What is the share capital of a company?
Under french law, the share capital of a company represents the value of the assets (in cash or in kind) that one or more individuals (referred to as shareholders) contribute to the company to establish it. After the company is formed, these contributions become its initial assets.
This capital enables the company to pay its formation expenses and carry out its initial operations and investments, even before making any profit.
It also helps define the number of shares or stock held by each shareholder, and thus their respective participation in the company. The number of shares or stock allocated to each shareholder is proportional to the value of their contribution to the company. However, it is important to note that the company’s articles of association may set out rules that differ from this principle.
This capital, as it constitutes the company’s initial assets, is also a guarantee of financial security for the company’s partners and clients. Indeed, the amount of share capital is an important indicator of the company’s financial stability and resources for those who have or wish to establish business relationships with it. As such, this amount is indicated in all company documents (Kbis extract, invoices, quotes, letters, etc.).
Due to the financial guarantee that the amount of share capital provides to the company’s business partners and clients, the availability and actual payment of all or part of the cash contribution(s) from the shareholder(s) must be verified by providing a share deposit certificate from the custodian of the funds for commercial companies (SARL, SAS, SASU, EURL, SA, SNC).
In France, this certificate can be issued by a public notary, a bank, or the “Caisse des Dépôts et Consignations”.
The public notary office Chassaint & Cerclé Notaires assists business creators with the necessary steps for depositing their company’s share capital. For more information, click here.
