French term (edited): par le pass� dans le capital; convertis ...par le pass�

You actually have two questions here, although on the same topic. Under French accounting rules, you can increase capital stock (share capital) simply by transferring retained earnings or other paid-in capital into capital stock (and increasing the par value of shares or issuing new shares accordingly) without there being any net inflow of funds. I think that the standard equivalent of "incporporation" is "capitalization".
Debt, on the other hand, is generally "swapped" for equity - in other words, equity is issued to satisfy creditors.

--------------------------------------------------
Note added at 9 hrs 5 mins (2005-10-13 08:02:12 GMT)
--------------------------------------------------

[PDF] 2000 Annual Report - Statements - General information
File Format: PDF/Adobe Acrobat
Company by way of capitalization of reserves, profits or premiums, ...
capitalization of reserves, up to a nominal amount not to exceed ...
www.total.com/static/en/medias/topic565/TFE_2000_en_AR_5_St...

Mickey News °o° - Everything Disney - Disneyland Disneyworld ...
in the end a rights issue raised €253m, about €300m of debt was swapped for equity, and Walt Disney put a €150m credit line at the company's disposal. ...
www.mickeynews.com/PDA/DisplayNews.asp_Q_id_E_775Terro

(Perhaps a Mickey Mouse transaction...)