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

Company Law (en cours)

In accordance with Article 1832 of the Civil Code, the partners agree by contract to allocate to a common undertaking assets or their industry. Contributions, whether in cash, in kind, or in the form of services, represent one of the constitutive elements of a company.

1) Contributions in cash

The contribution in cash is made by paying a sum of money to the company, integrated into the share cap …

Contributions of partners

In accordance with Article 1832 of the Civil Code, the partners agree by contract to allocate to a common undertaking assets or their industry. Contributions, whether in cash, in kind, or in the form of services, represent one of the constitutive elements of a company.

The contribution in cash is made by paying a sum of money to the company, integrated into the share capital . The contribution may consist of funds intended to satisfy the creditors of another associate . If no minimum is required, a quasi-symbolic advance, to be applied to the contributions intended to operate the economic interest group whose formation is planned, does not truly equate to a contribution in cash, capable of attesting to the existence of a de facto company . Similarly, the promise of a cash contribution insufficiently determined does not meet the requirement for contributions, as provided by Article 1832 of the Civil Code . The contribution made must be devoid of immediate consideration. Thus, the payment of the majority of household expenses by a cohabitant is insufficient to establish the existence of cash contributions, as she is housed without having to pay rent in return . Finally, the contribution must be tangible: a guarantee and a surety can only constitute a company contribution if they have been enforced .

A contribution in kind is defined as the provision to the company of an asset other than a sum of money, such as movable or immovable property. The contribution may involve a tangible or intangible asset. In fact, the contribution by a merchant of their business assets, consisting of their clientele, goodwill, premises, and activity, and by a company of its advertising spaces, organization, and significant resources, allows for the identification of a de facto company . Similarly, the transfer of clients from one company to another, demonstrated by the production of client ledgers, invoices, and a telephone line, constitutes a contribution to the de facto company . The co-owner who agrees to the development of commercial activity in the undivided property, allowing for savings that benefit the activity, thus participates in the contributions to the de facto company . The act of a person recognizing another's ownership of real estate in exchange for advances of funds can also be analyzed as a contribution in kind . However, the promise made by a person who has committed to providing, in addition to their services, the availability of premises, without benefiting from any transferable rights over them, does not truly constitute a contribution in kind .

The partner who contributes their work, reputation, or knowledge to a company makes a contribution in the form of services. Performing functions that remain within the limits of those carried out under an employment contract cannot, evidently, be classified as a contribution in the form of services . Conversely, a person who, in the absence of any subordination, contributes through their services to the de facto company created with their ex-husband cannot be classified as an employee, but as a partner . Similarly, consulting and administrative services such as accounting and assistance on certain projects, when invoiced as an individual entrepreneur, cannot validly be classified as contributions in the form of services . In the context of relationships between cohabitants, the recognition of a contribution in the form of services varies depending on whether the activity exceeds the simple contribution to the common living expenses . In fact, the classification is often denied for work performed by a cohabitant on real estate owned by the other cohabitant . Conversely, a cohabitant who actively participates in their partner's taxi business by frequently substituting for them in transportation, managing the business alone during their illness, and handling the company's secretarial work at the marital home, is considered to have made a genuine contribution in the form of services . The same applies to the maintenance and routine care provided by a cohabitant to horses within the framework of the joint operation .

Paris, 23 March 2017, LawLex202300010840JBJ, considering that the payment of a sum of money at the time of the creation of an undertaking can only be classified as a contribution in cash, absent any other explanation.

Cass. com., 1 December 1981, LawLex202300010068JBJ.

Cass. com., 18 December 1990, LawLex202300014410JBJ.

Cass. com., 5 April 2005, LawLex202300014405JBJ; CA Poitiers, 26 April 2023, LawLex202300010798JBJ.

CA Nîmes, 26 November 2013, LawLex202300010821JBJ.

Paris, 16 October 2014, LawLex202300010817JBJ. - Similarly, for the services of a notary, Paris, 17 February 2023, LawLex202300010799JBJ.

See, Cass. com., 24 September 2013, LawLex202300009718JBJ, considering that the partner, who, through domestic work and child-rearing, contributed to reducing expenses to ensure the repayment of loans contracted by the couple, made a contribution in the form of services.

See notably CA Riom, 4 July 2000, LawLex202300011146JBJ; CA Grenoble, 8 January 2002, LawLex202300010986JBJ

Cass. com., 12 February 2002, LawLex202300010854JBJ.

CA Versailles, 21 September 2021, LawLex202300010059JBJ.

CA Colmar, 18 March 2008, LawLex202300009739JBJ.

CA Paris, 12 September 2002, LawLex202300011121JBJ.

CA Poitiers, 26 April 2023, LawLex202300010798JBJ.

Cass. com., 4 March 1970, LawLex202300010067JBJ.

CA Paris, 23 March 2017, LawLex202300010840JBJ.

Cass. com., 23 June 2004, LawLex202300010066JBJ.

Company Law (en cours)

616. Contributions of partners

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616. Contributions of partners

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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