How can I get reimbursed for expenses incurred before my company was registered?

When a company is registered, it is often the culmination of a process initiated a few months earlier by the entrepreneur.

During the project's maturation period, certain expenses were incurred as part of these reflection and decision-making stages. These may include :

• reserving an Internet domain name,
• registering a trademark with INPI,
• the purchase of a computer,
• certain travel expenses,
• documentation and training,
• etc.

All these expenses may be deemed to have been incurred by the company, even though the latter did not legally exist at the time they were paid by the future entrepreneur.

Pre-creation costs: tax consequences

As these expenses are deemed to have been incurred by the company, they can be deducted from its profit. In this way, an expense incurred prior to registration reduces the company's income, and therefore its corporate income tax, in the first or subsequent years.

Similarly, this expense generates a receivable from the French State for the VAT paid to the service provider.

It is important to be able to justify that the expenses have been incurred for the purpose of incorporating the company and that they are business expenses.

Clearly, the purchase of a computer 3 years ago can hardly be considered as an expense that can be included in the company's accounts, when the creator decided to leave his job only six months ago...

Pre-creation costs: legal formalities

The entrepreneur must have original invoices made out in his own name or, if he already knew the name of his future company, in the latter's name. Then, either in the articles of association or at the general meeting at which the company is incorporated, a resolution must be passed stating that the partners agree to consider all prior acts as having been carried out by the company itself. A list of these acts must be appended to the articles of association or to the minutes of the incorporation meeting.

This means that the company's accounts show a debt to the partner(s) who financed the expenditure out of their own personal funds. All that remains is for the company to reimburse these expenses when it wishes - and when it can! -when it wishes to do so.

Special legal feature: use previous expenses to build up capital

If previous expenses are substantial, it may be a shame to pay out the entire capital and then have the expenses advanced by the founder reimbursed.

Let's take an example. A partner has spent €12,000 on various expenses (franchise entry fee, travel expenses, professional IT equipment, etc.), and the planned capital of his future company is €20,000.

There are two ways to do this:

• either he pays the €20,000 on the day the company is incorporated, and once the bank account is usable, he pays back the €12,000.
• Or he pays only €8,000 on the day the company is incorporated, specifying in the articles of association that the capital is partially paid up (€8,000 of the €12,000). When the accounting entries have been made, he will use his claim on the company to convert it into capital. Following this operation, the capital will be fully paid up. In this way, you don't have to pay the costs incurred prior to the company's creation twice.

In practice

It is essential to list all the expenses concerned in a table and to put them in an envelope which will be stapled to the Excel tracking table.

How to fill it in :

1. Enter each expense on a separate line
2. Break down the amount before tax and the VAT amount, which must be entered in a separate column.

If VAT does not appear on the invoice, it cannot be reimbursed by the authorities, so the amount paid must be mentioned in the column relating to the expense (parking, supplies, maintenance, etc.).