Capital increase: procedure and pitfalls to avoid (2026)

Capital increase: procedure and pitfalls to avoid (SAS/SARL, 2026)

Raising funds or bringing in an investor often involves a capital increase. In France, the transaction is tightly regulated (collective decisions, deposits, notices, registrations) and differs between an SAS and an SARL. Here is a step-by-step procedure, a lawyer’s points to watch and a 2026 checklist to avoid court-registry rejections and shareholder disputes.

When should you increase capital (and when should you avoid it)?

• Fund growth (recruitment, R&D, go-to-market) or strengthen equity to obtain bank financing.
• Bring in an investor (seed, Series A) with a suitable term sheet and shareholders’ agreement. On negotiating entry terms, reread our term sheet guide.
• Restructure liabilities through debt set-off (shareholder current accounts).

Alternatives to assess before opening up the share capital: BSA-AIR and convertible notes (faster, deferred dilution) or bonds. Also consider the impact on founder dilution.

The 4 methods of increasing capital (SAS/SARL)

1) Cash contributions

New funds paid by subscribers. The amounts are deposited in a blocked account (bank, notary, Caisse des Dépôts), which issues a depositary’s certificate. The transaction must be completed and formally recorded within a statutory period, otherwise it may be invalidated. The basic rules are set out in the Code de commerce (subsection on capital increases) and the section on changes to share capital.

2) Contributions in kind

Assets (software, equipment, securities, business goodwill). In principle, a contributions auditor (commissaire aux apports) values the assets, with a possible exemption subject to conditions (no contribution > €30,000 and total contributions in kind < 50% of capital). See Bpifrance Création – Capital increases.

3) Debt set-off

Conversion of debts that are certain, liquid and due (e.g. shareholder current accounts) into new shares. Very useful for strengthening the balance sheet, subject to proving the debt and applying preferential subscription right (DPS) rules where applicable.

4) Capitalisation of reserves/profits/premiums

A “free” increase for existing shareholders (creation of bonus shares or an increase in nominal value). The instrument must be registered but is exempt from fixed duty according to impots.gouv – Capital increases.

An 8-step procedure (SAS/SARL)

Step 1 — Check the articles and shareholders’ agreement

• Clauses on approval and pre-emption (SAS), issue arrangements, preference shares.
• Preferential subscription rights (DPS): apply in principle in an SAS (unless validly disapplied) and are governed by the Code de commerce for joint-stock companies; in an SARL, shareholders’ priority rights may arise from legislation or the articles. Legal basis: Code de commerce – Capital increases.
• Align with your shareholders’ agreement (anti-dilution, information, vesting).

Step 2 — Officer’s report and draft resolutions

• Purpose, target amount, ceiling, share premium, timetable, DPS (retention/disapplication), indicative list of investors, dilution impacts (useful link: limiting dilution).

Step 3 — Shareholders’ framework decision

• An extraordinary general meeting (or the competent SAS body under the articles) authorises the increase, sets the terms (price, DPS, deadlines, type of contributions) and delegates authority if needed.
• Observe the notice periods in the articles and attach the officer’s report. References: Service‑Public Pro – Starting/Managing a business.

Step 4 — Subscription and deposit of funds

• Open subscriptions, obtain signed subscription forms and KYC identity evidence.
• Deposit cash contributions with a depositary (bank, notary, CDC) and obtain the depositary’s certificate. Deposit and completion must take place within a maximum period from authorisation, failing which invalidity and RCS irregularities may arise: see the Code de commerce and practitioner summaries from Entreprises & Droit.
• Contributions in kind: a contributions auditor’s report or an exemption under the Bpifrance conditions (link).

Step 5 — Subscriber list and allocation

• Prepare the subscriber list (identity, number of shares, amounts, contribution type) and the post-transaction cap table.

Step 6 — Final confirmation and amendment of the articles

• A second decision (extraordinary general meeting or officer’s decision if authorised in an SAS) records the increase, fixes the final number of shares, updates the articles and the share transfer/shareholder register.

Step 7 — Tax and RCS formalities

• Register with the business tax office (SIE) the minutes recording the increase: fixed duty of €375 (capital after the increase ≤ €225,000) or €500 (> €225,000). Free for capitalisation of reserves/profits/premiums. Official source: impots.gouv.
• Publish a legal notice in an authorised journal (mandatory information); then file through the single portal to update the RCS/Kbis (signed articles, minutes, deposit certificate, legal notice, contributions auditor’s report if applicable). References: Service‑Public Pro and Entreprises & Droit.

Step 8 — Post-closing

• Update the shareholders’ agreements, bank authorisations, beneficial ownership details and investor communications. For the overall fundraising documentation, read the legal steps in a seed round.

Real-life case: how overlooking DPS nearly derailed a Series A

In a recent matter, we advised a SaaS startup on its Series A: the increase was structured through debt set-off (current accounts) plus cash. The founders thought they could reserve the entire issue for the lead investors. However, their SAS articles retained DPS. The meeting notice specified neither exercise arrangements nor a waiver deadline. A minority shareholder threatened an action for invalidity. We rescued the transaction by arranging an express, individual waiver of DPS by all non-participating shareholders and adjusting the share premium to market valuation. The court registry accepted the filing, but a week was lost—and so was the bridging bank financing. The lesson: check DPS and the agreement before sending meeting notices.

Pitfalls to avoid (2026 risk checklist)

• Overlooking DPS (or disapplying them incorrectly): a classic ground for challenge. Basis: Code de commerce and SAS practice.
• Undervalued share premium: risk of reclassification as an abnormal benefit/abuse of majority power.
• No contributions auditor when required: the increase may be annulled. See Bpifrance.
• Non-compliant deposit of funds (missing depositary’s certificate or late deposit): registry irregularity, risk of invalidity.
• Non-compliant meeting notices (timing/content): procedural defect.
• Forgetting SIE registration and the legal notice: RCS rejection and penalties. Amounts and rules: impots.gouv.
• Mismatch between the agreement and articles (pre-emption, anti-dilution): a source of post-fundraising disputes. See our guide to shareholders’ agreements.

SAS versus SARL: differences that matter

• SAS flexibility: the articles set the competent body, delegations, existence/disapplication of DPS and meeting-notice arrangements. The basic regime refers to the joint-stock company rules in the Code de commerce.
• More formal SARL requirements: enhanced majorities to amend the articles, shareholder priority rights often provided for, and stricter meeting formalities. See the practitioner summary from Entreprises & Droit and the general framework for capital changes.

Documents to prepare

• Officer’s report and draft resolutions
• Subscription forms, subscriber list, cap table before/after
• Depositary’s certificate (cash), contributions auditor’s report (in kind) if required
• Framework minutes and completion minutes, updated articles
• Legal announcement, single-portal filing (RCS/Kbis), SIE registration according to impots.gouv
• Where applicable: shareholders’ agreement, investment agreement, term sheet

Timelines and costs (indicative 2026 figures)

• Timing: 2 to 6 weeks depending on the contributions auditor, meeting calendar and court registry.
• Tax charges: €375 or €500 (depending on post-transaction capital); €0 for capitalisation of reserves (impots.gouv).
• Legal notice: varies by département (indicative range: €150–250).
• RCS filing fees (single portal): current administrative fee schedule.
• Contributions auditor (if required): depends on complexity (asset valuation).

Tip: to safeguard key choices (DPS, share premium, timetable), compare your drafts with summaries of 2026 practice and the Service‑Public Pro framework.

Quick FAQ

Must the increase always be registered with the SIE?

Yes, the instrument recording the increase must be registered. Fixed duty: €375/500 depending on post-transaction capital, free for capitalisation of reserves (official source).

Can DPS be disapplied in an SAS?

Yes, if the decision follows the statutory and articles-based forms and conditions. Refer to the Code de commerce and your articles.

What is a realistic minimum timetable?

Preparation (1 week), framework extraordinary general meeting, subscriptions and deposits (1–2 weeks), completion extraordinary general meeting, SIE/legal notice/single-portal formalities (1–2 weeks): in practice, 3–5 weeks.

What errors block registry acceptance?

Missing depositary’s certificate, minutes not registered with the SIE where required, unsigned articles, incomplete legal notice, inconsistencies between the cap table and minutes.

2026 compliance checklist

• Reread articles/agreement (DPS, approval, delegations)
• Set price/premium, timetable and arrangements (cash/in kind/set-off/capitalisation)
• Make the framework decision with the officer’s report
• Open subscriptions and deposit funds (depositary’s certificate)
• Obtain the contributions auditor’s report (if in kind) or check exemptions
• Record the increase and update the articles
• Register with the SIE and publish the legal notice
• File through the single portal and update the cap table/Kbis

To prepare your investor-entry file, also consult the legal steps in fundraising and our practical advice on dilution and term sheets, as well as BSA‑AIR/convertible alternatives and updating the shareholders’ agreement.