It may be necessary, in certain circumstances, for the partners of a company to have to reduce the amount of their share capital without cause of loss. This possibility exists and can be implemented when the amount of share capital is no longer justified or when some of the partners wish to recover part of their initial investment.
La decrease in share capital not motivated by losses is a decision that must be made extraordinary general meeting (AGE) because it leads to modification of the statutes.
The operation can be performed in two ways:
In all cases, equality between partners or shareholders should be respected.
The general procedure to follow is as follows:
Please note: : depending on the type of company, other formalities may be added to this list.
Creditors have a power of veto because their security, constituted by the social capital, is reduced.
For the opposition to be valid, their claim must be prior to the date of filing at the registry of the minutes of the EGM which decides on the capital reduction.
In addition, the opposition must be made:
Partners or shareholders are faced with tax consequences for the share capital reduction operation not motivated by losses.
In this context, taxation depends on the equity structure of the company. Reimbursement made:
The reimbursement made to the partner or shareholder may be taxable:
A procedure must be followed with the business formalities center (or online on the website infogreffe.fr). A formality must be completed first.
The deed leading to the reduction of the share capital must first be submitted to the business formalities centre.
Once the creditors' objection period has elapsed, a modification file must be filed and must include:
The share capital reduction operation is complex and requires the use of a professional (lawyer and/or chartered accountant). It also has an impact on taxes.
Leaders who wish to inject funds into their business should first consider how they wish to do so. One solution is to create an associate's current account, which can be remunerated by fixed interest and recovered without formalities if the company has the necessary funds.
Answer: The process to reduce the share capital of a company is to reduce the amount of shares issued by the company and to reimburse the shareholders with equity.
Answer: The main consequence of the reduction in share capital is that the amount of equity available to the company decreases. Shareholders are also disadvantaged, because their capital is reduced and their rights are diminished.
Answer: The reduction of the share capital of a company can be authorized by the shareholders, the board of directors or the court.
