The Contribution Auditor's Report in France: Content, Timing and Filing

The contribution auditor's report is the document in which an independent statutory auditor describes each contribution in kind, sets out the valuation methods used and concludes that the retained value is not overstated. It is appended to the articles of association at incorporation, or filed with the commercial court registry for a capital increase. The engagement takes one to three weeks in practice, with fees starting at EUR 1,200 excl. VAT at our firm.

When a French company receives a contribution in kind (a fonds de commerce, shares, equipment, a building, a receivable), the value recorded as capital does not rest on an observed market price: it rests on a declaration. The contribution auditor's report secures that declaration, for two audiences.

Third parties first: creditors and partners read the share capital as a pledge. An overvalued contribution artificially inflates that pledge. This is why the law imposes independent control in companies limited by shares, based on article L. 225-147 of the Commercial Code for capital increases.

Shareholders next: whoever contributes an overvalued asset takes a share of the capital at the expense of the others. The report objectifies the discussion between shareholders at the precise moment when it is most sensitive.

For an SARL, the reference text is article L. 223-9 of the Commercial Code; for an SAS, article L. 227-1 refers to the regime of companies limited by shares. In both forms, founders may unanimously waive the auditor at incorporation if no single asset exceeds EUR 30,000 and contributions in kind stay below half of the capital; the counterpart is heavy: they remain jointly liable for 5 years for the value they retained. The obligation and exemption cases are detailed in our contribution auditor guide and, form by form, in our article on the contribution auditor in an SAS or SARL.

There is no official form: each report is built by its signatory, who takes on liability. Professional practice has nonetheless stabilised a structure found in almost every file.

1. Context and appointment#

The report opens with the framework of the engagement: identity of the beneficiary company, transaction concerned (incorporation, capital increase), how the auditor was appointed (shareholders' decision or order of the president of the commercial court), and the applicable texts.

2. Description of each contribution#

Each contributed asset is precisely described: nature, origin of ownership, legal situation (is the asset free of any pledge?), and the terms of the contribution set out in the draft articles or the contribution agreement. A contribution of shares specifies the issuing company, the number of securities and the attached rights; a contribution of a fonds de commerce details the intangible and tangible items transferred.

3. Valuation methods used#

The auditor sets out the method or methods retained by the parties and those they applied to check them: earnings approach, comparables, net assets, professional scale depending on the asset. They state the data relied upon. To understand these methods in detail, our business valuation guide develops them with their conditions of use; for a contribution of shares to a holding company, our dedicated article on contributing shares to a holding covers the specifics.

4. Work performed#

The report describes what the auditor actually did: documents examined, interviews held, checks on ownership and value, experts consulted where relevant. This section is what separates a solid report from a rubber stamp; it is what a judge will read in any later dispute.

5. The conclusion#

The conclusion is calibrated by the texts: the auditor assesses, under their own liability, that the value of the contributions is not overstated. Where needed, the conclusion carries reservations or observations (for instance on a fragile valuation assumption or an unfulfilled condition).

This is the most misunderstood part of the mechanism. The contribution auditor does not certify that the retained value is the exact value of the asset, nor that the transaction is a good idea. The conclusion bears on non-overstatement: the value retained by the parties does not exceed what the work performed can justify.

Concretely, a contribution deliberately retained at a prudent value, below the valuation range, calls for no reservation. Conversely, a value at the top of a poorly documented range will trigger requests for justification, a reservation, or an adverse conclusion. Nor does the report replace a valuation agreed between the parties: it controls it.

In practice the full engagement (document collection, work performed, drafting, signature) takes one to three weeks depending on the complexity of the contribution and the quality of the file provided. The report's circuit then depends on the transaction:

• Incorporation: the report is appended to the articles of association, which each founder signs in full knowledge.
• Capital increase: the report is filed with the commercial court registry and made available to shareholders before the meeting that votes on the contribution.

The deal timetable must therefore build in the auditor's engagement upstream: a report signed the day before the meeting is the symptom of a poorly prepared file. The list of documents to gather is in our article on the documentation for a contribution audit engagement.

Searching for a "contribution auditor report template" is common, and understandably so: formality reassures. But it rests on a misunderstanding. The report is not a form to fill in: it is the written expression of work actually performed by a registered professional, who takes on civil and disciplinary liability by signing.

A generic template mechanically produces reports whose "work performed" section corresponds to nothing, and whose conclusion is unsupported. If difficulties arise later (a shareholder dispute, insolvency proceedings, a tax audit on the contribution value), it is precisely the match between the described work and the real work that will be examined. The structure described above is a reading grid, not a template to copy: each contribution commands its own checks.

Fees follow the complexity of the contribution: nature of the asset, quality of the documentation, number of contributions, requested timing. At our firm, a contribution audit engagement starts at EUR 1,200 excl. VAT for a simple transaction. The quote is issued before the engagement letter, based on the draft transaction and the available documents. The full engagement, timing and frequent questions are on our contribution auditor in Paris page.

The contribution auditor's report is often experienced as a formality that slows the deal down. On the firm's files, the opposite proves true: a well-prepared report speeds up what follows. It locks in a reasoned value at the moment when everyone still agrees, it protects minority shareholders, and it stands as the reference document the day the tax authority questions the contribution value.

Samuel Hayot, chartered accountant and statutory auditor registered with the CNCC, signs these reports for incorporations and capital increases. The best advice fits in one sentence: come with a documented file (ownership titles, accounts, valuation elements), and the engagement will land at the low end of both the timing and the fee range.