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Issue Convertible Bonds in French SAS
Raise flexible financing for your SAS with the guidance of our French corporate lawyers and paralegals.
We handle everything end-to-end: preparing the bond issuance terms, drafting board and shareholder decisions, coordinating with your bank or investor, filing with the Commercial Court Registry, and delivering the final compliant documentation.
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What are Convertible Bonds in a French SAS
Convertible bonds (OCA – obligations convertibles en actions) are financial instruments that start as debt securities and can later be converted into shares of the company.
They allow a business to attract financing while postponing shareholder dilution until a later date.
For French SAS companies, OCAs are a sophisticated way to combine debt and equity features, enabling founders to raise funds without immediately altering control. They are widely used in startup financing, growth capital, and bridge rounds before larger equity investments.
These bonds are governed by the French Commercial Code and require a shareholder authorization and registry filing, both of which our team handles comprehensively.
Advantages of Issuing Convertible Bonds in a SAS
Flexible Financing: Raise funds without an immediate capital increase or loss of control.
Investor Appeal: Offer an attractive hybrid instrument with conversion rights and defined yield.
Deferred Dilution: Existing shareholders retain control until conversion conditions are met.
Customisable Terms: Define interest rate, maturity, conversion ratio, and conditions freely in the issuance agreement.
Legal Security: Governed by clear procedures under French law, ensuring investor confidence and compliance.
Convertible bonds offer a powerful financing alternative for SAS companies that wish to preserve control while preparing for future growth or equity rounds.
How to Issue Convertible Bonds in a French SAS ?
Issuing convertible bonds in France involves precise legal, financial, and procedural steps.
Here’s how FrenchCo.lawyer assists you from start to finish:
Collecting Key Information
We identify your financing objectives, investor profile, funding amount, conversion terms, and maturity period. Our lawyers assess whether OCAs best suit your strategy or if another hybrid instrument (e.g., ORA, BSA) is more appropriate.
Drafting Legal Documentation
We prepare all required documents: shareholder resolutions authorizing the issue, board decisions setting detailed terms, bond issuance contracts, and disclosure statements compliant with French commercial law.
Investor Coordination & Subscription
We liaise with your investor(s) to finalize subscription details, ensure proper execution of the issuance documents, and collect payment or proof of subscription for filing purposes.
Filing with the Commercial Court Registry
The full dossier — corporate resolutions, issuance contracts, investor subscription records, and updated bylaws if applicable — is filed with the RCS. We ensure compliance with all mandatory formalities and registry confirmations.
Delivery of Official Proof
You receive certified copies of the filed documents and registry confirmations. If conversion occurs later, we assist in executing the corresponding capital increase.
With FrenchCo.lawyer
All services are managed by registered French corporate lawyers, assisted by trained paralegals who handle filings swiftly and securely. We guarantee full legal compliance, transparent communication, and support from start to finish — so you can focus on your company’s financing and growth strategy.
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What We Need From You to a Issue Convertible Bonds in French SAS ?
To prepare and register your convertible bond issuance efficiently, we’ll ask for the following:
Company Information
Current Kbis extract, registered office, share capital, and details of existing shareholders and management.
Bond Issuance Details
The intended amount, maturity, interest rate, and conversion terms (ratio, trigger event, conversion period).
Investor Information
Identity and contact details of the subscriber(s), along with proof of funds or subscription intent.
Updated Bylaws or Shareholder Agreements
If the conversion terms affect voting rights, classes of shares, or governance, we review and adapt your bylaws accordingly.
And Then?
Once we have your information, our lawyers take care of everything: drafting, publishing the legal notice, filing the issuance with the Commercial Court Registry, and providing you with the certified documentation proving the bonds were validly issued.
Issue Convertible Bonds– Simple Process, Clear Budget
Flat legal fee starting from €1 290 excl. taxes*
Additional mandatory costs: publication in a legal gazette + court registry filing fees.
No hidden costs, no surprises.
Our commitment:
No complex financing bundles
No intermediaries or resellers
Only regulated legal work by qualified lawyers
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Why Choose Us?
We Believe in Transparent, Lawyer-Led Corporate Financing
Efficient legal issuance: From bond authorization to registration, our team manages every step promptly and accurately.
Fully compliant documentation: Each bond resolution, subscription agreement, and filing strictly follows French corporate and financial law requirements.
Secure legal structuring: Terms are drafted to protect shareholder interests and ensure transparent conversion mechanics.
Supervised by qualified lawyers: Every issuance is handled and validated by licensed French business lawyers, ensuring reliability and compliance.
Let us handle your company’s convertible bond issuance — so you can focus on financing growth and investor relations with peace of mind.
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Understanding the Issuance of Convertible Bonds in a French SAS
Can a SAS issue convertible bonds?
Yes. A French SAS (Société par Actions Simplifiée) may issue convertible bonds—debt securities that can convert into company shares under agreed terms. The issue must be authorized by the shareholder(s) and implemented by the corporate body empowered in the bylaws or by a specific delegation.
What corporate approvals are required?
- Shareholder authorization (or sole shareholder decision) to issue convertible bonds and waive or maintain pre-emptive rights.
- Board/President implementation decision setting the final terms (if delegated).
- Bylaw updates only if the conversion will create specific share classes or preference rights.
Filings with the RCS (registry) and publication of a legal notice.
What key terms must be set?
- Nominal amount per bond and total size of the issue
- Maturity, interest (cash/PIK/fixed/floating), and events of default
- Conversion ratio/formula (fixed price, price-based formula, discount to a future round, valuation cap/floor)
- Conversion period (windows, automatic triggers, early conversion rights)
- Anti-dilution (full ratchet, weighted average) and adjustments (splits, dividends in shares, warrants)
- Investor protections (information rights, negative covenants)
Governing law/jurisdiction and transferability conditions
What’s the tax treatment of interest and conversion?
- For the SAS: Interest is generally deductible (subject to French interest limitation rules and arm’s-length terms). No corporate gain or loss is typically recognized on conversion itself (debt into equity).
- For the investor: Interest is taxable income (rate depends on the investor’s status/residence). On conversion, there is usually no immediate taxation; taxation is deferred to the disposal of the shares received. Always confirm specifics with tax counsel for cross-border investors.
What filings and publications are mandatory?
- Shareholder/sole shareholder minutes authorizing the issuance (and potential waiver of pre-emptive rights)
- Implementing decision (President/Board) fixing final terms if delegated
- Legal notice in an authorized journal
- Registry (RCS) filing of decisions and updated bylaws if relevant
- Ultimate Beneficial Owner update, if the cap table will change upon conversion and triggers reporting later
Who can subscribe—can foreign investors participate?
Any investor can subscribe (individuals or entities), including non-residents. There is no French residency requirement to hold or convert the bonds. Anti-money-laundering (KYC) checks and sanctions screening still apply, and payments typically transit through a French or EU bank.
How do pre-emptive subscription rights work?
By default, existing shareholders have a pre-emptive right on new securities giving access to capital (including convertible bonds). The shareholders may maintain these rights (pro rata invitations) or waive them (in whole or in part) to allow targeted or public placement. Waiver requires an explicit decision in the issuing resolution.
Is there a minimum or maximum amount? Does the SAS need a particular capital level?
There is no statutory minimum for a convertible bond issuance and no mandatory minimum share capital tied to the issue. The size must be compatible with the company’s financial capacity and with conversion mechanics (so the post-conversion capital is coherent with par value and share classes). If conversion would create fractional shares, draft cash adjustment or rounding clauses.
How is the conversion ratio determined in practice?
Three common approaches:
- Fixed price (e.g., €10 per share),
- Discount to next priced round (e.g., 20% discount), and/or
Valuation cap (investor converts at the lower of the cap or the round price).
You can combine these to balance founder dilution and investor upside. Include caps/floors and rounding rules to avoid fractional issues.
Are there accounting impacts or need for a statutory auditor?
- Accounting: Depending on terms, the OCA may be split into liability and equity components (for IFRS) or recorded as a liability (French GAAP) with disclosures; embedded features can trigger derivative treatment under certain frameworks.
Auditor: A SAS does not automatically need a statutory auditor for issuing convertible bonds. An auditor becomes required only if the company crosses legal thresholds or if specific operations (e.g., in-kind contributions at conversion with special features) require it.
Issue Convertible Bonds in Your SAS
Let our French lawyers & paralegals handle the entire issuance process for you.
More About Issuing Convertible Bonds in a French SAS
Can a SAS issue convertible bonds?
Yes. A SAS (Société par Actions Simplifiée) can issue convertible bonds (“obligations convertibles en actions”) if authorized by the shareholders. The decision is generally taken during an extraordinary general meeting and implemented under strict compliance with the French Commercial Code.
What documents will I need?
You’ll need:
Shareholder resolution authorizing the bond issue and its terms;
Updated company bylaws (if conversion affects capital);
Subscription agreements with investors;
Legal notice of issuance and filing with the commercial registry (greffe).
Do I need statutory auditor?
Yes, in most cases. If your SAS does not already have one, an independent commissaire aux comptes must issue a report on the valuation and fairness of the conversion terms before the bonds are issued.
How long does the process take?
Typically between 2 to 4 weeks, depending on whether the company already has an auditor and the time required for legal drafting, shareholder approval, and registry filings.
Can I issue convertible bonds to foreign investors?
Yes. Convertible bonds may be subscribed by both French and foreign investors, provided anti-money laundering (AML) and KYC checks are properly completed and capital flows comply with French banking regulations.
What are the typical costs?
- Legal fees vary depending on the complexity of the operation, usually covering the drafting of resolutions, auditor coordination, and registry filings. Additional costs include publication fees and auditor’s remuneration.
What happens when the bonds are converted?
Once conversion conditions are met, the bonds are exchanged for newly issued shares in the SAS. The capital increase must then be recorded through a formal filing at the greffe and an update to the company’s bylaws.
Can I issue several series of convertible bonds?
Yes. A SAS can issue multiple series of convertible bonds under separate authorizations, each with different terms — such as interest rate, maturity, and conversion ratio — provided each series is approved by shareholders.
