In order to create a company in France, the associates or shareholders have to put a certain amount of properties at the disposal of the enterprise in order to constitute the share capital.
This deposit of properties is known as contributions (apports in French) and they are three main types: cash contributions, in-kind contributions, and industry contributions.
In exchange for these contributions, the associates receive a proportional amount of shares: social shares (in the case of a SARL or EURL) or stocks (for example, in the case of a SAS or a SASU). The amount of each contribution will thus define the distribution of shares amongst the associates or shareholders. It's important to note that the total amount of capital can vary along the life of the enterprise depending on their needs.
Contributions in cash
The contribution in cash is a deposit of money made by the associates in order to create the social capital of the company. The contribution in cash is made at the time of the creation of the company and it must be deposited in the bank account of the enterprise, in the “Caisse des dépôts et consignations” (a French organism created for investments, which can be translated as Deposits and Consignments Fund) or by using the services of a notary. The total amount will then be put on hold until the registration of the company is effective, which is justified by means of the K-bis extract. However, it is possible to opt for a partial release of said contribution. In doing so, the associates are entitled to provide, at the moment of the creation of the company, only 20 % of the capital planned for the SARL and 50 % for the SAS. The action is known as "liberation of capital" when the total amount of the share capital has been deposited. The terms to determine the contributions in cash have to be stated in the statutes of the enterprise.
Contributions in kind
Contributions in kind can take very different forms. The goods concerned by the contribution in kind are, for example, the merchandise of the company, its real estate, the commercial property, etc.
These contributions will constitute the capital of a company after carrying out an assessment to determine the value of each contribution in kind. Indeed, while it is simple to evaluate a contribution in cash (that is to say in money), the contribution in kind requires a preliminary assessment which will then translate into an equivalence determined in number of shares by means of a contribution treaty. There is often a need for a contribution commissioner, however, it means that the cost of starting the company will be higher. Nevertheless, as an exception, the associates of a SARL can unanimously decide not to resort to a contribution commissioner if they meet these two conditions:
- The contribution in kind does not exceed 30,000 euros.
- The total value of the contributions in kind do not exceed half of the share capital.
Contributions in industry
A contribution in industry is a contribution in determined by the work of the associates or shareholders, and it is materialized by the provision of the associates of their technical knowledge, their work, or the services that they provide and which benefit the company. Nevertheless, this type of contribution isn’t frequently used.
Unlike the other two types of share capital constitution, the contribution in industry does not generate the share capital of the company per se, but it gives the associates the possibility to obtain social shares or stocks. Contributions in industry are recorded in the statutes of the enterprise, where it is indicated to which associate the contribution corresponds. However, the associate concerned still takes part in the decisions of the company by means of voting, and they are entitled to the share of profits and net assets. Indeed, the contribution in industry provides several rights to the associates, but it also represents additional obligations, as they are responsible for the losses that may occur as well.