All of French Company Law: ordinary law of companies and specific regime for different types of companies

Company Law (en cours)

An associate who makes a contribution in a current account instantly becomes a creditor of the company. As such, they can personally  request reimbursement at any time , subject to the applicable statute of limitations , as long as the claim is certain, liquid, and due . The right to reimbursement of associates cannot be removed or restricted in any way or for any reason , except by the unequivoca …

Fate of current account

An associate who makes a contribution in a current account instantly becomes a creditor of the company. As such, they can personally  request reimbursement at any time , subject to the applicable statute of limitations , as long as the claim is certain, liquid, and due . The right to reimbursement of associates cannot be removed or restricted in any way or for any reason , except by the unequivocal intention of the creditors to waive it . Consequently, the decision of the general meeting, taken by majority, to institute a freeze on associates' current accounts must be considered as increasing their commitments, unenforceable against those who did not vote for it .

To avoid repaying the current account, the company may be tempted to invoke financial difficulties. Case law is categorical on this matter and considers that the financial difficulties experienced by a company do not prevent the partner from requesting the repayment of their current account, in accordance with their own interests . Similarly, an SARL cannot oppose repayment by invoking the cessation of payments that it would cause or the voidable nature of a payment made to a partner to the detriment of its other creditors . Likewise, a company cannot exempt itself from its obligation to repay the full amount of a current account on the grounds that it does not have the necessary cash at the time of the request .

Can the company rely on the provisions of Article 1343-5 of the Civil Code, relating to grace periods, to request a payment schedule? Some trial courts have granted such requests, considering that although the company's difficult financial situation was not sufficient to defeat the associate's right to reimbursement of their current account, it could nevertheless justify granting payment terms by spreading it over two years . However, nothing guarantees the success of this strategy. Indeed, the Court of Cassation has specified that the provisions of Article 1900 of the Civil Code, which offer the judge the possibility of setting a term for the repayment of a loan, invoked by a company to obtain a payment delay, are not applicable to the associate's current account, “whose essential characteristic, in the absence of a specific or statutory agreement governing it, is to be repayable at any time” .

Companies in insolvency proceedings have also argued, to oppose repayment, that it could fall under the nullities of the suspect period. Article L. 632-1, I, 3° of the Commercial Code declares null and void any payment of unmatured debts made between the date of cessation of payments and the opening of reorganization or liquidation proceedings. However, this provision does not seem to apply to associates' current accounts because case law considers that the credit balance of an associate's current account constitutes a matured debt, which the holder is entitled to request repayment of at any time . Nevertheless, the payment of debts, even matured, during the suspect period is not without risk: it is subject to optional nullity, pursuant to Article L. 632-2, provided it is established that the creditor was aware of the debtor's cessation of payments. Case law applies this solution to the associate's current account and considers that repayment obtained during the suspect period cannot be annulled when its holder was not personally aware of the company's cessation of payments . More compelling is the argument based on Article L. 622-7 of the Commercial Code: it provides for a prohibition on the payment of claims prior to the opening judgment, which naturally applies to associates' current accounts . The associate may indeed attempt to invoke legal set-off to circumvent the obstacle. However, Article 1347-1 of the Civil Code subjects this set-off to rather strict conditions: the parties' reciprocal claims must be fungible, liquid, certain, and due. Yet, case law holds that in the absence of fungibility of their items, there can be no set-off between the debit balance of a current account and a credit securities account . Failing to meet these conditions, the associate may also invoke the set-off of related claims. However, this is only accepted if the two claims arise from the same contract, the same framework agreement, or the same economic operation. Yet, the claim constituted by the credit balance of an associate's current account derives from a loan granted to the company, while the company's claim against its shareholder for the unpaid portion of their cash contribution arises from the company contract .

The obligation imposed on partners to contribute to losses may also constitute an obstacle to the repayment of the current account when the company demonstrates that it is facing significant liabilities .

The principle and terms of immediate reimbursement may be subject to statutory adjustments . A clause inserted in a company's articles of association may validly subject the reimbursement of a partner's current account to its cash flow capacity . A vote by the partners' collective may also defer the partner's right to reimbursement. This is the case when the general meeting has unanimously decided to retroactively transform these accounts into conditional advances to give them the character of shareholders' equity, pending their return to a certain amount . Similarly, a company's refusal to reimburse a partner's current account is free from criticism when the partner has himself voted for a resolution, adopted unanimously, stating that “until a new contrary decision, [...] the partners' current accounts will not be remunerated and [...] the balance of these current accounts after allocation of the result will be maintained in the company as long as its cash flow does not allow for reimbursement” . When a partner has individually committed to blocking his current account and pledging it for the benefit of a creditor, such as a bank, for a determined period, reimbursement cannot be demanded prematurely without the agreement of the bank and the company, even if the partner has since been excluded. The loss of partner status is then irrelevant, as the individual commitment remains valid and enforceable .

Finally, the statutes that subject the repayment of a current account to a collective decision in order to set limits or constraints cannot be interpreted as establishing an indispensable prerequisite under penalty of inadmissibility of the associate's request, since, from the company's formation, the associates have not deemed it appropriate or useful to rule on this issue and impose conditions on the withdrawal of one of them .

Does the transfer of ownership interests entail the transfer of the current account and exclude its reimbursement to the transferring partner? Jurisprudence answers in the negative when the transfer deed does not provide for such a transfer . Furthermore, a share transfer agreement that stipulates the reimbursement of a partner's current account is solely the company's responsibility prevents the transferee from being held liable . Moreover, it has been ruled that, in the absence of a contrary stipulation, the obligation to pay the price of the ownership interests of a partner subject to a buyback by the company and the obligation to reimburse their current account are legally independent. The transferring partner, although entitled to request reimbursement of their current account, is not justified in invoking its non-reimbursement to obtain the termination of the buyback agreement of their ownership interests .

Finally, the manager of the company must be particularly cautious in managing current accounts. Indeed, a manager who reimburses their associate's current account with full knowledge of the company's financial difficulties, particularly its cash flow situation, to favor their personal situation, commits a management fault that contributes to the insufficiency of assets, even if the company had sufficient liquidity at the time . Conversely, one who delays the reimbursement of amounts owed by the company to an associate, as reimbursement of their current account, commits a fault detrimental to the company, which they must remedy by guaranteeing the payment of default interest .

Cass. 1re civ., 9 February 2011, LawLex202200008919JBJ, indicating that the action for reimbursement of an associate's current account can only be exercised by the holder of this account, even in the presence of a community of property; Cass. com., 23 September 2014, LawLex202100002131JBJ, however, considering that when the company is in judicial liquidation, the action for payment of the balance of the associate's current account no longer belongs to the associate but to the liquidator.

Cass. 3e civ., 3 May 2018, LawLex202200000595JBJ, considering that a partner in an SCI can obtain the reimbursement of their current account at any time without having to obtain the consent of their co-partners; Cass. com., 18 October 2017, LawLex202200008915JBJ, specifying that the limitation period for the claim for reimbursement of a partner's current account only begins from the day the partner requests payment of the balance, and not from the decision to distribute dividends made by the general meeting, nor from their payment by entry in the current account, nor from their entry in another account by the company.

CA Montpellier, 16 December 2008, LawLex202300002113JBJ; CA Paris, 24 February 2015, LawLex202200000596JBJ.

Cass. com., 10 May 2011, LawLex202200000601JBJ.

Paris, 17 September 1999, LawLex202200009182JBJ.

Cass. com., 19 November 2013, LawLex202100001997JBJ.

Cass. com., 27 September 2017, LawLex202100002832JBJ, applying to the current account the prohibition on payment of claims prior to the commencement judgment.

Cass. com., 16 December 2014, LawLex202100002747JBJ.

Cass. com., 20 May 1997, LawLex202100002701JBJ.

Cass. 1re civ., 27 November 2013, LawLex202200008922JBJ; Paris, 19 September 2007, LawLex202200009185JBJ, holding that a real estate civil company (SCI) cannot justify its refusal to reimburse an associate's current account by alleging the set-off between this claim and corporate losses without submitting to the proceedings any minutes of the general meeting approving the accounts and allowing these losses to be established.

CA Paris, 18 June 2015, LawLex202200009179JBJ, holding that the repayment of associates' current accounts must be carried out in compliance with the statutory provisions that require a collective decision of the associates or an a posteriori ratification by the general meeting for this purpose; 26 February 2015, LawLex202200009183JBJ, emphasizing that any derogation from the principle of immediate repayment of the current account must be clearly expressed.

Cass. com., 9 October 2007, LawLex202200003191JBJ.

Cass. com., 10 December 2013, LawLex202200008870JBJ, emphasizing that the statute of limitations for the action to recover the balance of an associates' current account is distinct from that applicable to the action for payment of dividends.

CA Paris, 12 December 2007, LawLex202200009181JBJ.

Cass. com., 14 February 2006, LawLex202200008909JBJ.

CA Paris, 15 May 2025, LawLex202500004167JBJ.

CA Aix-en-Provence, 9 February 2023, LawLex202300012885JBJ.

Cass. com., 27 May 2021, LawLex202200000606JBJ; 11 January 2017, LawLex202200008934JBJ; CA Paris, 17 March 2015, LawLex202200009178JBJ; CA Versailles, 25 September 2007, LawLex202200009180JBJ.

Cass. 1re civ., 27 September 2023, LawLex202300013343JBJ.

Cass. com., 12 February 2025, LawLex202500001000JBJ, Gaz. Pal. 17 June 2025, No 20, pp. 59-60.

Cass. com., 20 October 2021, LawLex202200000300JBJ, indicating that the manager who proceeds with the repayment of their associates' current account with full knowledge of the company's financial difficulties and particularly its cash flow situation, to favor their personal situation, even if the company has sufficient liquidity at the time to allow it, constitutes a management fault contributing to the insufficiency of assets; 24 May 2018, LawLex202100001744JBJ, considering that the repayment of associates' current accounts constitutes a management fault that engages the manager's liability to cover the insufficiency of assets, when it results in preferential payment to the detriment of the company's creditors.

Cass. com., 12 January 1993, LawLex202200008920JBJ.

Cass. com., 22 September 2021, LawLex202200008908JBJ, holding that an associate's current account is not repayable on demand when the claim for restitution does not appear certain, liquid, and due, due to accounting irregularities.

Cass. com., 14 November 2006, LawLex202200008918JBJ, considering that the failure of the associates to determine the conditions of interest and withdrawal of funds recorded in the current account does not deprive the associate holding such an account, nor their successors, of the right to demand reimbursement in court.

Cass. com., 4 February 2014, LawLex202200003190JBJ, holding that the fact that partners did not come forward during the liquidation of the company to claim the repayment of their associates' current account does not indicate their unequivocal intention to waive the exercise of their right.

Cass. com., 24 June 1997, LawLex202200000594JBJ.

Paris, 24 February 2015, LawLex202200000596JBJ; CA Versailles, 6 July 2021, LawLex202300008342JBJ.

CA Paris, 2 July 2019, LawLex202200009177JBJ; Cass. com., 15 May 2019, LawLex202200008940JBJ, noting that the reimbursement of an associate's current account cannot be challenged through a Paulian action, unless it was carried out in violation of an agreement or the company's statutes or in the form of a payment made by unusual means, as it does not constitute an act of impoverishment of the debtor; CA Aix-en-Provence, 6 July 2017, LawLex202200000398JBJ, considering that an associate has the right to reimbursement of their current account at any time, without being opposed by the company's financial difficulties.

Cass. com., 8 December 2009, LawLex202200000402JBJ.

Company Law (en cours)

58. Fate of current account

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Les notions juridiques connexes

58. Fate of current account

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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