How to Obtain a Depositary’s Certificate for a Share Capital Increase in France
When a French company carries out a share capital increase in cash, it may be required to provide evidence that the amounts subscribed by its existing shareholders or new investors have actually been paid.
This evidence takes the form of a depositary’s certificate (certificat du dépositaire).
When the funds for the capital increase are deposited with a French notary, the notary can issue the depositary’s certificate after receiving the funds and completing the required checks.
This procedure can also be used for capital increases involving foreign shareholders, foreign companies or international investors.
What Is a Depositary’s Certificate?
The depositary’s certificate confirms that the funds corresponding to the subscriptions made as part of the capital increase have actually been deposited.
It therefore establishes the connection between two aspects of the transaction:
- the shareholder or investor has subscribed for new shares issued by the company; and
- the corresponding subscription amount has actually been paid.
For French companies limited by shares, French law provides that subscriptions and payments are evidenced by a certificate issued by the depositary when the funds are deposited.
The certificate can then be used as part of the corporate formalities required to complete the share capital increase.
Who Can Issue the Depositary’s Certificate?
The certificate is issued by the institution or professional with whom the capital increase funds have been deposited.
A French notary can act as depositary of the funds and issue the corresponding certificate.
The certificate is therefore not merely a statement based on information provided by the company. It confirms that the relevant subscription funds have actually been received by the depositary.
For this reason, the choice of depositary should be made before the investors transfer their funds.
How Do You Obtain a Depositary’s Certificate from a French Notary?
The procedure can generally be divided into four main stages.
1. Prepare the Share Capital Increase
The company first determines the terms of the proposed capital increase.
Depending on the transaction, this may include:
- the total amount of the capital increase;
- the number of new shares to be issued;
- the nominal value of the shares;
- any share premium;
- the subscription price;
- and the identity of the existing or new shareholders participating in the transaction.
The required corporate resolutions and subscription documents are then prepared according to the company’s legal form and articles of association.
2. Submit the Documentation to the Notary
The documents relating to the French company, the capital increase and the subscribers are provided to the notary for review.
This stage is particularly important because it allows the required identification and compliance checks to be completed before the funds are transferred.
Where the transaction involves foreign investors, additional documentation may be required depending on the investor’s country of residence or incorporation.
3. Transfer the Subscription Funds
Once the file has been reviewed and accepted, payment instructions can be provided.
Each investor then transfers the amount corresponding to its subscription.
The payment information should allow the notary to identify clearly:
- the investor making the payment;
- the French company carrying out the capital increase;
- and the subscription to which the payment relates.
Where several investors participate in the capital increase, each transfer must be capable of being reconciled with the relevant subscription documentation.
4. Issuance of the Depositary’s Certificate
Once the required funds have been received and the necessary checks have been completed, the notary can issue the depositary’s certificate.
The company can then use the certificate to proceed with the legal and corporate formalities required to complete the capital increase.
What Documents Are Required?
The exact documentation depends on the legal form of the French company, the structure of the capital increase and the identity of the investors.
The file will generally include documents relating to:
- the French company and its registration;
- its articles of association;
- the corporate resolutions or draft resolutions relating to the capital increase;
- the subscription documents;
- the company’s directors or legal representatives;
- each individual or corporate subscriber;
- the ultimate beneficial owners (UBOs) of corporate subscribers;
- and, where required, the origin of the funds.
Additional documentation may be requested depending on the circumstances of the transaction.
What Documents Are Required from a Foreign Investor?
Where the subscriber is an individual residing outside France, appropriate identification documents must be provided.
Where the subscriber is a foreign company, the documentation may include:
- a recent official company registration document;
- the company’s constitutional documents;
- details of its registered office;
- the identity of its legal representative;
- evidence of the representative’s authority;
- information concerning the company’s ownership structure;
- and identification of its ultimate beneficial owners.
Depending on the country and the documents provided, a translation may also be required.
The precise documentation therefore varies according to the investor’s jurisdiction and corporate structure.
Can the Funds Be Transferred from Abroad?
Yes, subject to prior review and acceptance of the transaction.
The fact that the subscription funds originate from a foreign bank account does not, in itself, prevent the issuance of a depositary’s certificate in France.
However, the origin of the transfer must be identifiable and consistent with the investor named in the subscription documentation.
Foreign investors should therefore avoid transferring funds before the file has been reviewed and payment instructions have been provided.
The investor must also comply with any foreign exchange controls or other regulations applicable in the country from which the funds are transferred.
Does a Foreign Investor Need to Travel to France?
In many cases, no.
The documentation can be submitted remotely for preliminary review.
Once the file has been accepted, the investor can transfer the subscription funds in accordance with the payment instructions provided.
This makes the procedure particularly suitable for capital increases involving shareholders, companies or investors located outside France.
The investor does not generally need to travel to France solely for the purpose of depositing the subscription funds.
How Long Does It Take to Obtain the Depositary’s Certificate?
The processing time primarily depends on two factors:
the completeness of the documentation and the actual receipt of the funds.
Preparing the file before the transfer helps avoid delays caused by missing corporate or identification documents.
International transactions may require additional checks, particularly where the subscriber is a foreign company or where its ownership structure involves several corporate entities.
Providing the relevant documentation at an early stage therefore helps facilitate the process.
Obtaining a Depositary’s Certificate from Our French Notary Office
Chassaint & Cerclé Notaires, a notary office based in Paris, handles deposits of funds relating to share capital increases of French companies.
The procedure can be carried out remotely and our office can review transactions involving foreign shareholders, foreign companies and international investors.
The documentation is reviewed before payment instructions are provided, allowing any additional requirements to be identified before the funds are transferred.
Following receipt of the funds and completion of the required checks, the office can issue the depositary’s certificate required for the completion of the share capital increase.
Deposit the Funds for Your Share Capital Increase with a French Notary
Chassaint & Cerclé Notaires assists French companies with the deposit of funds for share capital increases and the issuance of the corresponding depositary’s certificate following receipt of the funds and approval of the file.
You can submit your request remotely, including where the capital increase involves foreign shareholders or international investors.
For further information about the procedure, required documents and submission of your file, please visit our dedicated share capital increase page, click here.
