Bankruptcy Law

The judgment opening the court-supervised liquidation immediately makes the unpaid share capital due and payable . Over and above the need to mobilize all possible means of financing the company's activity while it is being provisionally maintained, this provision restores a certain equality between the debtor's creditors and partners, by requiring them to contribute jointly to the company's conti …

Release of all share capital

The judgment opening the court-supervised liquidation immediately makes the unpaid share capital due and payable . Over and above the need to mobilize all possible means of financing the company's activity while it is being provisionally maintained, this provision restores a certain equality between the debtor's creditors and partners, by requiring them to contribute jointly to the company's continuity.

It is up to the liquidator to serve formal notice on the defaulting partner or shareholder to pay up the amount of unpaid share capital , by registered letter with acknowledgement of receipt. Based on the partnership contract, the liquidator's action is subject to the five-year statute of limitations set out in Article 2224 of the Civil Code, starting on the date of the judgment opening the insolvency procedure, which renders due and payable the contribution claim held by the debtor company against its shareholders .

Only a person whose status as a partner or shareholder has been established can be required to pay up the outstanding share capital . Identifying the debtor of the obligation to pay up contributions may prove a source of difficulty in the event of a transfer of shares prior to the liquidator's action. Article L. 228-28 of the Commercial Code goes some way towards circumventing this obstacle for limited companies, by providing that a shareholder who has sold his shares less than two years prior to the liquidator's action remains jointly and severally liable, with the transferees, for payment of the unpaid share capital . On the other hand, in the absence of an equivalent provision for limited liability companies, and in the absence of a contractual stipulation to the contrary, the obligation to pay up the share capital does not fall on the transferee of shares in a limited liability company, but on the transferor, since such an obligation, inherent in the initial subscription of the shares, constitutes a debt to the company independent of the transfer . Lastly, the liquidator may not request a minor to pay up a contribution rendered null and void due to incapacity .

To avoid their obligations, partners called upon to pay up the share capital regularly invoke the offsetting of this debt against the positive balance of their partner's current account. However, the debt for payment of share capital and a partner's current account claim do not derive from the same contract, and therefore do not constitute related claims liable to set-off . On the other hand, a partner's debt in respect of paid-up but unpaid share capital may become due and payable, and therefore subject to legal set-off, by decision of the company's governing body, which demands payment . A partner cannot claim to have paid up his contributions by offsetting them against the credit balance of his partner's current account if the Board of Directors has not recorded any payment and the transaction has not been taken into account in the company's accounts . On the other hand, set-off is acquired if it is established that the payment made into the partner's current account was intended to settle the capital payment debt, and that the allocation to this account is the result of an error by the chartered accountant . A shareholder invoking set-off is required to provide proof of his request for repayment of his claim and of its allocation to the payment of his debt, prior to the opening of the insolvency procedure .

Lastly, the application of Article L. 624-20 of the Commercial Code does not render the unpaid portion of the share capital immediately due and payable where a clause in the articles of association provides for payment in instalments . Nevertheless, the payment period requested by a shareholder in default of payment of the outstanding share capital may not exceed twenty-four months, in the interests of expediting the company's insolvency procedure .

C. com., art. L. 624-20, applicable to the court-supervised liquidation procedure on reference from art. L. 641-14 C. com.

C. com., art. L. 622-20, para. 2, applicable to the court-supervised liquidation procedure by reference to art. L. 641-4, al. 4 C. com.

CA Pau, 29 March 2018, LawLex202200003966JBJ (LJ).

CA Pau, 21 January 2021, LawLex202200003818JBJ (LJ).

CA Poitiers, 17 October 2017, LawLex202200003812JBJ (LJ).

Cass. com., 1 July 2020, LawLex202200003810JBJ (LJ).

CA Riom, 19 September 2018, LawLex202200003819JBJ (LJ); CA Riom, 26 June 2019, LawLex202200003964JBJ (LJ).

CA Riom, 26 June 2019, LawLex202200003964JBJ (LJ).

CA Paris, 16 February 2021, LawLex202200003965JBJ (LJ).

CA Montpellier, 29 January 2013, LawLex202200002929JBJ (LJ).

CA Reims, 20 September 2016, LawLex202200003967JBJ (LJ).

Bankruptcy Law

874. Release of all share capital

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

874. Release of all share capital

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise