How to Raise Capital in a French SAS: Cash, Assets, Convertibles and Preference Shares

The routes to raise capital in a French SAS, at a glance

A French SAS can raise capital in four immediate ways: cash subscription, in-kind contribution, capitalisation of reserves, and capitalisation of shareholder loans. A fifth path is deferred: issuing securities — warrants (BSA), founder warrants (BSPCE), convertible bonds (OCA) — that turn into shares later, on the holder's exercise or conversion. Each method follows its own procedure, has its own use case, and creates its own cap-table effects. And a capital raise is about more than how much comes in: the new shares can be ordinary or preference shares (actions de préférence), with rights designed in the bylaws.

This guide ranks the methods by frequency, sets out the procedural rules that apply to each, and covers the decision framework, the pre-emptive subscription right, the deferred instruments, the preference-share machinery with the commissaire aux avantages particuliers, the mandatory employee share-offer resolution, the delegation options to the president, and the realisation deadline.

The four immediate ways to raise capital in a French SAS

Capital raises in a French SAS fall into four buckets.

Cash subscription (apport en numéraire) — new investors or existing shareholders pay cash; new shares are issued against the cash. The most common method, used in seed rounds, follow-on funding, and family-and-friends investments.

In-kind contribution (apport en nature) — a shareholder transfers ownership of an asset to the company in exchange for shares. Used to bring an operating asset (equipment, IP, real estate, fonds de commerce) onto the company's balance sheet without a cash transaction.

Capitalisation of reserves — accumulated reserves on the balance sheet (retained earnings, share-issue premium, statutory or other reserves) are reclassified into share capital. No new cash, no new asset; the equity structure is rearranged.

Capitalisation of shareholder loans (compensation with claims) — a liquid and due claim a shareholder holds against the company is set off against a subscription. The loan is extinguished; the shareholder receives shares of the same value. The company's debt falls and its equity rises by the same amount.

The four methods are not mutually exclusive. A single capital raise can combine cash from new investors, in-kind contributions from a founder, capitalisation of part of the retained earnings, and set-off of a shareholder loan, all in the same shareholder decision. The procedural rules below apply to whichever combination the founders choose. On top of the four, the deferred route — securities giving access to the capital — sets up future increases that happen on the instrument's own schedule (see below).

Cash capital raise in a French SAS

Cash subscription is the most common method. One precondition frames every cash raise: the existing capital must be fully paid up before any new shares to be subscribed in cash can be issued (C. com. Art. L 225-131). A company whose founders half-paid the incorporation capital must call and collect the balance before raising new cash. The mechanics are then:

The shareholders take a décision collective approving the capital increase, fixing the amount, the par value of the new shares, the issue premium (where applicable), and the conditions of subscription — deciding on a report from the president setting out the reasons for the increase and the state of the business (C. com. Art. R 225-113); the case law takes this report seriously, and a capital increase decided without it has been annulled.

The new shares are subscribed by the existing shareholders (using their pre-emptive subscription right) or by designated investors (where the pre-emptive right is suppressed). Each subscriber signs a subscription form (bulletin de souscription) stating the number of shares taken.

The subscribers pay at least one quarter of the par value of the cash-subscribed shares (25 %) on subscription. The balance is called by the president in one or more instalments within five years of the day of the capital increase (C. com. Art. L 225-144). The issue premium, where applicable, is paid in full on subscription — only the par value can be paid in instalments. One exception: shares issued partly against cash and partly against a capitalisation of reserves or premium must be fully paid on subscription (C. com. Art. L 228-7).

The cash sits at the depositary — a notary or an authorised financial institution — until the registry filing is complete. The depositary issues a certificate listing each subscriber, the number of shares subscribed, and the amount paid, on presentation of the subscription forms (C. com. Art. L 225-146).

The capital increase is filed at the Guichet unique with the bylaws amendment, the depositary's certificate, the legal-notice publication, and any commissaire aux apports report (where in-kind contributions are part of the package).

Once the filing is complete, the K-bis is updated to reflect the new capital figure, and the funds at the depositary are released to the company.

The procedure runs three to four weeks for a clean file, longer where in-kind contributions require an outside valuer or where the shareholder approval requires multiple meetings.

Plan the day-one payment on your capital raise

Enter the par-value amount of the increase and any premium, and see the minimum to pay on subscription and the balance the president can call over five years.

In-kind capital raise in a French SAS: assets in lieu of cash

An in-kind contribution at capital increase follows the same general framework as at incorporation, with procedural refinements of its own (C. com. Art. L 225-147).

The valuer is required in principle. At a capital increase, the in-kind contribution must be appraised by a commissaire aux apports whatever the amounts — on the prevailing analysis, the €30,000 / half-capital unanimous waiver available at incorporation does not apply at this stage. The valuer is appointed unanimously by the shareholders or, failing unanimity, by the court. Two statutory dispenses exist, decided by the president: recently market-priced listed securities and assets already valued at fair value by a valuer within the preceding six months.

The valuer's report is available eight days before the shareholder decision. The report is held at the registered office, at the shareholders' disposal, at least eight days before the collective decision on the capital increase (C. com. Art. R 225-136). This gives the shareholders time to study the report and raise any concerns before the vote.

A re-valuation may be triggered. Where the price of contributed listed securities has been affected by exceptional circumstances, or where new circumstances have changed the fair value of an asset materially, the contribution must be re-valued at the initiative and under the responsibility of the president; failing that, one or more shareholders representing at least 5 % of the capital can demand a fresh valuation by a commissaire aux apports (C. com. Art. L 225-147-1). The shareholders then deliberate on the value of the contributions.

In-kind contributions must be fully transferred to the company on the day of the capital increase — not in instalments; the shares issued against them are fully paid on issue. The asset enters the company's balance sheet at the agreed value; the contributor receives shares whose par value matches that value.

Where the shareholders adopt a value above the valuer's view, they deliberate under their own responsibility: the valuation can be disputed and the deliberations challenged — a valuation adopted on the report of a valuer who lacked independence has been annulled outright. In practice, a value above the valuer's view is rarely adopted; the contribution is renegotiated instead.

Capitalising reserves: a non-cash capital raise in a French SAS

A capital increase by incorporation of reserves takes accumulated equity that already sits on the balance sheet and reclassifies it into share capital. No new cash flows in; no new asset is contributed; the company's total equity stays the same. What changes is the breakdown — share capital rises, reserves fall by the same amount.

The reserves available for capitalisation include, in principle, every reserve on the balance sheet:

• the statutory legal reserve (réserve légale);
• the optional reserves (réserves facultatives and réserves statutaires) the company has built up;
• the revaluation reserve, the share-issue premium (prime d'émission) and merger premium carried over from previous operations;
• retained earnings (report à nouveau) and prior-year profits not yet distributed.

One reserve is off-limits: the special profit-sharing reserve (réserve spéciale de participation), which represents a claim of the employees against the company, cannot be capitalised.

The mechanism has two practical uses.

Improving the company's perceived solidity. A larger share capital figure is read as a stronger commitment by counterparties. A company that has accumulated reserves can capitalise some or all of them to lift the K-bis figure without raising fresh cash.

Distributing equity to shareholders without distributing cash. The capitalisation is implemented either by issuing new shares to the existing shareholders pro-rata to their holdings, or by raising the par value of the existing shares. Raising the par value by capitalisation of reserves does not require unanimity; raising it by any other route does (C. com. Art. L 225-130). Either way, each shareholder's proportion is unchanged — the operation rearranges equity, it does not dilute.

The procedure is light: a décision collective of the shareholders, a bylaws amendment, a registry filing, and a legal notice. No depositary is involved (no cash flows). No commissaire aux apports is involved (no in-kind contribution). The bylaws freely fix the quorum and majority for the decision, and the registration duty on an incorporation of reserves is free of charge (CGI Art. 812).

The capitalisation of reserves does not displace the pre-emptive subscription right of existing shareholders — by definition, the new shares are allocated pro-rata to existing holdings, so the right is satisfied.

Capitalising shareholder loans: turning debt into equity in a French SAS

Where a shareholder has lent money to the company through a current account or under a separate loan agreement, the loan can be capitalised at the next capital increase. The mechanism is libération par compensation: the shareholder's claim is set off against the subscription price of the new shares (C. com. Art. L 225-128). The loan is extinguished; the company's debt to the shareholder falls to zero; the shareholder receives shares of the same value.

For the set-off to operate at a capital increase, the claim must be:

• liquid — the amount is fixed and certain;
• due — the claim is not subject to a future event or to a deferral;
• certain — the company recognises the claim in its books.

A claim that meets the conditions can be set off without cash moving at all. The cash held by the shareholder before the capital raise stays with the shareholder; the cash held by the company stays with the company; the claim disappears and the shares are issued.

The paperwork runs in two steps. First, the claim is recorded in a statement of account (arrêté de comptes) drawn up by the president — and certified exact by the company's statutory auditor where one is appointed (C. com. Art. R 225-134); an SAS without a statutory auditor is dispensed from the certification. Second, the payment-by-set-off itself is recorded in a certificate issued by a notary or by a statutory auditor, which stands in for the depositary's certificate — and for this certificate, an SAS without an auditor must appoint one specifically (C. com. Art. L 225-146, al. 2), unless it routes the formality through a notary.

Capitalising shareholder loans is treated as a cash contribution. The one-quarter libération rule applies, but in practice it is automatically satisfied because the entire claim is set off in one go.

The mechanism is useful in three situations:

Cleaning up a balance sheet before a fundraise. New investors prefer to invest into a company with low or zero shareholder debt; capitalising existing loans before the round simplifies the cap table and removes a layer of subordinated claims.

Restructuring a distressed company. Where the company is approaching the loss-of-half-capital threshold or is already past it, capitalising shareholder loans reduces debt and rebuilds equity. This is often part of a broader recapitalisation alongside a cash injection.

Tax efficiency for the shareholder. In specific circumstances, converting a loan into equity can produce a more favourable tax position than repayment of the loan plus a fresh cash subscription. The tax analysis should be run with the company's tax adviser before the operation is structured.

Deferred capital increases: BSA, BSPCE and convertible bonds in a French SAS

Not every capital increase happens on the day the shareholders decide. A French SAS can issue securities giving access to the capital (valeurs mobilières donnant accès au capital) — instruments that convert into shares later, on the holder's initiative or on a trigger event (C. com. Arts. L 228-91 to L 228-106). The share issue then happens on the instrument's own schedule, outside the five-year realisation deadline and outside the employee share-offer resolution.

Warrants (BSA — bons de souscription d'actions). A BSA gives its holder the right to subscribe shares at a price fixed at issuance, during a defined exercise window. BSA are the building block of investor ratchets, advisor equity packages, and bridge-round sweeteners (the BSA-AIR structure used in French pre-seed practice is built on them).

Convertible bonds (OCA — obligations convertibles en actions). An OCA is debt that converts into shares on defined terms. Until conversion, the instrument remains a bond and the bond regime applies to it — the Cour de cassation has confirmed the point (Cass. com. 18 September 2024, n° 22-23054) — including the rule that a company must have two balance sheets approved by its shareholders before issuing bonds — failing which a prior verification of its assets and liabilities must be carried out. Convertible structures are the standard instrument of French venture debt and of many bridge rounds.

Founder warrants (BSPCE — bons de souscription de parts de créateur d'entreprise). The BSPCE is a tax-favoured warrant reserved to companies that meet the conditions of Art. 163 bis G of the CGI: registered for less than fifteen years, subject to French corporate income tax, with at least 25 % of the capital held directly and continuously by individuals (or by entities themselves at least 75 % held by individuals). The bons are granted to employees and to executives subject to the employee tax regime; they are non-transferable; the exercise price is fixed definitively at grant — and where the company has run a capital increase in the six months before the grant, the exercise price must in principle be at least the issue price of that round. The collective decision fixes the exercise window, on a report from the president and a special report from the statutory auditor where the company has one. For grants subscribed since 1 January 2025, the tax regime distinguishes the exercise gain from the sale gain, each with its own treatment (Loi 2025-127 of 14 February 2025) — a point to check with the beneficiary's tax adviser before granting.

Three rules frame all deferred instruments in an SAS:

• The issue is decided by the shareholders competent for capital increases, in the forms the bylaws set — the ANSA accepts a decision by written instrument signed by all shareholders — on a report from the president, with a special report from the statutory auditor where the company has one (C. com. Art. L 228-92). The decision to issue carries automatic waiver, by the existing shareholders, of their pre-emptive right to the shares the instruments will produce (C. com. Art. L 225-132); for BSPCE, the shareholders expressly renounce their pre-emptive right on the bons so that only the named beneficiaries can receive them.
• The holders are protected as a group. Holders of the same instrument form a statutory masse organised like a bondholders' group (C. com. Art. L 228-103). From the issue date, the company can no longer change its form or corporate purpose, change its profit-distribution rules, amortise its capital, or create preference shares altering the profit rules, unless the operation is authorised — with measures preserving the holders' rights — under the issue contract or by the holders' assembly (C. com. Arts. L 228-98 and L 228-99). Any bylaws-level restructuring in a company with convertibles or warrants outstanding must be checked against these locks.
• The instrument governs the timing. The capital increase resulting from exercise or conversion is not subject to the five-year realisation deadline, and it does not trigger the employee share-offer resolution — the resolution obligation attaches to the decision to issue the instruments, not to their later exercise.

For a founder team, the practical lesson is sequencing: the dilution from deferred instruments is decided years before it lands on the cap table. Every BSA, BSPCE pool, and OCA tranche should be sized against the fully diluted table, not the current one.

Raising capital with preference shares in a French SAS

The shares issued at a capital raise need not be ordinary. A French SAS can issue preference shares (actions de préférence) — shares carrying rights that differ from the ordinary shares, in either direction (C. com. Art. L 228-11). Investor rounds routinely use them: a liquidation preference, a priority dividend, reinforced information rights, a board seat, a veto on defined decisions.

The rights live in the bylaws. Preference shares must be provided for in the bylaws, with the rights attached to them stated (C. com. Art. L 228-11); the bylaws also, in most configurations, name the beneficiaries (C. com. Art. R 224-2). The rights can be financial — a priority dividend charged first against distributable profits, a higher distribution key, a cumulative right carried to later years — within two limits: no clause may strip the other shareholders of any right to profits (the léonin prohibition, C. civ. Art. 1844-1), and no dividend of any kind can be paid without distributable profits; fixed-interest clauses are prohibited (C. com. Art. L 232-15). The rights can also be non-financial: reinforced information, prior consultation amounting in practice to a veto, a seat on a governance body, or a transfer regime of their own.

Voting can be tuned — with one ceiling. The SAS can attach multiple votes to preference shares, or none. Non-voting preference shares cannot represent more than half of the capital (C. com. Art. L 228-11, al. 3); an issue that crosses the line can be annulled, though the nullity is at the court's discretion. Only shares deprived of all voting rights count toward the ceiling — shares with even a derisory vote sit outside it (Cass. com. 13 March 2024, n° 22-12205).

The commissaire aux avantages particuliers. Where preference shares are issued to named persons — shareholders or, since the 2019 reform, third parties — the special-benefits procedure of Art. L 228-15 applies. A commissaire aux avantages particuliers is appointed, unanimously by the shareholders or by the court, among auditors who have not worked for the company in the past three years. His report describes and appraises each special right, states the valuation method where the rights call for one, and is held at the registered office at the shareholders' disposal at least eight days before the decision — a period the shareholders can shorten by unanimous prior written consent (C. com. Art. R 225-136). The bylaws must record the beneficiaries' identity and the nature of the special benefits. An omission can be regularised by a later bylaws amendment, but collective decisions taken before the regularisation are exposed to annulment (Cass. com. 13 March 2024, n° 22-12205).

Timing changes the machinery. At a capital increase, the appraisal of the special benefits is mandatory (C. com. Art. L 225-147). At incorporation, the appointment of a valuer is no longer compulsory since the 2019 reform — but the ANSA considers the company still bound to appoint one where preference shares go to named founders under L 228-15. And where the issue is of a category of preference shares already created, carrying identical rights, the special-benefits appraisal is folded into a special report of the statutory auditor instead (C. com. Art. L 228-15, al. 3).

The decision and the DPS. The shareholders alone decide the issue and the conversion of preference shares, on a special report of the statutory auditor where the company has one (C. com. Art. L 228-12); powers can be delegated to the president. Where the issue is reserved to named persons, the pre-emptive right of the other shareholders must be suppressed, with the auditor's special report — and here, an SAS without an auditor must appoint one specially (C. com. Art. L 225-138). Note also the mirror rule: preference shares carrying a limited right to dividends, reserves, or liquidation proceeds are deprived of the pre-emptive subscription right on cash increases, unless the bylaws say otherwise (C. com. Art. L 228-11, last al.).

The holders of a class are protected as a class. Whether the SA-style special assembly is mandatory in an SAS is debated — the safer drafting organises the consultation of the class in the bylaws, so that decisions modifying the class rights run through a mechanism the company controls. Preference shares can also be made redeemable or convertible into ordinary shares or another class, on the terms the bylaws set — the standard exit design in investor documentation.

Who decides on a capital raise in a French SAS

A capital increase is one of the matters reserved to the collective decision of the shareholders. The bylaws set the form of the decision (meeting, written consent, signed instrument), the quorum (where one applies), and the majority required.

The shareholders can either decide the capital increase themselves or delegate to the president, in two distinct forms.

Delegation of authority (délégation de pouvoirs). The shareholders decide the capital increase in principle and delegate to the president the power to fix the modalities — the dates of opening and closing of the subscription period, the allocation of shares between subscribers, the recording of the subscriptions and payments (C. com. Art. L 225-129-1). The shareholders retain the substantive decision; the president runs the execution.

Delegation of competence (délégation de compétence). The shareholders authorise the president to decide both the principle and the modalities of one or more capital increases within a defined cap and during a defined period (C. com. Art. L 225-129-2). The cap (a maximum aggregate amount) and the period (no more than 26 months) are fixed in the shareholder decision. Within those bounds, the president runs subsequent capital increases without returning to the shareholders for each one — and constates each increase and amends the bylaws accordingly.

The delegation of competence is the more flexible tool — useful where the company expects multiple capital movements over the next two years and wants to avoid convening shareholders each time. The delegation of authority sits closer to the traditional shareholder-decision pattern. In both forms, the president reports back: a complementary report describing the definitive conditions of each operation is presented to the shareholders at the collective decision that follows the raise (C. com. Art. R 225-116).

A delegation can be limited to a defined type of securities, and the president can use it in whole or in part. A new delegation with the same object deprives any earlier one of effect. A delegation that has not been used by its deadline lapses; any subsequent capital increase requires a fresh shareholder decision.

The pre-emptive subscription right (DPS) on a French SAS capital raise

Existing shareholders have a pre-emptive subscription right (droit préférentiel de souscription — DPS) on every cash capital increase (C. com. Art. L 225-132) — provided their existing shares are fully paid up. The right entitles each shareholder to subscribe new shares pro-rata to their existing holding, before the issue is opened to non-shareholders.

The right has two layers:

The irreducible right (droit à titre irréductible). Each existing shareholder can subscribe new shares up to their pro-rata share of the issue. A shareholder holding 30 % of the existing shares can subscribe 30 % of the new shares as a matter of right.

The reducible right (droit à titre réductible). Where existing shareholders have not used all of their irreducible right, the unsubscribed shares are allocated to existing shareholders who asked to subscribe more than their pro-rata share, in proportion to their rights and within their demands. The reducible right operates only where an express decision installs it (C. com. Art. L 225-133).

The shareholders are notified of the new issue by registered letter reproducing the required mentions (C. com. Art. R 225-120). The notification opens a subscription window of at least five trading days from the opening of the subscription (C. com. Art. L 225-141); the window closes early once the issue is fully subscribed and the non-subscribing shareholders have renounced individually. A shareholder who wishes not to subscribe can renounce the right, individually, by registered letter to the company (C. com. Art. R 225-122).

A shareholder who renounces individually can do so:

• without designating a beneficiary — the unsubscribed shares increase the pool for the reducible right (where it operates) or fall to the other shareholders or the new entrants;
• in favour of a designated beneficiary — the right passes to the named person, whose acceptance accompanies the renunciation.

Some decisions carry an automatic renunciation by operation of law: the conversion of preference shares, the issue of securities giving access to the capital, the grant of free shares, and the approval of a merger by the absorbing company's shareholders (C. com. Art. L 225-132).

The pre-emptive right protects existing shareholders against unwanted dilution. Founders who want to control the cap table during a fundraise should look carefully at the DPS rules — and at the conditions for suppressing the right where a specific investor is to be brought in.

Suppressing the DPS for a designated investor in a French SAS capital raise

Where the company wants to reserve a capital increase to one or more designated investors — a venture capital fund, a strategic partner, a lead investor — the pre-emptive right of existing shareholders must be suppressed (C. com. Art. L 225-138). The procedure is more demanding than an ordinary capital increase.

The suppression is decided by the décision collective that authorises the capital increase. The decision must:

• name the designated investors (or describe the category of beneficiaries by its characteristics);
• exclude the designated investors from voting on the suppression of the right where they are existing shareholders — their shares are deducted from the quorum and majority computation (C. com. Art. L 225-138);
• be taken on a report from the president that states the reasons and maximum amount of the increase, the reasons and mechanics of the suppression, the issue price or its fixation method, and the impact on existing shareholders and holders of securities giving access to capital (C. com. Arts. R 225-114 and R 225-115) — with an interim financial statement where the raise comes more than six months after the last year-end;
• be taken on a special report from the company's statutory auditor on the price conditions — and where the SAS has no statutory auditor, one is appointed specially for the operation (C. com. Art. L 225-138, II).

A word on the auditor's involvement more generally: where the suppression is not in favour of designated beneficiaries — a delegation to the president, or a suppression without named recipients — an SAS without a statutory auditor is not required to appoint one (C. com. Art. L 225-135); the special report is due only where an auditor exists. The one-off appointment obligation attaches to increases reserved to named persons or to a defined category of persons (C. com. Art. L 225-138, II).

The cap on the delegation is reduced to 18 months when the pre-emptive right is suppressed for designated investors (C. com. Art. L 225-138, III).

The price at which the shares are issued — the issue price, including any premium — is set at a level that protects existing shareholders against dilution at a discount. Where the issue is at a price materially below the company's actual value, the dilutive effect can be read by the courts as a breach of the existing shareholders' rights. Founders running a suppression should align the issue price with a defensible valuation reference. A collective renunciation staged during the decision itself, to dodge the suppression procedure, is a known temptation — and one the texts do not permit: individual renunciation only operates after the subscription period has opened, and a collective workaround risks being read as a fraud on the procedure.

Suppressing the DPS for designated investors is the standard route at every fundraise involving a lead investor. The procedure is procedural overhead but is well established; counsel runs it routinely.

The mandatory employee share-offer resolution on a French SAS cash capital raise

Every decision to increase the capital in cash, in an SAS that has employees, must put a separate resolution to the vote: a proposal to carry out a capital increase reserved for the company's employees under the conditions of Arts. L 3332-18 to L 3332-24 of the Code du travail (C. com. Art. L 225-129-6). The resolution is mandatory even where the shareholders know they will reject the proposal, and it is also due when the shareholders delegate their competence to the president.

The resolution is a separate vote from the capital-increase decision itself. The shareholders consider the proposal, vote on it, and record the result. Where the proposal is rejected — as it usually is in closely held SAS without an employee-equity scheme — the capital increase proceeds.

The obligation does not apply when the capital increase results from the prior issuance of securities giving access to the capital (warrants, convertible bonds, BSPCE). The exemption matters for companies that have layered convertible instruments into earlier rounds.

Failure to put the resolution to the vote historically voided the capital increase as of right; from 1 October 2025, under the reformed nullities regime (Ord. 2025-229 of 12 March 2025), the nullity is no longer automatic — the court applies a more searching review before voiding the operation (C. civ. Art. 1844-10, al. 3). The nullity action carries a short three-month limitation either way, but the start point changed with the reform: until 30 September 2025 it ran from the collective decision following the capital increase (former C. com. Art. L 235-9, al. 3); from 1 October 2025 it runs from the date the contested decision was taken — or, where the increase proceeded on a delegation, from the collective decision at which the report on the final conditions is disclosed (C. com. Art. L 225-149-4). The omission can in any case be regularised by a later collective decision on the omitted resolution alone (Cass. com. 28 November 2018, n° 16-28358). The change reduces some of the procedural fragility of past capital increases but does not remove the obligation itself.

The resolution is also, on the prevailing analysis, incompatible with the variable-capital regime, both for intercalary issues and for decisions to lift the capital autorisé. Variable-capital SAS therefore operate outside the L 225-129-6 obligation altogether.

A specific exemption applies inside groups: French subsidiaries that depend on a controlling parent, where the parent has put a group savings plan in place under L 3344-1 of the Code du travail, are exempt from the obligation. The parent handles the employee-equity question at group level; the subsidiary does not need to put the resolution to its own shareholders.

The realisation deadline for a French SAS capital raise

A capital increase decided by the shareholders must be realised within five years of the decision, or the decision lapses (C. com. Art. L 225-129). Realisation means the subscriptions are signed, the payments are made, the in-kind contributions are transferred, and the registration update is filed.

The five-year cap is reduced in two cases:

• to 26 months where the shareholders delegate competence to the president to decide on the capital increase (C. com. Art. L 225-129-2);
• to 18 months where the pre-emptive right is suppressed for designated investors (C. com. Art. L 225-138, III).

The five-year cap does not apply to capital increases that result from the exercise of rights attached to securities giving access to capital (warrants, convertibles), from the exercise of stock options, or from the definitive vesting of free shares. Those increases happen on the schedule of the underlying instrument and are not bound by the five-year deadline of the original authorisation.

The deadline matters for capital-management planning. A shareholder decision authorising a capital increase up to a defined cap is a useful flexibility tool, but only within the window the law allows. Founders should sequence shareholder decisions to align with the company's actual funding plan, not with arbitrary deadlines.

Which capital-raise method fits your situation?

Pick the situation closest to yours and see the method your raise follows — and the point to settle before the shareholder decision.

Frequently asked questions about raising capital in a French SAS

This article is for general information only and states French law as published in the sources available at the date shown above. It does not constitute legal advice. The right capital-raise structure for a French SAS depends on the company's funding needs, the existing shareholder dynamics, and the incoming investor profile. Always seek qualified legal advice before launching a capital raise in France.