Cash Contribution: Releasing Share Capital Step by Step

Quick answer. A cash contribution follows a precise chain: deposit the funds with a bank or a notary, release at least 20% of the capital for an SARL or 50% for an SAS, obtain the certificate of deposit, register the company, then unlock the funds against the Kbis extract. The balance must be called within a maximum of five years.

You have chosen your legal form, drafted your bylaws and found a name. One step that many founders underestimate remains: bringing the money into the company by the book. A cash contribution refers to any contribution of money to share capital, as opposed to a contribution in kind (an asset) or in skills. Its release is the actual payment of that money.

The law does not require you to pay the entire capital on day one. It sets a minimum, governs how the funds are held and imposes a timeline. Understanding this mechanism avoids three common mistakes we regularly see in formation files: a poorly documented deposit that blocks registration, under-released capital that prevents any later increase, and a forgotten balance that resurfaces five years later.

This sequence connects directly with the share capital amount and release rules we cover elsewhere: here we focus on the operational procedure, from the deposit account to the call of the balance.

The minimum fraction depends on the legal form. This is the first trade-off to settle, and it follows from your choice of legal structure.

For an SARL or an EURL, shares representing cash contributions must be released by at least one-fifth of their amount, i.e. 20% (Article L223-7 of the Commercial Code). For an SAS, an SASU or an SA, cash shares are released by at least half of their nominal value, i.e. 50% (Article L225-3 of the Commercial Code). The rules of the public limited company apply to the SAS by reference under Article L227-1.

The minimum capital remains set at 1 euro for an SARL, an EURL, an SAS or an SASU. But symbolic capital weakens banking credibility and financial soundness. If you are comparing share-based forms, our analysis of the pros and cons of the SASU sheds light beyond release alone.

Funds arising from cash contributions must be deposited with an authorised depositary. Since 1 June 2021, two options remain: a bank or a notary. The Caisse des dépôts et consignations no longer accepts these deposits.

The choice is not neutral. A traditional bank often requires an appointment and a complete file, which can lengthen the timeline. Professional neobanks open a deposit account within a few days: we frequently steer founders in a hurry towards an online deposit account opening, provided the bylaws are already drafted. A notary remains relevant when an authentic deed already frames the operation.

One procedural point is often overlooked: the depositary cannot hold the funds collected for a company being formed for more than eight days after receipt (Article L225-5 of the Commercial Code). This deadline protects contributors against the prolonged immobilisation of the sums.

The full procedure, from deposit to release#

1. Open a provisional deposit account in the name of the company being formed, with a bank or a notary.
2. Pay in the minimum required share: 20% for an SARL, 50% for an SAS.
3. Collect the certificate of deposit issued by the depositary.
4. Attach this certificate to the bylaws and file the package on the INPI single window.
5. Obtain registration with the trade and companies register and the Kbis extract.
6. Present the Kbis to the depositary to release the funds to the permanent account.
7. Schedule the call of the balance within the five-year legal deadline.

The certificate of deposit is the pivotal document of the procedure. The depositary issues it at the time of deposit and it conditions registration. Without it, the single window rejects the file.

It states the company name, the registered office address, the total amount deposited, the share paid by each partner, the place and date of deposit, as well as the depositary's stamp and signature. Check every line: an error in the split between partners flows into the bylaws and distorts the capitalisation table.

The funds remain unavailable as long as the company does not legally exist. Release occurs after registration, against the Kbis extract or the proof of registration with the national business register. The depositary then transfers the sums to the company's permanent bank account, which can start using them for its activity.

The logic is clear: capital is there to fund the launch, not to sit idle. A well-built forecast and financing plan anticipates exactly what this released capital will be used for, and avoids dormant cash.

Several situations alter how these rules apply.

A contribution in kind, for example a business goodwill or equipment, must be fully released as soon as the shares are issued. Above certain thresholds, it triggers a contribution auditor (commissaire aux apports). A contribution in cryptocurrencies follows this contribution-in-kind logic with a specific valuation.

A later capital increase obeys a strict rule: no subscription to a cash capital increase is possible while the previous capital has not been fully released, on pain of nullity (Article L223-7). If you wish to convert a partner advance into capital, read our piece on the capital increase by incorporation of the shareholder's current account.

A civil real-estate company (SCI) follows a distinct regime: capital release is free there unless the bylaws state otherwise, and a prior deposit is not systematic.

Three mistakes recur in the files we take over.

First mistake: releasing 100% of the capital without need. Paying in the full capital immediately ties up useful cash. Partial release is a perfectly legal flexibility lever.

Second mistake: forgetting to call the balance. Partly released capital appears on the liabilities side of the balance sheet in a subscribed-but-uncalled capital account. Five years later, that balance must be called. Partly released capital also penalises the tax deductibility of interest on a shareholder's current account, as we explain regarding the deductible rate on the shareholder's current account.

Third mistake: confusing a current-account advance with a capital contribution. Paying money into the shareholder's current account does not increase the capital and does not replace its release.

Our reading is simple: releasing capital is not just a banking formality, it is a financial-structuring decision. The amount released sends a signal to banks, investors and suppliers. Fully released capital of 1 euro inspires less confidence than capital of 10,000 euros released by 50%.

The underestimated risk concerns consistency with the forecast. We see founders set a high capital to reassure, then run short of cash because they released only the minimum. Conversely, capital that is too low limits access to credit in the very first months.

A director of a young consulting company recently came to us after releasing the full amount of a 30,000-euro capital, convinced it was mandatory. The result: frozen cash and a need for additional financing by the fourth month. As an SAS, he could have released only 15,000 euros at formation and spread the balance. We reorganised his financing plan and, for future contributions, opted for a staggered release. This is precisely the kind of trade-off we frame in our business formation support.

As chartered accountants registered with the Ordre and statutory auditors, we also secure higher-risk operations, such as contributions in kind subject to a contribution auditor, where valuation liability is at stake.

Hayot Expertise tip. Before setting the amount and the fraction to release, align these choices with your twelve-month cash forecast. Release what the company genuinely needs to start, keep the flexibility of calling the balance, and document each step to smooth registration. We validate this calibration with you before the deposit.