision by the chairman within a ceiling. The resolution must be formalised in writing.

The commercial court for the registered office rules on actions for nullity of a resolution, abuse of majority or minority rights, creditors' opposition to a reduction, and liability actions against company officers. For a company registered in Paris, this is the Paris commercial court. The articles of association may provide for an arbitration clause that displaces this jurisdiction.