Financing a company

There are different ways for a third-party lender or and/or a parent company to finance a French company :

• by a subscription for share capital and/or by loans, or

• by loan capital

The SA (Société Anonyme) can have a minimum capital of € 37,000 (unless specific exceptions). However, there is no prescribed minimum issued share capital for a SAS (Société par action simplifiée) or a SARL (Société a responsabilité limitée).

Shares issued by a SA or a SAS for cash purposes need only be paid up as to 1/2 on the day of the incorporation of the company and 1/4 when the capital is increased. For the SARL, 1/5 of the shares must be paid up on the day of incorporation. The balance will have to be paid within 5 years.

For a SA, shares may only be bought back in certain circumstances. For instance, if the SA is reducing its capital and the shares are being cancelled, or if the shares are being attributed to the employees of the company.

Only fully paid shares can be bought back and the company must have capital reserves (other than statutory reserves) amounting to at least the value of the shares to be acquired.

Redeemable shares are also available (certain limitations apply).

Except for certain specific industries, investments by non-French investors in France are not subject to any prior consent or approval.