- A share capital reduction not due to losses (réduction de capital non motivée par des pertes) returns funds to shareholders, either by buying back and cancelling shares or by repaying part of the nominal value.
- Where there is no statutory auditor in office, no report is required: since the PACTE Act (2019), the proposal is sent to the statutory auditor "if there is one" (Art. L.225-204 and L.223-34 French Commercial Code).
- Where a statutory auditor is in office, that auditor acts, and must receive the proposal at least 45 days before the general meeting (Art. R.225-150).
- In every case, creditors have a right to object: 20 days in an SA and SAS, one month in an SARL.
- Where our involvement is useful, fees from €590 excl. VAT.
A shareholder exit, the return of surplus cash, the preparation of a succession: a capital reduction not due to losses meets frequent needs. It follows a procedure designed to protect creditors, since share capital is their security. The question of the statutory auditor (commissaire aux comptes) has a simpler answer than is often assumed. We prefer to give it to you plainly.
When is this report mandatory?
The company has no statutory auditor: no report
Since Act no. 2019-486 of 22 May 2019 (PACTE Act, Art. 20), Article L.225-204 of the French Commercial Code provides that the reduction proposal is sent to the statutory auditors "if there are any". This rule applies to the SA (public limited company) and, by cross-reference in Article L.227-1, to the SAS (simplified joint-stock company). Article L.223-34 uses the same wording for the SARL (private limited company).
As a result, an SAS, an SASU (single-shareholder SAS) or an SARL without a statutory auditor does not need to appoint one for the capital reduction alone. No report is required. It would be inaccurate to tell you otherwise.
The company has a statutory auditor: that auditor acts
Where the company has a statutory auditor, whether required by law or by its articles of association, the proposal is sent to that auditor. The auditor informs the general meeting of its assessment of the reasons for and terms of the reduction. This engagement falls to the auditor in office, not to an outside practitioner.
When our involvement remains relevant
- The reduction is part of a wider transaction: a reduction followed by a reserved increase (waiver of preferential subscription rights), payment by debt set-off, or a contribution in kind.
- The articles of association, a shareholders' agreement or a lender require the assessment of an independent statutory auditor.
- The shareholders want an outside view on equal treatment or on the buy-back price, in the context of a contentious exit.
If in doubt, our Which report do I need? tool tells you in a few questions whether a report is required.
What the statutory auditor checks
When it acts, the statutory auditor assesses the reasons for and terms of the reduction. Its work covers in particular:
- the lawfulness of the transaction under the law and the articles of association;
- compliance with equal treatment of shareholders: a buy-back offer made to all, or a proportional reduction of nominal value;
- the amount and terms of the reduction, the buy-back price and how it is determined;
- the effect on equity, on reserves and, where relevant, on the minimum share capital;
- consistency between the report of the board or the president and the proposed resolutions.
Methods of reduction
- Buy-back then cancellation of shares: in an SA and SAS, the general meeting may authorise the board or the president to purchase a set number of shares in order to cancel them (Art. L.225-207).
- Reduction of nominal value with repayment to shareholders.
Creditors' right to object
Creditors whose claims arose before the minutes were filed with the commercial court registry (greffe) may lodge an objection before the commercial court. The court either dismisses the objection or orders the repayment of the claims or the provision of guarantees, if the company offers them and they are considered sufficient. The reduction cannot be carried out during the objection period nor, if an objection is lodged, before a first-instance ruling (Art. L.225-205). Significant bank debt often justifies informing lenders in advance: an objection delays the return of funds by several weeks.
For tax purposes, amounts received on a share buy-back fall under the capital gains regime (Art. 112, 6° of the French General Tax Code (CGI)). The Conseil d'État confirmed this on 15 October 2025 (no. 495120), regardless of the reason for the buy-back. Repayment of contributed capital falls under Article 112, 1°. These choices are a matter for your tax adviser.
The engagement, step by step
- Quote: written reply within 24 working hours, with our view on whether a report is needed.
- Engagement letter and confirmation of our independence.
- Documents: draft resolutions, management report, financial statements.
- Procedures: reasons, terms, equal treatment, effect on equity.
- Signed report within 48 hours of receiving the complete file.
- Made available to shareholders before the general meeting.
- Extraordinary general meeting (EGM), then filing of the minutes with the registry: the objection period starts to run.
- Formalities: at the end of the period, completion of the reduction, legal notice and filing through the INPI one-stop formalities portal.
Timeline and legal deadlines
| Step | Deadline | Legal basis |
|---|---|---|
| Proposal sent to the incumbent statutory auditor | At least 45 days before the general meeting | Art. R.225-150 French Commercial Code |
| Report (complete file, engagement entrusted to the firm) | 48 hours | Firm's commitment |
| Creditor objections, SA and SAS | 20 days from filing of the minutes with the registry | Art. R.225-152 French Commercial Code |
| Creditor objections, SARL | 1 month from filing of the minutes with the registry | Art. L.223-34 and R.223-33 et seq. French Commercial Code |
| Completion of the reduction | After expiry of the objection period | Art. L.225-205 French Commercial Code |
The objection period comes on top of the general meeting schedule: plan for it if the return of funds has a deadline. Our timeline tool builds in these periods.
Documents to provide
- Draft resolutions and report of the board or the president.
- Latest approved annual financial statements and, if necessary, interim accounts.
- Up-to-date articles of association and any shareholders' agreement.
- Capitalisation table before and after the reduction.
- Method used to determine the buy-back price or the amount repaid.
- Evidence of the cash available to pay shareholders.
How much does a capital reduction report cost?
Where the law does not require one, it costs nothing: we will tell you so. Where a report is useful or required, our fees start at €590 excl. VAT. They vary with the method chosen, the number of shareholders involved, any combined transactions and the time available. Use the pricing simulator or request a quote.
Frequently asked questions
Must an SAS with no statutory auditor appoint one to reduce its share capital?
No. Since the PACTE Act of 22 May 2019, the reduction proposal is sent to the statutory auditors only if the company has any (Art. L.225-204, applied to SAS companies by Art. L.227-1). No appointment is required for the reduction alone.
How long do creditors have to object to a capital reduction not due to losses?
Twenty days in an SA or SAS from the filing of the minutes with the registry (Art. R.225-152), one month in an SARL. The reduction cannot be carried out during this period.
How long before the general meeting must the incumbent statutory auditor receive the proposal?
Where the company has a statutory auditor, the proposal must be sent to it at least 45 days before the general meeting (Art. R.225-150).
How is a shareholder taxed when its shares are bought back and cancelled?
Amounts received on a share buy-back fall under the capital gains regime (Art. 112, 6° of the French General Tax Code (CGI)). The Conseil d'État confirmed this on 15 October 2025 (no. 495120), whatever the reason for the buy-back.
Can a capital reduction take the share capital below the legal minimum?
In an SA, capital may be reduced below the legal minimum only on the condition precedent of a capital increase restoring it to at least that minimum. SAS and SARL companies have no meaningful legal minimum, but the reduction must respect equal treatment of shareholders.
Registered statutory auditor (CRCC Paris), qualified French chartered accountant. He personally signs the firm's reports.
Sources and legal texts
- Bpifrance Création: capital reduction (procedure, statutory auditor, creditor objections)
- Lefebvre Dalloz: sending the capital reduction proposal to the statutory auditor (SAS)
- Legalplace: capital reduction not due to losses in an SARL (Art. L.223-34)
- Deloitte Société d'Avocats: Conseil d'État, 15 October 2025, no. 495120, tax treatment of share buy-backs
Article up to date as at 8 October 2026, for general information only. It does not replace the review of your file by your lawyer or by the firm. Sources are in French.