Fixed or variable capital: which choice for your company

Quick answer. Fixed capital can only be changed by a meeting decision, an amendment of the articles and registry formalities. Variable capital, set by a variability clause (French Commercial Code art. L231-1 et seq.), lets partners enter or leave and the capital be adjusted between a floor and a ceiling, with no formality at each movement. It brings flexibility, but imposes a minimum floor, frames the withdrawal right, and requires a written method for valuing shares.

When forming a SARL, a SAS or an SCI, the choice between fixed and variable capital is often settled by ticking a box on a form, when it shapes for years how easily you will bring in an investor, let a partner leave, or adjust contributions. Variable capital remains poorly understood: neither better nor worse than fixed capital, simply suited to specific situations. This article walks through the decision criteria, the legal bounds and the pitfalls, updated for 2026, alongside the budget to anticipate in the real cost of forming a company.

Fixed capital is the regime of the vast majority of companies.

With fixed capital, the amount written into the articles is frozen. Any increase or reduction requires an extraordinary general meeting decision, an update of the articles, a legal notice and a registry filing. Bringing in a new partner through a capital increase, or organising a partner's exit, therefore requires a formal procedure, a cost and a delay at each operation.

This regime suits companies with a stable shareholding, where movements are rare and planned. It also offers maximum clarity for third parties: the capital shown at the registry matches reality exactly, which reassures banks and suppliers. It is, moreover, the only regime open to the public limited company (société anonyme), expressly excluded from variable capital by law.

Variable capital rests on a variability clause written into the articles. It is not a separate company form: it is a statutory option grafted onto a SARL, an EURL, a SAS, a SASU or an SCI.

Provided by articles L231-1 et seq. of the Commercial Code, it lets the capital vary, up or down, with no statutory amendment or publicity formality at each movement (art. L231-3). The clause sets two bounds: a floor capital, which cannot be lower than a tenth of the statutory capital nor below the legal minimum for the chosen form (art. L231-5), and an authorised ceiling. Between these two levels, partners enter, leave and adjust their contributions by simple decision, with no extraordinary meeting or registry each time.

Two constraints come with the option. First, the words "à capital variable" must appear on all documents intended for third parties (art. L231-2): quotes, invoices, letterhead. Second, the death, withdrawal or default of a partner does not trigger dissolution: the company continues by right among the remaining partners (art. L231-8), which secures business continuity.

This is the most frequent mistake we correct on these files: a poorly set floor.

The floor capital is the amount below which capital cannot fall through the recovery of contributions. The law caps it from below: it cannot be lower than a tenth of the statutory capital (art. L231-5). If you show a statutory capital of 50,000 euros, the floor cannot be set below 5,000 euros. The ceiling, in contrast, is freely chosen: it defines how high the capital can rise with no new formality. Setting too low a ceiling forces you to amend the articles as soon as a fundraising round exceeds it, which destroys the very benefit of the flexibility.

The thinking on the bounds connects to the choice of legal form: before opting for variable capital, the structure must be settled, which is prepared upstream of the procedure to set up a SAS or any other form.

Variable capital has trade-offs to factor in before signing.

Its advantages: flexibility of partner entry and exit, reduced formalities and registry costs at each movement, and a certain discretion, since variations between floor and ceiling do not systematically appear at the registry. Its trade-offs lie mainly in the withdrawal right. Article L231-6 provides that each partner may withdraw "unless otherwise agreed": withdrawal therefore exists by default, and the articles can frame it through procedural conditions (notice period, valuation conditions, timing restrictions), even framing it tightly through these terms. The withdrawal right itself, however, is a matter of public order (d'ordre public): the articles govern how and when it is exercised, they cannot suppress it. What also remains mandatory and cannot be avoided is the prohibition on falling below the floor through the recovery of contributions, and the liability of the departing partner, who remains bound for five years for commitments existing at their exit (art. L231-6).

A final sensitive point: the absence of an organised market for these shares complicates the valuation of shares at withdrawal. Without a written method, the redemption value becomes a classic source of dispute between partners.

Our view: a structuring tool, not a default setting#

In our formation and structuring files, we reserve variable capital for situations where the shareholding is genuinely set to move: a holding company driving a growing group, a cooperative structure, a company designed to take on partners as it recruits or raises funds. There, avoiding a meeting and a registry filing at each movement is a tangible saving of time and fees, year after year. It is also a question we often weigh alongside holding company taxation, when variable capital is used to let the capital of a group's parent breathe.

Conversely, for a classic company with two or three stable partners, fixed capital remains simpler, clearer and less risky: the flexibility of variable capital has no value if no one enters or leaves. Our rule of caution is constant: adopt variable capital only if you anticipate movements, and always write into the articles the terms of the withdrawal right and the method for valuing shares. It is this framing, not the clause itself, that secures the company, and it is precisely the work we carry out as part of support on business and director taxation, where the capital choice connects to remuneration and distribution trade-offs.

Founders consult us to set up a company intended to bring in new partners regularly as it develops, with entries hoped for each year. Under fixed capital, each arrival would have required an extraordinary general meeting, an amendment of the articles, a legal notice and a registry filing: a recurring cost of several hundred euros per operation and a delay each time.

We chose variable capital, with a statutory capital of 40,000 euros, a floor set at 4,000 euros (the minimum tenth) and a comfortable ceiling to absorb several years of entries. The result: new partners join the company by simple decision, with no registry formality, as long as the capital stays below the ceiling. Above all, we specified in the articles a withdrawal notice period, a formula for valuing the departing partner's shares, and a reminder of their five-year liability, to prevent a future exit from turning into a dispute over the redemption price.

In practice: securing a variable capital clause#

Variable capital is not reserved for formation: a fixed-capital company can adopt a variability clause during its life, by a meeting decision and an amendment of the articles. This switch is prepared like any statutory change, but once the clause is in place, later movements between floor and ceiling happen with no further formality. Before writing the clause, at formation or during the company's life, we systematically check these points:

• Confirm the chosen form admits variable capital: SARL, EURL, SAS, SASU, SCI yes; SA no (art. L231-1).
• Set a floor at least equal to a tenth of the statutory capital and never below the legal minimum of the form (art. L231-5).
• Calibrate the ceiling to cover several years of entries, to avoid re-formalising too soon.
• Write the terms of the withdrawal right: notice, conditions, any restrictions allowed by art. L231-6.
• Include a method for valuing the withdrawing partner's shares, to neutralise the risk of dispute.
• Add the "à capital variable" mention on all materials intended for third parties (art. L231-2).

A few mistakes recur in variable capital files set up too quickly.

• Believing the withdrawal right is fully removable: it is a matter of public order and cannot be suppressed; the articles only govern its procedural modalities (notice, valuation, timing), without erasing the principle (art. L231-6).
• Forgetting that the departing partner remains bound for five years for commitments prior to their exit: leaving does not clear the past.
• Setting a floor below a tenth of the statutory capital: the clause is then irregular.
• Trying to adopt variable capital in a public limited company: it is legally excluded, the form must be changed first.
• Neglecting the "à capital variable" mention on external documents: its absence clouds information for third parties and can be penalised.
• Leaving share valuation vague: with no written formula, each withdrawal reopens a negotiation, often a conflictual one.

The fixed or variable capital choice is prepared at the same moment as the form and the registered office, topics we handle together when comparing registered-office solutions, and which we secure over time through support on business and director taxation.