Depositing Share Capital in France: Where and How

When setting up a company in France, establishing the share capital is a foundational step—both symbolic and highly regulated. Depositing the funds, which involves locking the cash contributions in a temporary account, is a mandatory prerequisite to obtaining the crucial certificate of deposit. This certificate is the key document required to register your business with the Registre National des Entreprises (RNE, the National Register of Companies). Whether you are a local entrepreneur or a foreign resident wishing to launch your business in France, understanding the mechanics of this procedure will help you avoid costly administrative delays. This comprehensive guide details, step-by-step, where and how to deposit your share capital in full compliance with French law.

The Legal Framework of Capital Deposits: Substantive Rules and Obligations

Depositing share capital is governed by strict provisions of the Code de commerce (French Commercial Code), which vary depending on the legal structure of the company you are creating.

Applicable Statutory Laws

For a Société à Responsabilité Limitée (SARL, a private limited liability company), Article L. 223-7 of the Code de commerce requires that shares representing cash contributions (apports en numéraire) be paid up (libérées) by at least one-fifth (20%) of their nominal value at the time of incorporation. The remaining balance must be paid in one or more installments upon decision of the manager (gérant), within a maximum of 5 years from the date of registration.

For a Société par Actions Simplifiée (SAS, a simplified joint-stock company) and a Société Anonyme (SA, a joint-stock company), Article L. 225-3 (applicable to SAS companies by reference under Article L. 227-1) is more demanding: cash shares must be paid up by at least half (50%) of their nominal value at incorporation. The remaining balance must also be paid up within 5 years.

Who Is Affected?

This deposit obligation applies to all commercial companies (SARL, EURL, SAS, SASU, SA) as well as certain civil companies if their bylaws (statuts) require it. Sole proprietorships known as Entreprises Individuelles (EI), including those under the micro-entreprise (sole trader) tax regime, do not have a separate legal personality and therefore have no share capital to deposit.

Nature of the Contributions

The capital deposit described in this article concerns exclusively cash contributions (apports en numéraire). Contributions in kind (apports en nature, such as physical property, patents, or business assets) follow a different valuation procedure, which often requires the intervention of a contribution auditor known as a commissaire aux apports (Articles L. 223-9 and L. 227-12 of the Code de commerce).

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Where Can You Deposit Your Share Capital?

Since the simplification of French corporate law and the removal of the Caisse des dépôts et consignations (CDC, a public financial institution) as a depositary for business creations, founders have three main options for making their deposit.

1. Traditional Brick-and-Mortar Banks

This is the classic option. You apply to an established retail bank with physical branches (such as BNP Paribas, Société Générale, Crédit Agricole, etc.).

• Advantages: Personalised support from a professional business advisor, access to a full range of financing options (business loans), and physical services (depositing cheques and cash).
• Disadvantages: Account opening times can sometimes be long (several weeks), fees are generally higher, and documentation requirements are strict.

2. Online Banks and Neobanks

Digital players (such as Qonto, Shine, Fiducial Bancaire, etc.) have revolutionised this step by offering 100% online share capital deposit services.

• Advantages: Extremely fast (sometimes in less than 48 hours), transparent and attractive pricing, and user-friendly digital interfaces.
• Disadvantages: Inability to secure complex business loans at startup, remote-only customer service, and restrictions for certain regulated activities or for shareholders residing in certain countries outside the European Union.

3. Notaries

Article L. 223-8 of the Code de commerce expressly authorises depositing funds with a notaire (a French notary, who is a public official).

• Advantages: Maximum legal security, ideal for complex legal setups, or if the founding shareholders are of different nationalities with international funds requiring in-depth compliance checks.
• Disadvantages: Notary fees (émoluments) must be paid (generally between 100 € and 400 €), and it requires a physical appointment or the execution of formal powers of attorney (procurations authentiques).

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Step-by-Step Practical Procedures

To ensure that the deposit of your share capital goes smoothly, you must carefully follow these five steps:

Step 1: Drafting the Draft Bylaws

Before accepting your funds, the depositary will require a draft of the company's bylaws (projet de statuts, often marked "Draft" or "Unsigned"). This document must state the amount of the share capital, the distribution of shares or stock among the partners, and designate the beneficiary of the funds or the corporate officer (mandataire social) authorised to carry out the procedures.

Step 2: Choosing the Depositary and Submitting the File

Select your bank or notary and submit the required supporting documents. For each contributing shareholder, you will need to provide:

• A valid proof of identity (passport or national identity card);
• A proof of address (justificatif de domicile) dated within the last 3 months;
• The complete draft bylaws;
• The list of subscribers detailing the amount paid by each;
• For non-residents, a declaration of the source of funds may be required under LCB-FT regulations (Anti-Money Laundering and Counter-Terrorist Financing).

Step 3: Transferring the Funds

Each shareholder must transfer their share directly to the temporary escrow account opened by the depositary.

• Golden Rule: The funds must come from a personal bank account opened in the name of the contributing shareholder. It is strictly forbidden to have a third party or another company pay your share without a formally executed shareholding agreement (convention de portage) or shareholder current account agreement.
• Payments can be made by bank transfer (highly recommended for traceability) or by a bank cheque drawn on a French financial institution.

Step 4: Obtaining the Certificate of Deposit of Funds

Once the entire paid-up portion has been credited to the escrow account (compte de cantonnement), the depositary issues the certificate of deposit of funds (certificat de dépôt des fonds or attestation de dépôt de capital). This official document certifies that the funds are locked. It specifies the name of the future company, the registered office address, the total amount of capital, and the identity of the contributors.

Step 5: Registration and Release of Funds

You submit your registration application on the Guichet Unique (the French single window for business procedures managed by the INPI), attaching the certificate of deposit and the final, signed bylaws. As soon as the administration approves the registration, it issues the company's Kbis extract (the official certificate of incorporation).

Upon presenting this original Kbis extract to the depositary, the funds are unlocked and transferred to the company's final business current account. The manager (gérant) or president can then freely use them for business operations (rent, stock purchases, salaries).

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Concrete and Numerical Examples

To better understand the impact of partial payment rules, let us look at two different scenarios.

Example 1: Creation of an SAS by Jean and Sarah

Jean and Sarah decide to found a consulting SAS with a share capital of 10,000 €.

• By law, they must pay up at least 50% of the capital upon incorporation, which is 5,000 €.
• Jean subscribes to 60% of the capital (6,000 €) and must transfer at least 3,000 € to the deposit account.
• Sarah subscribes to 40% of the capital (4,000 €) and must transfer at least 2,000 €.
• They make their respective transfers of 3,000 € and 2,000 € from their personal accounts. The banker issues the certificate for a capital of 10,000 € (of which 5,000 € is paid up).
• They then have 5 years from registration to pay the remaining 5,000 €, depending on their business's cash flow needs.

Example 2: Creation of a Variable Capital SARL by Carlos (Foreign Resident)

Carlos, a Brazilian national residing in France, sets up an international trade SARL with a capital of 50,000 €.

• The law governing SARL companies requires a minimum paid-up capital of 20%, which is 10,000 €.
• Carlos chooses to deposit exactly this legal minimum of 10,000 € with an authorised neobank in France.
• The neobank charges a processing fee of 150 € excluding tax (HT) for the capital deposit.
• After verification of the source of funds from his personal account, Carlos receives his certificate of deposit. The remaining 40,000 € must be paid into the company's account before the fifth anniversary of the SARL's registration.

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Mistakes to Avoid When Depositing Capital

Depositing share capital can quickly turn into an administrative obstacle course if basic rules of caution are ignored:

• Routing funds through a third-party account: The transfer must absolutely come from an account in the personal name of the shareholder listed in the bylaws. If your spouse or your holding company makes the transfer without legal justification, the depositary will reject the funds and block the procedure.
• Underestimating bank processing times: Do not sign commercial contracts or commercial leases expecting to get your Kbis in 3 days. Between the transfer of funds, the issuance of the certificate by the bank (allow 2 to 10 business days depending on the institution), and processing by the commercial court registry (greffe) via the Guichet Unique, you should plan for a total timeframe of 2 to 4 weeks.
• Depositing cash without proof of origin: Due to European anti-money laundering regulations, depositing cash to establish capital is extremely restricted and almost systematically refused by online banks. Always opt for a SEPA or international bank transfer.
• Drafting bylaws that do not match the certificate of deposit: The slightest spelling difference in the company name, the registered office address, or the distribution of contributions between the draft bylaws sent to the bank and the final bylaws submitted to the registry will lead to an immediate rejection of the registration file.

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FAQ (Frequently Asked Questions)

What is the minimum share capital for a company in France?

For SARL, EURL, SAS, and SASU companies, the minimum share capital set by law is a symbolic 1 €. However, a capital that is too low can harm the company's credibility with banks, suppliers, and clients. For a Société Anonyme (SA), the minimum share capital is set at 37,000 € (Article L. 224-2 of the Code de commerce).

What happens if the company is ultimately not registered?

If the company is not registered within 6 months from the date the funds were deposited, or if the project is abandoned, any shareholder can apply to the court to appoint a representative to recover their funds. Alternatively, the shareholders can collectively withdraw the funds directly from the depositary (notary or bank) upon presentation of a certificate of non-registration (attestation de non-immatriculation) issued by the registry of the Commercial Court (Tribunal de commerce).

Can a non-resident deposit share capital in France?

Yes, a foreigner (whether resident or non-resident) can perfectly set up a company in France and deposit capital there. However, traditional and online banks will apply enhanced due diligence measures (KYC - Know Your Customer). They will require proof of the source of funds and certified or apostilled identity documents. Going through a French notaire is often the smoothest solution for non-EU residents.

Can the share capital be modified after registration?

Absolutely. The share capital is not fixed. You can carry out a capital increase (by contributing new funds or incorporating reserves) or a capital reduction (in the event of losses or the departure of a shareholder). These operations require a decision in an Extraordinary General Meeting (Assemblée Générale Extraordinaire - AGE), an amendment of the bylaws, and the publication of a notice of modification in an authorised legal gazette (Journal d'Annonces Légales - JAL).

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Summary

• Legal Obligation: Depositing share capital is mandatory for all commercial companies (SAS, SARL, etc.) to obtain the certificate of deposit required for registration.
• Payment Rates: You must pay up at least 20% of the cash capital for a SARL and 50% for an SAS upon incorporation. The rest must be paid within 5 years.
• Three Possible Depositaries: You can deposit your funds with a traditional retail bank, an authorised neobank, or a notary.
• Strict Traceability: Funds must come from a personal bank account opened in the name of each contributing shareholder.
• Release of Funds: The money remains locked in a temporary account and is only transferred to the company's current account upon presentation of the final Kbis extract.

Legal information for guidance only, not personalised legal advice. For your specific situation, ask your question free of charge on AvocatAI — answers based on French law, in your language.