Contributions to a partner's current account are a funding alternative to a capital contribution. These funds are repayable and can be remunerated by fixed interest. However, the use of an associate current account does not give rise to social rights.
Here is the rules of the associate current account.
Rules must be followed to create a partner current account due to the banking monopoly on loans.
For someone to be able to open an associate current account and provided the funds are blocked for at least 2 years, it is necessary:
First point : for the SAS, the managers must hold at least 5% of the share capital to obtain a current partner account.
Second point : the managers of limited liability companies can have a current account as a partner, even if they do not own 5% of the share capital.
The funds are blocked for at least 2 years:
When the funds in the partner's current account are blocked for at least two years, SARLs and joint-stock companies do not require that the partner or the shareholder hold at least 5% of the share capital.
La creation of an associated current account does not require a specific procedure and a verbal agreement is sufficient.
However, it is advisable to provide for the operation of the associated current account in writing:
Partners can make deposits in a partner's current account to the company in order to cover their cash requirements. These deposits are considered as financial debt which appears on the balance sheet. We offer on Accounting-Easy an article that deals with accounting for partners' current accounts.
In principle, the partner is entitled to request an immediate refund of deposits in the current account. But this possibility can be limited by an act which defines the terms of reimbursement, by a blocking agreement or by the corporate interest and the motivation of the partner.
For more information on this: reimbursement of partners' current accounts.
Deposits in a partner's current account may be remunerated by fixed interest, in particular if the contributor is a legal entity, to avoid any tax risk.
For more information on this: the remuneration of partners' current accounts.
A blocking of sums deposited in the partner's current account may be required, in particular at the request of the bank for external financing.
The balance of the partner's current account:
Please note: : in SARL or a joint-stock company, misuse of company assets can be observed if a natural person partner has a debtor partner's current account.
By decision of the general meeting, all or part of these sums may be incorporated into the capital by capital increase.
Setting up an associate current account is subject to the procedure for regulated agreements, as it is a non-current transaction.
To address in more detail the important points of the operation of the associate current account, we offer several other articles:
