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

Company Law (en cours)

The shareholders of an SAS can make contributions in cash, in kind, and in the form of services.

1) Contributions in cash

The payments representing the cash contributions of SAS associates must be evidenced by a certificate from the depositary, issued at the time of the deposit of funds, upon presentation of the list of shareholders indicating the amounts paid by each of them . Cash shares must  …

Different types of contributions

The shareholders of an SAS can make contributions in cash, in kind, and in the form of services.

The payments representing the cash contributions of SAS associates must be evidenced by a certificate from the depositary, issued at the time of the deposit of funds, upon presentation of the list of shareholders indicating the amounts paid by each of them . Cash shares must be paid up, at the time of subscription, to at least half of their nominal value . The release of the surplus may occur in one or more installments by decision of the board of directors, within a period not exceeding five years from the company's registration in the trade and companies register . An associate cannot request the reimbursement of their associate's current account when it has been used to release part of the amount of their cash contributions .

In the case of a contribution in kind, which cannot be indirectly financed by the company itself , the articles of association must include its valuation , which is carried out based on a report also annexed to the articles of association and prepared, under his responsibility, by a contribution auditor . By way of derogation from this rule, the future partners may unanimously decide that the use of a contribution auditor will not be mandatory, when the value of no contribution in kind exceeds the amount of 30,000 euro , and if the total value of all contributions in kind not subject to the contribution auditor's valuation does not exceed half of the capital . Since Law No 2016-1691 of 9 December 2016, when no contribution auditor has been appointed or when the value retained is different from that proposed by the auditor, the partners are jointly liable for five years, with respect to third parties, for the value attributed to the contributions in kind at the time of the company's formation . This rule does not apply to the articles of association of SAS signed before 11 December 2016 . Furthermore, the joint liability of SAS partners towards third parties regarding the value attributed to their contributions in kind is excluded, in accordance with Article L. 227-1 of the Commercial Code, when a contribution auditor has indeed been appointed but has not proposed any alternative valuation of the customer file contributed by the founders .

In accordance with Article R. 22-10-7 of the Commercial Code, the contribution auditors are chosen from among the statutory auditors listed in the list provided for in I of Article L. 822-1 of the Commercial Code, established by the High Council of Statutory Auditors, under the conditions provided for in Articles L. 822-1-1 to L. 822-1-4, or from among the experts listed on one of the lists established by the courts and tribunals. The contribution in kind evaluated by an expert removed from the list provided for in Article L. 822-1 must be considered fictitious . The contribution auditors are appointed, if necessary, by the president of the Commercial Court, ruling on request. They may be assisted, in the performance of their mission, by one or more experts of their choice. The fees of these experts are borne by the company.

When the company is formed by a single person, the contribution auditor is appointed by the sole associate . However, the use of this auditor is not mandatory when the value of no contribution in kind exceeds the amount of 30,000 euros or if the sole associate, a natural person, conducting their professional activity in their own name before the formation of the company, including under the individual entrepreneur regime provided for in Articles L. 526-6 to L. 526-21, contributes elements that appeared in the balance sheet of their last fiscal year . Furthermore, the sole associate who contributes to an SAS all the assets and liabilities listed in the balance sheet of their sole proprietorship necessarily transfers to the new entity a legal action initiated in the course of their professional activity, without the need to use a contribution auditor to evaluate their contribution in kind .

3) Contributions in the form of services 

The partners of an SAS can make contributions in the form of services . These do not contribute to the formation of the corporate capital but result in the allocation of shares that entitle the holder to profit sharing and net assets, with the obligation to contribute to losses . It is up to the statutes to determine the subscription and allocation modalities of these shares . The issuance of shares for services is not established when no amendment to the SAS statutes has been made to specify that these new shares are not incorporated in value into the corporate capital . Finally, the shares resulting from contributions in the form of services are inalienable .

Commercial Code, Art. L. 225-13, as referred by L. 227-1, para. 3.

Commercial Code, Art. L. 225-3, by reference from L. 227-1, para. 3; See by analogy, Metz, 19 January 2016, LawLex202300007603JBJ, considering that in an SAS, the cash payment for shares subscribed during a capital increase must be at least one-quarter of their nominal value upon subscription, concerning a capital increase (See Article L. 225-144 of the Commercial Code, applicable by reference from Art. L. 227-1, para. 3).

Cass. com., 12 May 2021, LawLex202300007178JBJ.

CA Grenoble, 5 December 2019, LawLex202300007599JBJ.

See by analogy, CA Metz, 18 March 2021, LawLex202300007598JBJ, concerning a capital increase.

CA Rouen, 29 June 2020, LawLex202300007600JBJ.

SCHILLER and PERIN, Contributions in the form of services in SAS, Rev. sociétés 2009, 59; MASSART, Contributions of know-how in SAS, BJS 2009, 233; THEIMER, Contributions in the form of services in an SAS, JCP E 2009, No 2149.

Commercial Code, Art. L. 227-1, para. 4. - Cf. CA Paris, 28 February 2023, LawLex202300007601JBJ, holding that the work performed by an employee subject to a subordination relationship with the SAS cannot be equated with contributions in the form of services.

Civil Code, Article 1843-2, para. 2; Cf. CA Paris, 28 February 2023, LawLex202300007601JBJ, previously cited.

Commercial Code, Art. L. 225-3, by reference to L. 227-1, para. 3.

Paris, 28 February 2023, LawLex202300007601JBJ.

See by analogy, CA Montpellier, 9 June 2015, LawLex202300007313JBJ, concerning a capital increase.

Paris, 18 March 2016, LawLex202300007388JBJ, holding that the subscription, by the president of an SAS, of a loan to finance the acquisition of the bakery-pastry business operated by the company must be annulled for lack of cause when the real purpose of the contract is to finance his personal contribution, thereby imposing the cost on the company.

Commercial Code, Art. L. 225-14, para. 1, by reference to Art. L. 227-1, para. 3; Basse-Terre, 20 December 2021, LawLex202300002836JBJ, considering that the potential undervaluation of a shareholder's contribution in kind in an SAS is not sufficient to prove lack of consent, as long as, despite his advanced age, he signed the articles of association and their deposit with the notary.

Commercial Code, Art. L. 225-14, para. 1, by reference to Art. L. 227-1, para. 3. See by analogy, CA Nîmes, 11 January 2023, LawLex202300006661JBJ, holding that the settlement of the issue premium, in the context of a capital increase, through a contribution of a client file valued at 75,000 EUR by its holder, requires its evaluation by a contribution auditor.

Commercial Code, Art. L. 227-1, para. 5 and D. 227-3.

Company Law (en cours)

568. Different types of contributions

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Les notions juridiques connexes

568. Different types of contributions

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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