Company contributions, French law, civil code, commercial code, cash contribution, industry contribution, shareholder rights, company capital, SAS, SARL, marriage regime, community goods
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Abstract
Understanding the different types of contributions to a company under French law, including cash, in-kind, and industry contributions.
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[...] It will therefore be a matter of analyzing the situation of each associate of the SAS. In order to know if the constitution of the SAS will be possible, it will be a matter of knowing how to answer the following question: in what different measures can contributions be made and what will be the consequences of these on the company? Situation of Pierre Situation of Julie 3 Situation of Patrick Situation of Pierre Contribution in kind In law, thearticle 1842 of the Civil Code states that 'companies can be formed by contributions in cash, in kind or in industry'" In addition, thearticle 1843-3 of the same code adds that 'the contribution in kind must be valued at the time of the company's formation or at the time of a capital increase' Finally, thearticle L.227-3 of the Commercial Code suppose that 'the contributions in kind are valued by a contributions commissioner when the value of the contribution in kind exceeds the amount fixed by the decree' In this case, Pierre wants to contribute the business assets that will be useful to the company's activity. [...]
[...] In addition, thearticle 1421 of the civil code adds that 'each spouse can dispose of the goods that belong to them in their own right, but they cannot dispose of common goods without the consent of the other spouse' In this case, since the business assets are acquired during the marriage, Pierre will need Manon's consent to bring them to the company. To conclude, Pierre will be able to bring the business assets to the company, which will be valued by an appraiser. It is also necessary to obtain the consent of his wife to bring the business assets. Julie's situation Contribution in cash In law, thearticle 1842 of the civil code decides that « companies can be formed by contributions in cash, in kind or in industry ». [...]
[...] - Answers to questions The scope of application of Article 1832-2 of the Civil Code is rationae personae, as it refers to persons, here it is about married spouses under the regime of community of goods. This article requires the married partner to take into account the rights of their spouse on the common good that can be brought to the company. There can be several sanctions, such as the revocation of the contribution, nullity or even damages. The spouse benefits from their right of protection on the common goods until the dissolution of the community (dissolution of the marriage), or by death. [...]
[...] In this case, since a contribution in industry does not enter into the capital of the company, the statutes can provide the rights of Patrick. It is for this reason that thearticle 1844-1 of the civil code provides that « partners who have made a contribution in industry are entitled to shares to the extent provided for in the articles of association». In this case, Patrick will also have the right to shares, but they will not increase the company's capital, and these must be provided for in the articles of association. [...]
[...] contributions). Article 1424 applies to all acts of disposition on the common goods during the marriage, while Article 1832-2 only concerns contributions to the company. II. Exercise 2 (Case Study) In this case, Pierre wishes to contribute a business asset to a SAS that he will create with two other associates; it is a common asset with his wife. His wife Manon is hesitant to become a shareholder of this SAS. In addition, Pierre's two associates, Julie and Patrick, doubt the valuation of the business asset to be contributed by Pierre. [...]
