Spouses, Community Property and SARL Shares

Doing business with your spouse in France, or funding a company with money the marriage owns, changes the legal picture in ways founders rarely anticipate. Under a community-property regime, your spouse must be informed before you use community assets to subscribe shares - on pain of nullity - and can claim shareholder status over half of the shares you subscribed. Contributing a business or a building held in community requires you both to act together. And a spouse who works in the company must take one of three declared statuses, with the salaried one applying by default if nothing is declared. This guide covers the consents, the claim, the three statuses and the PACS rules.

Spouses and SARL shares: the baseline rules

Each spouse has full capacity to become a shareholder, and may contribute to a company the assets over which their matrimonial regime allows them to make acts of disposal. Where a spouse acts alone in relation to a movable asset they hold individually, they are deemed, as against third parties in good faith, to have the power to act alone (C. civ. Art. 222) - so a spouse can make a contribution in kind of movable or immovable property that belongs to them personally, without involving the other.

Two limits apply whatever the regime. The agreement of both spouses is indispensable for the contribution of rights securing the family home and the furniture in it (C. civ. Art. 215). And the family-affairs judge can prohibit a spouse who has gravely failed in their duties from making acts of disposal over their own assets or over community assets, movable or immovable, without the other's consent (C. civ. Art. 220-1); judicial measures are equally available where a spouse cannot express consent or refuses it without justification (C. civ. Arts. 217 and 219 for all regimes, Arts. 1426 and 1429 under the statutory community regime).

Two structural rules work in a couple's favour. Shares are freely transferable between spouses - the articles can usefully adapt the rules that apply in that case - and the articles can provide that, on a shareholder's death, the company continues with the surviving spouse. Both are drafting choices, examined in buying and selling shares in a French SARL and death, gift and pledge of SARL shares.

One useful protection completes the baseline: corporate rights received in exchange for a contribution in kind of a personal asset are automatically substituted into the contributing spouse's own personal estate. Contribute what is yours, and the shares stay yours.

Community property: the consents you cannot skip

Under a community regime the position is stricter, and it operates at two levels - the power to act, and the duty to inform.

Assets that require you both to act

Spouses cannot, one without the other, use certain community assets to make a contribution to a company: a community business or a community building are the standard cases (C. civ. Art. 1424). Where a spouse exceeds their powers over community assets, the other - unless they have ratified the act - can apply to annul it (C. civ. Art. 1427). That action excludes the unenforceability action available for fraudulent acts, which applies only where no other sanction exists.

When nullity is pronounced, the parties must be restored to the position they were in before the irregular contribution; where material restitution of what the spouse received is impossible, it is made by way of an indemnity.

The duty to inform - and the two-year nullity

Separately, a spouse cannot use community assets to make a contribution to a company, or to acquire non-negotiable shares, without the other spouse having been informed, and without evidence of it appearing in the deed (C. civ. Art. 1832-2). Failing that, the uninformed spouse can apply to annul the contribution within two years of the day they learned of the act - and no such action is admissible more than two years after the dissolution of the community.

In practice, the information results either from the spouse signing the articles, or from an attestation signed by them in which they renounce becoming a shareholder. Neither is a formality to improvise at the last minute: it is the document that keeps the company's capital structure stable.

Cash subscriptions have a lighter evidential regime. No justification has to be given at the time of a cash subscription: the shares can be paid up with cash held by the spouse, a cheque drawn on an account in their name, or community funds, under the presumption that each spouse may freely dispose of the funds they hold (C. civ. Art. 221). But the bank holding the funds can return them only to the person in whose name the deposit was made, or to the person designated to receive them. Against third parties in good faith, whether a spouse used personal or community funds to pay up their shares is irrelevant - whatever the legal nature of the funds under the matrimonial regime, the spouse is presumed to hold full powers over the money they hold, whether the contribution was made by cheque or in cash.

Your spouse's right to claim half the SARL shares

This is the rule that reshapes shareholder groups. Where community assets are contributed, shareholder status is in principle recognised only in the spouse who makes the contribution or the acquisition (C. civ. Art. 1832-2). But the status is also recognised, for half of the shares subscribed or acquired, in the spouse who notifies the company of their intention to be personally a shareholder. The claiming spouse does not have to demonstrate any real and serious intention to collaborate actively with the other shareholders in pursuing the corporate objects - the affectio societatis that would otherwise be required.

At the point of entry into the company, the spouse has three courses: renounce shareholder status definitively, claim it, or say nothing. The timing of the choice changes everything.

• Notification at the time of the contribution or acquisition: the acceptance or approval given by the shareholders counts for both spouses. The other shareholders take them as a pair.
• Notification later: the approval clauses in the articles are enforceable against the spouse. On the approval vote, the shareholder spouse does not take part, and their shares are excluded from the quorum and majority calculation.
• No information given at all: the contribution is void unless the spouse ratifies it, with the two-year time limits described above.

The case law fills in the practical detail. The presumption of community means the claiming spouse does not have to prove that the operation was carried out with community assets. A spouse who renounces clearly and without reservation cannot later go back on that decision - and renunciation can be tacit where the circumstances unequivocally establish an intention to renounce. A clause by which the spouse declares that they do not claim the attribution of half of the shares subscribed and renounces shareholder status goes beyond Article 1832-2 and amounts to a renunciation of the value of the shares themselves, which is a materially different bargain and should be signed knowingly. On divorce, the claim need not be notified before the divorce petition: it can be exercised until the divorce judgment becomes final. And where a spouse acts outside the limits of their powers, the applicable texts are Articles 1424 and 1427, not the provisions on fraudulent acts - the nullity action is subject to the two-year limitation alone.

One consequence of divorce is worth planning for. Where the subscribing spouse alone holds shareholder status, shares acquired during the marriage fall into the community only for their patrimonial value, and on the division they can be allocated only to the holder of the corporate rights. The company stays with the shareholder; the value is shared.

The practical lesson for a shareholder group is that a spouse’s position should be a decision, not an oversight. Where the founders want a closed group, the spouse signs a renunciation before the articles are signed and the point is closed. Where the couple intends the spouse to be a shareholder, notifying at the moment of the contribution is materially better than notifying later: the shareholders’ approval then covers both spouses in one act, instead of putting the spouse through an approval vote in which the shareholder spouse cannot participate and their shares do not count. Either way, the document belongs in the incorporation file - not in a drawer.

A spouse working in the SARL: the three statuses

Where the spouse, PACS partner or - since 1 January 2022 - the cohabiting partner of the manager of a SARL works in the business, they must opt for one of three statuses: collaborating spouse, employee spouse, or shareholder spouse (C. com. Art. L. 121-4). The choice must be declared when the company is registered. Where no declaration is made, a spouse who works in the business is deemed to have the employee status - which is a default with real cost consequences, not a neutral outcome. When declaring the status on the single-window portal, the spouse must supply a sworn attestation containing prescribed particulars identifying the manager and the business.

Collaborating spouse

This status is open to the spouse of the sole shareholder-manager of an EURL or of the majority shareholder-manager of a SARL. The shareholders must be informed of the choice at the first meeting following the recording of the status with the bodies registering the company. Since 1 January 2020 there is no longer any headcount condition to choose it - but since 1 January 2022 the status is temporary: the spouse cannot keep it for more than five years, counting all periods across all businesses. Beyond that, they must opt for the employee or the shareholder status, and failing an option they are deemed to have chosen employment (C. com. Art. L. 121-4). By way of exception, spouses who already held collaborating status on 1 January 2022 can keep it until the end of 2026, whatever the total period for which they have held it.

Employee spouse

Here the spouse carries on a regular activity in the SARL, remunerated under an employment contract with the company, fixed-term or open-ended. Unlike the collaborating status, this one can be kept with no time limit. It is also the status that applies by default where nothing is declared, which is why the declaration at registration deserves attention: an undeclared working spouse is treated as an employee, with the contract, payroll and contribution consequences that implies.

Shareholder spouse

Here the spouse holds shares in the SARL. Like the employee status, and unlike the collaborating one, it can be kept without limit of time. It is the status that follows naturally where the spouse has claimed status over half the shares under the community rules, and the one to consider deliberately where the collaborating status is running towards its five-year ceiling.

Two spouses as shareholders of the same SARL

Two spouses may be shareholders of the same SARL. Even where they use only community assets for the contributions or to acquire the shares, they may - alone or with others - be shareholders in the same company and take part, together or separately, in its management (C. civ. Art. 1832-1). There is no prohibition to work around: a couple can own and run a French SARL between them.

What deserves thought is the consequence for control. A two-spouse SARL is, by construction, a company whose shareholder group can be reshaped by a divorce - and where both spouses manage, the majority-management test that determines their social status looks at their combined holding. The interaction between marriage and majority is developed in gérant majoritaire vs minoritaire.

One clarification is worth stating plainly, because it surprises people: shareholder status is personal to the holder of the shares. An EURL formed by the contribution of a community business is not itself a community asset - the company is a distinct legal person, and the community's rights bear on the value of the shares, not on the company.

PACS partners and SARL shares

Civil partnership brings a different set of rules, and which set applies depends on when the partnership was concluded.

Partnerships from 1 January 2007: separation of property

The current regime is separation of property, so shares subscribed by one partner are in principle their own. Where the partnership agreement includes a clause submitting assets acquired after the agreement to joint ownership, the shares of the founding partner keep their personal character only if that partner files a declaration of employment of funds showing that the money either belonged to them before the partnership - a bank statement will do - or was received by gift or inheritance (C. civ. Art. 515-5-2).

The practical drill at incorporation follows from that. Where a founding shareholder is unmarried, it is worth having them declare their position regarding a civil partnership. If they are in one, ask for a copy of the agreement; if it predates 1 January 2007 - and therefore the joint-ownership regime - the partner should state whether it has been amended to bring it under the current regime. Reading the original or amended agreement tells you what regime governs the shares the founding partner is about to subscribe. Where both partners intend to become shareholders, the shares subscribed in both names will be jointly owned.

Approval clauses interact with this. The articles may provide an approval procedure for transfers between civil partners. Where a buyer of shares is in a civil partnership, two situations arise: either both partners want to be shareholders, in which case both must be approved, or only one comes forward, and approval is given to that partner alone.

Partnerships before 1 January 2007: presumed joint ownership

For partners who have not opted by amendment into the current regime, assets acquired for consideration after the partnership was concluded are presumed jointly owned in equal shares unless the acquisition or subscription deed provides otherwise. SARL shares acquired for consideration after the partnership are therefore jointly owned in halves unless the deed says otherwise - and the presumption applies even where the asset was acquired by one partner without the other's knowledge. Shares acquired before the partnership are outside it: the partner cannot claim joint rights in them.

Two consequences follow for contributions. Where the contribution bears on an asset already in joint ownership, the contributor must obtain the co-owner's agreement (C. civ. Art. 815-3). And where one partner alone makes the contribution, only that partner has shareholder status, even where the value of the shares is jointly owned with the other - the company contract rests on the intention to associate, and shareholders' rights are proportionate to their contributions (C. civ. Art. 1843-2); a partner who made no contribution cannot be a shareholder. Where both partners subscribe the contribution jointly, both have shareholder status and the shares received are jointly owned - which is exactly where the standard articles clause requiring joint owners to appoint a common representative for voting earns its place.

One further point on jointly held shares generally: the case law recognises shareholder status in co-owners of shares, with a restriction - they may exercise only the rights falling within the simple administration of the jointly held shares. And contributions for consideration made by one civil partner give the shares received a jointly owned character, with shareholder status attaching to the partner who made the contribution where the other has not claimed an intention to become a shareholder.

Jointly owned SARL shares: who votes, and who counts as a shareholder

Whenever two people end up holding shares together - spouses who both subscribe, civil partners under a joint-ownership regime, heirs before a division - the shares are jointly owned, and the company needs to know whose instructions it takes. The courts have recognised shareholder status in the co-owners of shares, with an important restriction: they may exercise only the rights falling within the simple administration of the jointly held shares. Anything beyond that requires them to act together.

The standard articles clause requiring joint owners to appoint a common representative for voting at meetings is what makes this workable, and it earns its place in any company where joint ownership is foreseeable. Without it, every vote becomes a negotiation between co-owners, and a company can find itself unable to pass ordinary resolutions because one indivisible block cannot instruct itself.

Two situations produce joint ownership predictably. Where both civil partners subscribe a contribution jointly, both hold shareholder status and the shares received are jointly owned. And contributions for consideration made by one civil partner give the shares received in exchange a jointly owned character - with shareholder status attaching to the partner who made the contribution, where the other has not claimed an intention to become a shareholder. Draft for it in advance; the alternative is discovering the problem at the first contested meeting.

Your matrimonial regime and the risk to the family's assets

The regime question runs the other way too - not what the marriage does to the company, but what the company does to the marriage's assets. For spouses married under a community regime, the whole of the community answers for the debts of either of them, with the exception of the other spouse's earnings and salary. Adopting another regime, such as separation of property, can isolate each spouse's estate more effectively - both the estate existing before the marriage and what each has built up during the shared life from their respective income in separate activities.

That matters most for the founder who will be asked to guarantee the company's borrowing, because the guarantee reaches whatever the regime exposes. It is also why lenders frequently ask the manager's spouse to guarantee as well - and why the proportionality protections examined in EURL vs SASU matter to couples in particular: a guarantee manifestly disproportionate to the guarantor's income and assets is cut back to what they could sensibly have committed to at signature.

The sensible sequence is to settle three things before the articles are signed: which assets fund the company and whose they are; whether the spouse claims, renounces or is brought in as a shareholder deliberately; and what the spouse's working status will be if they are involved in the business. All three are cheap to decide at incorporation and expensive to unpick later.

Frequently asked questions about spouses and French SARL shares

This article states general principles of French law as at its date of publication and is provided for information only. It does not constitute legal or tax advice and creates no lawyer-client relationship. Figures, rates and thresholds evolve; verify them against the texts in force before acting, and take advice on your specific situation.