Benjamin A. Kergueno, LL.M > French fiscal non-residents > Setting up a company in France
Setting up a company in France

Setting up a company in France can prove to be a complex operation for a large number of people, for various reasons.

The choice of legal form

Many legal forms of companies are possible in France, we have classified them into 2 categories: partnerships and companies based on capital.

 

Partnerships Companies based on capital
Non-trading company Public limited company
Real estate non-trading company Limited liability company
General partnership Simplified joint stock company

This table shows the most common forms of the types of companies that you can find, this being not exhaustive.

It is useful to know your projects at first, if your project is to acquire real estate in France and to undertake a civil activity (patrimony management) and not to undertake furnished rentals (and more generally not undertake a commercial activity) it is wiser to create a non-trading company (SC or SCI), the regime of ownership of real estate is also much more interesting since it comes under the regime of real estate capital gains (private capital gain ).

One of the shortcomings of this type of companies is that you are subject to indefinite and joint liability, the partners of the partnerships are liable for the public debts of the company, their liability cannot be limited to the amount of their contributions in the company.

The tax regime of these companies is normally the partnership regime (submission of income tax (progressive tax schedule) and thus taxation of profits on the names of the partners) but the option for corporation tax can be taken by the partners of the corporation.

If however you wish to create a business in France, in these cases a commercial company will be created.
Among the companies cited each has different characteristics.

We have drawn up a table of elements that includes some indications (but not all) on the positive / negative points of these companies.

Categories of companies Categories of companies Categories of companies
Public limited company
  • Freedom in drawing up the statutes
  • Liability of the partners limited to the amounts of the contributions
  • Tax regime for corporation tax but possibility of option for Tax on Revenue.
  • Transfer of securities facility + favourable registration rights regime
  • Interesting tax regime for the President

Possibility of dividing dividends for partners submitted to the one-off withholding of lump sum

  • No co-president, but it can have a president and a general manager
  • Non-profitable plus value system in the event of resale of a property registered in the company’s accounts (traditional plan)
  • Deposit of mandatory share capital
  • Mandatory accounting
Simplified joint stock company Same as for the public limited company but possibility in addition to create a SASU (single associate company) Same as for public limited company
Limited liability company Same as for the public limited company, except for the freedom in the drafting of the statutes which are more formal but possibility of creating an SARLU (EURL) thus with a single partner (submission to the Tax on Revenue regime)

And difference with the public limited company in the tax regime of the director who will here be a manager and whose tax regime is much less interesting

Same as for the limited liability company except for the co-presidency since in a SARL there is neither president nor CEO but managers (one or more); attention this manager cannot be a legal person.

Agreeing on the desired project is therefore the first step needed to choose the legal form that best suits your needs.

Once the legal form chosen, it will be necessary to establish statutes for this company (regardless of the type of companies chosen). These statutes will be the body of your company, their writing may be more or less complicated depending on the type of company chosen (some statutes may be drafted fairly freely while others not), it is important to know the project chosen in order to write them in compliance with this (for example, for the sale of shares or shares: approval by unanimity, majority, etc.).

In these statutes it is useful to appoint the director of the company (manager or president according to the type of company), this makes it possible not to have to undertake a general assembly for the appointment of this person.

These statutes are to be established first, especially for companies based on capital because it allows the opening of an account in the name of the company to deposit the capital (this is mandatory for this type of company).

For the constitution of the company and filing of the file with the registry where the company will be registered (registry of the place of the registered office), it will be necessary to think about providing a proof of the address of the place of establishment of the registered office.

Consider making and filing a declaration of non-conviction and filiation for the manager (s) of the company to which must be attached a copy of their ID.
The copy of each partner’s identity document is also necessary when creating a partnership, in view of the responsibility of future partners.

Forms will have to be completed (M0 form depending on the type of company chosen).

A publication in a legal announcement newspaper will be made.

Of course if it is not a creation but a purchase or lease management or other, the formalities mentioned above will be less burdensome.

Creating a company has a cost (registry fee) that depends on the type of company chosen, usually ranging from 39 to 71 euros.

When creating the company, the filing of the declaration of beneficial owners should be made, on this legal obligation we point you to our article written on this subject: referral link of the article on the declarations of beneficial owners. Of course, the deposit of this declaration of beneficial owners also gives rise to court fees.

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