The share capital of a société par actions simplifiée (SAS) may well change during the life of the company. It is up to the company's shareholders to decide whether to increase or reduce the amount of capital.
In all cases, a specific procedure must be followed: collective decision-making, publication formalities, etc. So, in concrete terms, what do you need to do to increase the capital of an SAS? What documents need to be provided? And above all, how much does it cost?
Answers right away.
A capital increase involves revising the SAS articles of association, and therefore carrying out certain essential formalities.
1. The decision to increase capital
The agreement of the shareholders is required for any modification to the company's bylaws. The bylaws set out the terms and conditions for such changes, as well as the applicable rules. In particular, they define the quorum and majority requirements for collective decision-making.
Consultation of these constitutive documents is particularly crucial in the event of a capital increase. Indeed, if they contain an approval clause, the arrival of new associates generated by a capital increase is subject to the approval of the associates or of a body designated by the bylaws.
Similarly, where pre-emptive rights are maintained, shareholders have a priority right to subscribe for any new shares issued in connection with a capital increase. However, if this right is withdrawn, certain shareholders may not take part in the vote.
In any case, once the partners have given the go-ahead for the increase in share capital, the minutes of the general meeting must be drawn up. The company's Articles of Association must also be updated.
2. Choosing the type of capital increase
There are several options for increasing the share capital of an SAS, depending on the type of financing required:
- Issuance of new shares
- Increase in the par value of existing shares
- Cash contributions
- Contributions in kind
- Incorporation of reserves
- Bond conversion
- Offsetting receivables
Good to know
A capital increase by incorporation of reserves is only possible if the share capital has been fully paid up. In addition, when incorporating the legal reserve, care must be taken to ensure that it does not fall below the legal minimum.
3. Completion of the capital increase
Once the capital increase method has been defined, associates must :
- Deposit funds in a dedicated account for cash contributions
- Transferring ownership of the contribution in kind to the SAS in the case of a contribution in kind
- Incorporate reserves into capital (transfer reserves to a dedicated account)
4. Tax registration
As mentioned above, the decision to increase the capital of an SAS must be recorded in the minutes of the shareholders' meeting. These must be registered with the relevant Service des Impôts des Entreprises (SIE) no later than one month after the meeting.
Note that since January 1, 2019, this mandatory formality is completely free of charge.
5. Publication in an authorized newspaper
As with any modification to the articles of association of a company (SAS, SARL, EURL, SASU, SCI, etc.), an increase in share capital also requires publication of a notice in a legal gazette covering the département of the company's registered office. The aim is to inform the public and third parties of the change. A certificate of publication will then be issued to the company by the newspaper.
6. Filing an application for amending registration with the commercial court clerk's office
Finally, it's important to submit a complete file to the CFE (Centre de Formalités des Entreprises) or directly to the appropriate registry.
If your application is accepted and compliant, the company registrar will proceed with the amending entry in the Trade and Companies Register (RCS). You will then be issued with a new Kbis extract showing the new capital amount.
The following supporting documents are required to transmit the application file to the registry:
- A copy of the updated bylaws
- M2 form
- A copy of the tax-registered AGM minutes
- Auditor's report for contributions in kind
- Certificate of deposit for cash contributions
- Certificate of publication
- A power of attorney if the SAS Chairman has not signed the documents himself
A cheque made payable to the clerk's office should also be included to cover administrative costs.
A capital increase obviously has a cost. You need to allow for :
- The cost of publishing a legal notice: between €200 and €300
- Fees payable to the commercial court clerk's office: up to €200
- Professional fees (commissaire aux apports, chartered accountant, etc.): minimum €1,000
Written by our expert La Rédaction
June 24, 2020
