On incorporation of a SAS, the shareholders of the company must subscribe the entire amount of issued share capital (that is, the amount of registered share capital, which corresponds to the amount of share capital indicated in the bylaws). Thus, if the registered share capital of a SAS is 10.000€ divided into 10.000 shares of 1€ par value each, all of the 10.000 shares must be subscribed for by the shareholders.
French law allows however shareholders of a SAS to pay only 50% of the registered share capital on incorporation (that is, in the case above, 5.000€). The remaining amount (5.000€) must be paid up within a maximum period of 5 years as from the incorporation of the company.
The director (“Président”) of the SAS is responsible to call upon the shareholders to pay the unpaid capital. In the event that the Président fails to do so, any interested party may apply for a court order obliging the Président, or a third party appointed by the court for this purpose, to call up the unpaid capital.
The Président of a SAS who has not called for the payment of the unpaid amount of registered share capital may be held liable for violation of the law, it being specified that the statutory auditors of the company will have the obligation to report this fact to the competent court authorities (“Procureur de la République”).
For as long as the registered share capital has not been fully paid up, the company may not issue new shares, financial instruments giving right to shares (convertible bonds, warrants, etc.) or bonds.
