The creation of a company is an alchemy based on the meeting of several elements: an idea at the origin of the project, one or several people willing to carry it out. To this must be added the assets pooled to make this desire to undertake concrete.
The future partners of the company, if their ambition is to transform lead into gold, cannot however play the sorcerer's apprentice when it comes to constituting the company's share capital. Special rules are attached to the contributions made to the company.
From a legal point of view, a contribution is a transaction consisting of the delivery of cash, property, a claim or a right in order to obtain a service. The contribution thus consists in the transfer of the assets of the contributor to the person or entity that is called upon to provide the expected service. Contributions to a company thus refer to the assets pooled by the partners when a company is created.
Inputs can be of different kinds
Cash contributions by cash payments
A contribution in kind can be either an individual asset such as a building or a right such as a lease, shares or bonds, a trademark or a patent. The contribution can also be made to a group of goods and rights such as a business.
Contributions in kind: technical knowledge, know-how, research work, services, even commercial reputation. Contributions in kind are prohibited by law in SA (Sociétés Anonymes) and SCS (Sociétés en Commandite Simple).
Contributions in kind make up a significant proportion of the share capital when a company is set up. But what exactly is a contribution in kind? The future partner, if he necessarily gives of his person by investing in the entrepreneurial adventure, does so in all honor. Make no mistake: contributions in kind are subject to strict legal rules.
Contributions in kind in SAS
Another possibility for the partners is to make contributions in kind to the SAS. The partners will receive shares in exchange for the goods they bring to the company.
Note: the share capital of the SAS can only be constituted by contributions in kind.
Formalities related to contributions in kind in SAS
All the contributions in kind made must appear in the articles of association of the SAS, with the description and the valuation of each of these assets, the identity of the partners concerned by these contributions and the number of shares which were given in exchange.
The intervention of a contribution auditor is required in case of contributions in kind to a SAS.
The contribution auditor is appointed by the president of the commercial court. He must be chosen from among the auditors or from among the experts registered on one of the lists established by the courts. Nevertheless, the partners have the possibility, by unanimous vote, to appoint a contribution auditor themselves.
The Sapin 2 Law has transposed the cases of exemption of recourse to a contribution auditor as they are applicable to the SARL. It is now authorized, upon unanimous decision of the partners, that the recourse to this professional will not be made when the value of any contribution in kind does not exceed 30,000 euros and when the value of all the contributions in kind does not exceed half of the share capital.
Realization of the contribution in kind in SAS
For the contribution in kind to be valid, two cumulative conditions must be met:
ownership must be transferred from the partner to the company,
and the assets must actually be made available to the company.
A contribution in kind must be paid up in full when the company is registered, and not at a later date. The company will become the owner of the assets contributed in kind when it is registered in the Trade and Companies Register.
It should be noted that all risks associated with the assets contributed in kind are also transferred to the company at the same time as the transfer of ownership.
Obligations of the partner making a contribution in kind
A partner who makes a contribution in kind is required to guarantee the company on the following points:
against latent defects: where applicable, the other partners may take action against the partner to terminate the contribution in kind and claim compensation if normal use of the contributed asset is impossible;
against eviction: nothing should prevent the company from quietly disposing of the property that has been contributed in kind.