In most of the operations we structure, investors' funds do not all enter as share capital. A part — often the larger one — takes the form of shareholder current account advances: a loan from the partner to the company, repayable, possibly interest-bearing. The choice is not cosmetic: it determines the taxation of the return flows for the vehicle's entire life.
Why a repayment is not income
The founding principle is simple: repaying a debt does not enrich the creditor. Repayment of a current account's principal is therefore not taxable income — the partner recovers their claim, nothing more. That is what lets a vehicle return cash to its investors as the operation progresses, without waiting for a profit distribution: current account repayments naturally precede dividends in the cash waterfall.
A current account repayment is not a distribution. Confusing the two means paying a tax that does not exist — or triggering an audit that need not have happened.
That qualification demands impeccable bookkeeping: each current account's balance tracked line by line, each repayment matched to the claim it extinguishes. It is precisely the kind of accounting an administered vehicle must produce unprompted.
Interest: possible, capped, documented
The current account may bear interest. On the company's side, interest paid is deductible — but under strict conditions in France: the share capital must be fully paid up, and the rate served cannot exceed a published reference rate, recomputed quarterly from average bank rates (for illustration, around 4.5% for financial years ended late 2025). The fraction of interest above the cap is not deductible.
For a partner who is a French-resident individual, interest received falls by default under the flat tax — 30%, social levies included — with an option for the progressive scale. For non-resident partners, the treatment depends on domestic law and the applicable treaty: one of the points structuring must examine investor by investor.
The written agreement, or nothing
Nothing legally requires a written current account agreement. Everything recommends one. Rate, term, repayment terms, ranking against other claims, treatment on a transfer of the shares: every missing clause is a potential dispute between partners — and a fragility in an audit. In our vehicles, the current account agreement belongs to the subscription documentation, at the same rank as the articles and the pact.
What we retain
The shareholder current account is an excellent tool as long as it is treated for what it is: a debt, with a debt's documentary rigour. The figures change every year and vary with the vehicle's and the partner's countries — the orders of magnitude cited here hold for France in early 2026, for illustration. The discipline does not change.