By default, the share capital of a limited liability company SARL is fixed. The standard statutes of LLCs only offer this characteristic for their capital. However, it is possible to modify your SARL to make it one LLC with variable capital. Except for the modification of the capital, the managers of LLCs with variable capital are subject to the same formalities as those of an LLC with fixed capital. Clauses specific to each company may however define precise operations (power of the manager, approval of new partners, etc.). Each partner owns shares in the LLC and holds proportional voting rights to his participation…

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From LLC with fixed capital to LLC with variable capital

Since by default the LLC has a fixed capital, it is essential to write a specific clause added to the statutes. called capital variability clause, this text can be incorporated as soon as the SARL is formed. In this case, the articles of incorporation registered in the Commercial and Companies Register (RCS) mention “SARL with variable capital”. If you have registered your SARL with a fixed share capital, it is possible to modify the content of the statutes later. In this case, it will be necessary to carry out the classic formalities relating to the modification of a limited liability company: collective decision of the partners, publication of a legal notice, M2 form, and registration with the RCS.

Principles of variability and content of the clause

Partners of the LLC opting for variable capital must define a maximum and minimum amount of capital. The maximum figure is free, but must be stipulated in the clause. Otherwise, in the event of an increase in share capital, the clause will be void and therefore subject to standard formalities for amending the articles of association. For the minimum, it cannot be less than 10% of the subscribed capital. The clause must mention the number of the article of the articles of association in which this current share capital appears. To be valid, the clause must therefore contain the following information.

“The share capital is variable within the following authorized limits:

  • Maximum authorized capital in euros;
  • 1/10th of the subscribed capital appearing in article XX (indicate the number). “

Then, the company can develop its capital within the limits set in the variability clause without any formality. The participation of each partner does not change. The number of shares held is modified only if one of them sells his own or buys that of one of the partners. As soon as the amount of capital reaches one of the thresholds (floor or ceiling), this amounts to a modification of the articles of association and therefore requires a consultation of the partners and all the necessary formalities:

  • Tax report registered with the tax services;
  • Publication of a legal notice;
  • File submitted to the registry of your commercial court or via the business formalities center (cfe).

Variable capital companies: very small in statistics

If we refer to the statistics published by Infogreffe, the number of incorporated companies with variable capital is very small. In 2016, 198,700 new companies were registered. This figure includes all the legal forms of commercial companies: EURL, SARL, SASU, SAS, SCOP, SNC … For the legal forms with limited liability EURL and SARL, 386 had defined variable capital. The rest, 84,891 such companies, were incorporated, the standard form of this legal nature. To compare with SASU / SAS, another widely used legal nature (108,670 registrations), in the same year 2016, only 1,468 SAS / SASU had opted for variable capital. These figures show how the variability of social capital is not the norm, but a choice of entrepreneurs.

Advantages and disadvantages of variable capital

The main advantage of choosing variable capital is theabsence of formalities necessary to change its amount. The partners retain the option of not freeing up all of the capital and depositing it only at least 20%.

These two positive points must be weighed against the disadvantages and the real need to modify social capital during the life of a company. Moreover, the numbers of registrations mentioned above are not the sign of concrete advantages compared to a fixed capital. In reality, the modification of a share capital is not that frequent. The negative points are related to the image given by such capital. Variable capital can make a partner doubt your stability. Knowing that the capital can be 10% of the amount of that subscribed, a bank or a supplier can ask for additional guarantees.

Legally, the content of the variability clause be well drafted so as not to conflict with the statutes of your company. The manager of the LLC must therefore take into account all these drawbacks and assess his needs.

Partial release of share capital during the creation of the company

Remember that when setting up an LLC, you can only release part of it. Concretely, this means that you must at least deposit 20% of the amount defined in your statutes. The balance must be deposited as you wish within 5 years of the year of initial registration.

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