Married Couples Funding an SCI : Consent rules and who becomes a shareholder

Married couples funding an SCI

When a married person funds an SCI (société civile immobilière), two questions that do not arise for a single founder come into play: whether the other spouse's consent is needed for the contribution, and whether that spouse becomes a shareholder. Both turn on the couple's matrimonial regime and on whether the money or property used is one spouse's own or belongs to the community. For a couple under the default community regime, contributing a community building requires both spouses' agreement on pain of nullity, and a spouse who contributes a community asset must formally warn the other, who can claim to become a shareholder for half the shares. Get either point wrong and the contribution can be annulled years later. This guide sets out the consent rules, the shareholder-status rules, the mandatory warning under Article 1832-2 of the Civil Code, and what happens if it is missed.

The subject is often overlooked because it sits at the join of two bodies of law - matrimonial property and company law - that most people meet only once. A spouse who assumes they can simply put community money into an SCI in their own name, without telling the other or without the other's consent where a building is involved, is exposed to a nullity action that can surface on a divorce or a death long afterwards. Doing it properly at the outset - the right consent, the right warning, the right mention in the deed - is what makes the contribution secure and settles who owns what.

Two questions for a married contributor: consent and shareholder status

Everything in this area flows from the couple's matrimonial regime. Under the default legal regime - the community of acquests, which applies to couples married in France without a marriage contract - assets acquired during the marriage are generally community property, and the rules below on consent and shareholder status are fully engaged. Under a regime of separation of property, by contrast, each spouse owns and manages their own assets, contributes alone from them, and the community-asset rules do not arise, though the protection of the family home applies to all couples whatever their regime. So the first thing to establish is the regime, because it decides which of the following rules apply.

For a couple in community, the two questions are distinct and both must be answered. The first is consent: whose agreement is needed for the contribution to be valid. The second is shareholder status: who ends up a member of the SCI, and what the other spouse's rights are over the shares. These are not the same question - a spouse may have to consent to a contribution without becoming a shareholder, and a spouse may become a shareholder without having funded anything personally. The sections that follow take them in turn, because a contribution can be perfectly consented to and still leave the shareholder position unsettled, or vice versa.

One reassurance is worth giving at the outset, because it is often misunderstood. Becoming a member of an SCI exposes the member to unlimited liability for the company's debts in proportion to their shares, and it might be thought that committing community assets to that risk needs the other spouse's consent as a guarantee would. It does not. The civil-company contract, which creates the member's subsidiary obligation to answer for the company's debts in proportion to their share, is not to be treated as a suretyship requiring the spouse's consent to bind community property (Cass. civ., 17 January 2006, no. 02-16595). So the spouse's consent is not needed merely because the membership exposes the community to the SCI's debts - the consent rules that follow are about the asset contributed, not about the liability assumed.

When your spouse's consent is required

Although each spouse in principle has the power to manage and dispose of community property alone, that freedom is more apparent than real in the matter of contributing assets to a company. The consent of both spouses is required, on pain of nullity, for the contribution of certain community assets. It is required in particular for the contribution of buildings, of non-negotiable shares (such as shares in an SCI or a SARL), and of corporeal movables whose disposal is subject to publicity, such as boats or aircraft (C. civ. Art. 1424). So a community-owned building cannot be contributed to an SCI by one spouse alone: both must consent, or the contribution is void.

Two further consent rules overlay this. The contribution of the rights that secure the family home, and of the furniture in it, requires both spouses' agreement whatever the matrimonial regime (C. civ. Art. 215) - a protection that applies even to a couple in separation of property, and that can block the contribution of a home to an SCI without both signatures. And where the spouses' marriage contract provides for a joint signature on acts of administration or disposal of certain assets, notably immovable ones, the contribution of those assets requires both signatures (C. civ. Art. 1503). Between them, these rules mean that the contribution of a home, or of any community building, to an SCI is a two-signature act.

By contrast, a spouse may act alone on the movable assets they hold individually. A spouse can, vis-à-vis a good-faith third party, carry out an act of administration or disposal on the movable property they hold individually (C. civ. Art. 222), so a contribution funded from money a spouse holds individually can be made by that spouse alone as against the company. But this power is narrower than it looks, because the shares acquired in return are community property (C. civ. Art. 1401), and money held in a spouse's bank account is presumed, between the spouses, to be community acquests (Cass. civ., 9 July 2008, no. 07-16545). So contributing "one's own" money from a personal account does not make the resulting shares personal - and it brings the shareholder-status question, considered next, squarely into play.

Own property or community property: who is the shareholder

Who becomes the shareholder depends on whether the asset contributed is a spouse's own property or community property. Where a spouse contributes their own property, the shares are theirs. If the asset is own property by nature - a building owned before the marriage or received by gift or inheritance - the shares received remain own property by real subrogation (C. civ. Arts. 1406 and 1407), and no re-employment declaration is needed for that result (Cass. civ., 21 November 1978, no. 76-13275). Where the contribution is of the spouse's own money, however, automatic subrogation does not apply: for the shares to be the contributing spouse's own property, a re-employment declaration must be made (C. civ. Art. 1434), failing which the shares are own property only if both spouses agree. In each of these own-property cases, only the contributing spouse is a shareholder.

Where the asset is community property, the position is different and rests on a distinction French law draws between the "title" and the "finance". Whatever the other spouse decides about becoming a member, the shares received in return for a contribution of a community asset enter the community for their patrimonial value, while the shareholder status remains personal to the contributor - the distinction of the title and the finance. The practical consequence is that a spouse who does not claim shareholder status is still entitled, on the dissolution of the community, to half the value of the shares, even if the shares themselves are attributed in kind to the member spouse. Attributing nominal shares to each spouse in the articles does not change this: dividing the capital so that half the shares are put in each spouse's name does not make those shares own property (Cass. civ., 4 June 2009, no. 08-15228).

This title-and-finance distinction is why the shareholder-status question has to be handled deliberately. The member spouse alone exercises the rights attached to the shares and alone can be pursued for the company's debts, but the value of the shares belongs to the community, so both spouses have a real economic interest in them. On a divorce, the member keeps the shareholder status and can dispose of the shares alone, but the shares are brought into the community for their value at the date of the partition, and dividends received during the post-community indivision accrue to the indivision. The couple therefore needs to settle, at the outset, who signs and, separately, who is to be a member - which is exactly what the Article 1832-2 warning is designed to bring to a head.

How are you funding the SCI as a married couple?

The consent and shareholder rules turn on the asset used. Pick your situation - the check shows what applies.

The warning your spouse must receive (Article 1832-2)

Because an SCI's shares are not negotiable and the company is marked by a strong personal character, French law imposes a specific protection where a spouse contributes a community asset. For companies whose shares are not negotiable - the SCI, and also the SNC, SARL and SCS - Article 1832-2 of the Civil Code requires the spouse who contributes a community asset, on pain of annulment of the contribution, to warn the other spouse and to record that warning in the contribution deed. The warning is a condition of validity, required in every case, and its absence from the deed is itself a cause of nullity.

Once warned, the spouse has three possible positions, and each has consequences. The spouse may claim shareholder status for half the shares subscribed with the community funds: if that intention is notified at the time of the contribution or acquisition, the acceptance or approval of the members counts for both spouses, so approving the member effectively brings the spouse in as a member for half the shares. The spouse may instead renounce: a spouse who declares in writing, referring to Article 1832-2, that they do not claim shareholder status cannot later change their mind (Cass. com., 12 January 1993, no. 90-21126), and a renunciation can even be tacit where the circumstances unequivocally establish it. Or the spouse may take no position, in which case they keep the right to notify the SCI, at any time, of their intention to be personally a member for half the shares subscribed with community funds - but a spouse who claims later must be approved under the statutory clauses and cannot rely on the contributor's own membership to escape that approval. That right to claim later runs until a divorce judgment has become final (Cass. com., 14 May 2013, no. 12-18103).

This is why the warning is best used to settle the position at the outset rather than leaving it open. If the couple want both to be members, the spouse claims at the time and is admitted with the contributor. If they want only one to be a member, the spouse renounces in writing, which is irrevocable and closes the question. Leaving the spouse undecided keeps a live claim hanging over the company for years, one that can surface on a divorce and force an approval decision at the worst possible moment. The choice is theirs, but it should be a made choice, recorded in the deed, not an omission.

Does your spouse become a shareholder?

A community-asset contribution puts the spouse's status in play. Pick the position - the check shows what follows.

If the warning is missed: nullity

The sanction for failing to warn the spouse is real and lasts a long time. The information duty must be complied with in every case, and where it is not, the non-warned spouse can seek annulment of the contribution within two years from the day they learned of it. That two-year window can open long after the event - the action can be brought even after the dissolution of the community, prescribing only two years after that dissolution (C. civ. Art. 1427). Separately, the absence from the contribution or purchase deed of the mention that the spouse was warned is itself a cause of nullity, so both the warning and its recording in the deed matter.

Nullity is not a mild consequence. It erases the contract retroactively, so a spouse who made a contribution in breach of Article 1832-2 must give back what they received in return for the contribution - the shares - and where returning them is impossible, an indemnity is owed instead (Cass. civ., 1re ch., 16 July 1998, no. 96-18404). For an SCI whose principal asset was contributed by one spouse without warning the other, an annulment years later can unwind the company's ownership of the property at a stroke, with all the disruption that implies for the members, the company's creditors and any transmission planned around it. This is a latent defect that a divorce or a death can bring to the surface.

The reassuring part is that the risk is entirely avoidable, and cheaply, at the time. Warning the spouse, recording the warning in the deed, and settling whether the spouse claims or renounces are simple steps that make the contribution secure and put the shareholder position beyond argument. Where a contribution has already been made without these steps, the position can usually be regularised, but it is far better to do it right at the outset than to discover the gap when the other spouse, or their heirs, raise it. For an international couple in particular, where one spouse may be less involved in the French purchase, the warning is not a formality to be skipped but the safeguard that protects the whole structure.

Funding an SCI as a married couple - at a glance

Frequently asked questions about married couples and an SCI

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. How the consent and shareholder rules apply depends on the couple's matrimonial regime and the assets used. Always seek qualified legal advice before funding an SCI with community or jointly held assets.