The contribution auditor’s role
When is it required?
When a company is incorporated or increases its capital through contributions in kind. In some company forms, shareholders may waive the appointment under strict conditions set by law.
How is the auditor appointed?
Unanimously by the shareholders, or by the president of the competent court (tribunal des activités économiques, TAE, formerly the commercial court, in Paris and where it applies; commercial court elsewhere) at the request of the founders or the company.
What does the report cover?
The value of the contributions and any special benefits, so that shareholders and third parties can rely on the capital shown.
Contributing shares to a holding company
A frequent case: an owner contributes the shares of the operating company to a new holding. The report assesses the value of the shares contributed.
The approach
- First meeting Operation, timetable, documents available.
- Engagement letter Scope, timetable and fees, after independence checks.
- Work Review of the valuation methods and supporting documents.
- Report Filed in time for the shareholders’ decision and the formalities.
Frequently asked questions
Is a contribution auditor always mandatory?
Not always: in some company forms, shareholders may waive it under strict conditions, notably on the value of the contributions. We check this with you.
Does the contribution auditor set the value?
No. The value is proposed by the founders or the company; the auditor assesses whether it is not overstated.
Can my accountant be the contribution auditor?
No. Independence rules prevent the accountant who keeps the books, advises the company or the contributor, or prepares the transaction or the valuation, from acting as contribution auditor (self-review). As Hexaconto is chaired by Nadir El Jouaidi, he does not accept the engagement when the firm works for the company, the contributor or the shareholders.
How much time should we allow for a contribution audit in France?
It depends on the operation and how quickly the documents are available. Contact us as early as possible.
What if the value is found to be overstated?
The report says so; the value can then be revised before the decision, which protects everyone involved.