Compte Courant d’Associé: When Your SCI Can Block or Delay Reimbursement

Compte Courant d’Associé: When Your SCI Can Block or Delay Reimbursement

In Part 1, we established the principle: your compte courant d’associé (CCA) is reimbursable on demand. But principles have exceptions. French law offers several mechanisms — some contractual, some statutory, some triggered by insolvency — that can restrict or delay your ability to withdraw funds. Understanding these limits is just as important as knowing the right itself.

The Landscape: Three Categories of Restriction

The exceptions to the principle of on-demand reimbursement fall into three broad categories, each governed by different legal rules and carrying different practical consequences for foreign investors in French property SCIs.

Let us examine each in turn.

Contractual Limits: Blocking Clauses and Agreed Restrictions

The most common way the right to reimbursement is restricted is through the parties’ own agreement. French law fully respects the freedom of contract here: if you have agreed to a restriction, you are bound by it. The key question for any foreign investor is therefore: what does your CCA agreement — or your SCI’s statuts — actually say?

The blocking clause (clause de blocage)

A blocking clause is a contractual provision that prevents the associate from demanding reimbursement for a specified period or until certain conditions are met. These clauses are extremely common in practice, particularly when an SCI has taken out a bank loan. French banks routinely require that CCA funds be “blocked” for the duration of the loan, as a form of quasi-equity cushion protecting their own lending position.

Blocking clauses can appear in three places: the CCA agreement itself (a standalone contract between you and the SCI), the articles of association (statuts), or a collective decision of the partners (décision collective des associés). There is an important constraint, however: because a blocking clause increases the financial obligations of the associate, it must be adopted unanimously. A majority vote cannot impose a restriction on your CCA without your consent.

The notice period (préavis)

Even where there is no formal blocking clause, French law now requires a “reasonable notice period” before demanding reimbursement. Since the 2016 reform of French contract law (Ordonnance of 10 February 2016), any open-ended loan — which is what a CCA without a fixed term amounts to — requires the borrower to be given reasonable notice before the lender can call in the debt.

What constitutes “reasonable” is assessed on a case-by-case basis. The courts have held that a demand for reimbursement made in “brutal conditions and without notice” may constitute an abuse of right (Toulouse, 2nd Chamber, July 2018). For a property SCI, where the company’s liquidity is typically tied up in a physical asset, a period of several months is likely to be considered reasonable.

Clauses that are too vague or too broad

Not all restrictions will be upheld by the courts. French case law imposes a clear drafting requirement: any departure from the principle of immediate reimbursement must be “clearly expressed” (Paris, Pôle 5, 9th Chamber, February 2015). An ambiguous blocking clause will be interpreted in favour of the associate-lender, not the company.

Moreover, a clause that gives the gérant or the board unilateral discretion to decide when and whether to reimburse is void as a condition potestative — a condition that depends entirely on the will of the debtor. The courts have struck down such provisions as contrary to fundamental contract law principles (Versailles, 2 April 1999).

Statutory Limits: When the Law Steps In

Even in the absence of any contractual restriction, French law provides several mechanisms that can delay or limit reimbursement. These are not elective — they operate by force of law, regardless of what the parties have agreed.

The judicial grace period (délai de grâce)

Under Article 1343-5 of the Civil Code, if the SCI is facing financial difficulties, the court may grant it a grace period of up to two years to make the reimbursement. The court will weigh the company’s situation against the needs of the creditor (you). This is a discretionary power, and the courts treat it as exceptional — but it is a real risk if your SCI is cash-poor and you are demanding a large repayment.

Importantly, the provisions of Article 1900 of the Civil Code — which allow a court to fix a repayment term for a loan — do not apply to the CCA. The Cour de cassation confirmed this definitively in its ruling of 10 May 2011 (no. 10-18.749). This means the only judicial delay mechanism available to the company is the grace period, not a judicially imposed repayment schedule.

The obligation of good faith

The Paris Court of Appeal held in 2008 that where an associate knows the company is in financial difficulty, the duty to perform contracts in good faith may prevent them from demanding immediate reimbursement — at least in urgent interim proceedings (référé). However, this reasoning sits uncomfortably with the Cour de cassation’s established position that good faith cannot override the binding force of contracts. It is far from certain that this argument would succeed before the Supreme Court.

Prescription: the five-year clock

Your right to claim reimbursement is not eternal. Under French law, the limitation period is five years. But the clock does not start from the date you advanced the funds — it starts from the date you demand reimbursement, which is the moment the debt becomes payable (Com. 27 September 2017). As long as you have not made a formal demand, the prescription period does not run.

This means that leaving funds in a CCA for years — even decades — does not, in itself, extinguish your right. However, once you have made a demand and the company has refused, you have five years to bring legal proceedings.

Contribution to losses in civil companies

In an SCI — which is a société civile with unlimited liability for associates — the statuts may provide that losses are borne immediately by the associates in proportion to their shareholdings. Where such a clause exists, losses can be allocated directly to the associates’ current accounts. The effect is that the CCA balance is reduced by the allocated losses, and the associate cannot demand reimbursement of amounts that have been absorbed by this mechanism.

This is a distinctive feature of civil companies (as opposed to commercial companies with limited liability) and one that foreign investors frequently overlook when structuring through an SCI. If your SCI is structurally loss-making — for example, because depreciation charges exceed rental income — this provision can progressively erode your CCA balance.

Insolvency Limits: When the SCI Is in Financial Distress

The most serious restrictions on CCA reimbursement arise when the SCI enters formal insolvency proceedings. French insolvency law — sauvegarde, redressement judiciaire, or liquidation judiciaire — creates a series of rules that can freeze, subordinate, or even annul reimbursements.

Advances made before the opening judgment

If your CCA advance was made before the insolvency proceedings were opened, your claim is treated as a pre-existing debt. You cannot demand payment during the proceedings. Instead, you must file a proof of debt (déclaration de créance) and wait for the outcome of the procedure — which may be a restructuring plan, a sale of assets, or a liquidation.

The suspect period (période suspecte)

If the SCI reimbursed your CCA during the “suspect period” — the window between the date of cessation of payments and the opening judgment — that reimbursement can be annulled. Under Article L.632-2 of the Commercial Code, the annulment is possible if the associate knew the company was in a state of cessation of payments. For a gérant-associate, such knowledge is presumed.

This is a significant risk for foreign investors who are also managers of their SCI. If you repay yourself from the SCI shortly before it enters insolvency proceedings, the liquidator can claw back those funds.

Advances made after the opening judgment

Conversely, if you advance new funds to the SCI after the opening of proceedings — for example, to help the company through its observation period — your claim benefits from a priority ranking. Under Article L.622-17 of the Commercial Code, post-opening claims that arise “for the needs of the proceedings or the observation period” are paid ahead of pre-existing debts. This provides a meaningful incentive for associates to support their company during restructuring.

What This Means in Practice for Foreign SCI Investors

Read your statuts and CCA agreement before you invest

The single most important piece of practical advice is this: before advancing any funds to your SCI beyond your initial capital contribution, understand what restrictions apply. If your statuts contain a blocking clause — or if the bank has imposed one as a condition of financing — your CCA is not, in practice, reimbursable on demand, regardless of the general legal principle.

Negotiate blocking clauses carefully

If a blocking clause is required (typically by the bank), negotiate its terms. Key points to consider: the duration of the block, whether partial reimbursements are permitted, what triggers the unblocking (full mortgage repayment? a specific date?), and whether the clause can be modified by a simple majority or only unanimously. An ambiguous clause will be interpreted in your favour, but it is far better to have clarity from the outset.

Do not ignore the notice period

Even if your CCA is nominally reimbursable on demand, give your SCI reasonable written notice. A sudden, unannounced demand for a large sum — particularly if you are also the gérant — creates legal risk. It could be characterised as an abuse of right, or, in extreme cases, as a management fault (faute de gestion) if it destabilises the company’s finances.

Be vigilant about insolvency timing

If your SCI is approaching financial difficulty, be extremely cautious about reimbursing yourself from the CCA. Payments made during the suspect period can be clawed back. If you are both the gérant and the associate who receives the reimbursement, you will be presumed to have known about the company’s financial state.

Frequently Asked Questions

Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. French corporate and property law is complex, and specific situations may require professional counsel. The legal references cited are drawn from authoritative French legal sources (Dalloz, LexisNexis) and reflect the state of the law as understood at the time of writing.