One of the key steps in starting a business is the legal choice of the company to be. It is very important to know all types of companies in FranceIn order to identify the best suited to the type of business.
Businessman Single (EI)
It is the simplest legal form of company constitution. Here, the entrepreneur is the sole owner of the company, not being necessary partners or members.
Unlike other business types in France, an EI does not require a minimum capital. This is because in the eyes of justice, the entrepreneur and the company are considered as one. In other words, the entrepreneur has full control of his company, not needing to report on its administration or publish his annual accounts. The entrepreneur will have to respond to any situation in the company (debt, for example).
Here, the professional and personal assets merge with the exception of their primary residence, which is exempt from being seized by creditors. The entrepreneur can choose to protect your other real estate, built or not developed, that are not being used for business purposes, making a statement of inadmissibility before a notary.
There is no cost associated with registration or fees associated with companies of this type. However, the entrepreneur has to pay income tax in the category corresponding to their commercial activity.
Individual entrepreneur with limited liability (EIRL)
Estes business types in France They are similar to an EI with the difference that in this, the entrepreneur can limit their financial liability, creating a professional heritage, appointed by operation of heritage. Only this asset can be seized by creditors in case of difficulties, including debt.
The trade name of the company must contain the words "Private Entrepreneur with Limited liability" or their initials, EIRL. This statement shall be included in all professional activities, including in its documents.
Operation of a EIRL
The entrepreneur should open at least a bank account dedicated exclusively to the professional activity. Thus the accounts of that is independent, ie is subject ace of business accounting rules.
An individual entrepreneur can opt for this Type of company over the life of their business. For this, you must download to your assets all the assets necessary for the activity it performs. In tax terms, this exchange presents no added value and so it has no cost associated with starting a business of EIRL type.
Finally, the entrepreneur has the possibility to opt for corporation tax instead of income tax. However, you should note their choice since this is final.
Unipessoal entrepreneur with limited liability (EURL)
EURL is the types of companies in France more frequently. It is regarded as a public limited company formed by a single partner, and is therefore subject to the same rules applied to a conventional limited liability company with a few exceptions.
To open a business, you need at least one partner (individual or collective) and the value of the minimum capital required is determined by the partner and will depend on the size of the activity, the activity and the company's capital requirements. That is, if this initial capital is not consistent with these parameters, the responsibility may fall on the personal level manager. These contributions to the capital can be made in cash or something that has monetary value. At the time of the company's constitution, at least 20% of cash contributions must be made available.
To create a EURL, preparation of statutes is mandatory. O Formalities Center of Enterprises (CFE) provides a type of model statutes where the entrepreneur must fill properly. Then must send the company registration application to the relevant authorities.
Operation of a EURL
The partner's liability is limited to the value of their contributions, unless this is the manager and has committed a fault in the company's management or committed tax fraud. In this case, the responsibility may lead to your personal property.
In addition, this company requires the appointment of one or more managers who will handle administrative affairs of this. These individuals must necessarily be an individual, may be the single partner or else a third. Their appointment and powers are represented in the company's statutes and in the absence of legal restrictions they have full power to make decisions of this.
There is no taxation at the level of society, left to the discretion of the company chooses the partner's income tax or the corporation tax.
Limited liability company (SARL)
SARL is the most common form of company in France. For these opening business types in France They are needed at least 2 partners and a maximum of 100 partners, and these may be natural or legal persons.
Share capital is not mandatory. Instead, this is determined by the partners and will depend on the size of the activity, the activity and the capital requirements of the company. That is, if this initial capital is not consistent with these parameters, the responsibility may fall on the manager and/or founding partners in a personal way. These capital contributions can be made in cash or anything that has monetary value. In addition, at least 20% of cash contributions must be made available at the time of incorporation of the company. Although this capital is variable, it must remain between a minimum and a maximum defined in the company's statutes, thus there is no capital reduction without legal notice or without amendment of the bylaws.
Operation of a SARL
In terms of responsibility, there is a distinction between the two types of partners: simple associates and managers. The liability of associates is limited to the amount of their contributions while managers also have their limited liability, unless there is some failure at the administrative level of the company. In that case, your liability may entail your personal property.
SARL is administered by one or more appointed managers within the partners or a third party. Their appointment and powers are represented in the company's by-laws and, in the absence of legal limitations, they have full power to make its decisions.
Partners meet at least once a year in an Ordinary General Assembly (AGM). Here, matters such as the annual approval of accounts and ordinary decisions are discussed. For decisions that result in a modification of the statutes, an Extraordinary General Meeting (AGE) must be called.
Finally, the company's profits are subject to corporation tax. However, it is possible to opt for income tax if the company is constituted by a family (parents, siblings, spouses, among others).
Sociedad Anónima (SA)
Estes business types in France they are generally found associated with large businesses where several individuals, natural or collective, meet. Here, ownership is based on the capital you invest in this company. There is no maximum number of partners, however, a minimum of 2 or 7 is required in the case of a publicly traded company.
For the opening of this Type of company a minimum share capital of €37 000 is required, at least half of which must be provided at the time of incorporation.
Operation of an SA
In terms of responsibility, there is a distinction between the two types of partners: shareholders and directors. The liability of shareholders is limited to the amount of their contributions while directors can respond personally in the event of corporate misconduct.
An SA is formed by a Board of Directors, a President and CEO. However, they can also be managed by a Supervisory Board and a Board of Directors.
In a normal structure, a Public Limited Company is managed by a Board of Directors made up of 3 to 18 shareholders. This council determines the guidelines for business activity. The executive director appointed by this board, or, failing that, the chairman of the board of directors, is responsible for taking the company's administrative decisions and represents the company in meetings or negotiations with third parties.
There are two types of meetings in this type of company: Ordinary General Assembly (AGO) and Extraordinary General Assembly (AGE). The frequency of occurrence of these is not regulated. Shareholders meet at least once a year for an AGM where the annual approval of the accounts and ordinary decisions are made, requiring a majority of votes to be accepted. At an EGM, more radical topics are addressed such as amendments to the bylaws where approval by a 2/3 majority vote is required.
The appointment of an auditorium is not required unless the balance is more than € 4 million, turnover of more than 8 million € or the company has more than 50 employees.
Registration of a SA
Registration of a Limited Company in the Commercial Business Register (CER) has a cost of € 39.42. As the department that this is included, the registration in the Business Directory (DM) has an average cost of 130 €. If the company is publicly traded, it must be paid a publication fee of a legal notice which has an average value € 230, varying with the department concerned.
Finally, the profits of such company are subject to corporation tax.
Corporations Simplified (SAS)
For the opening of these business types in France you need a minimum of one or more partners, whether natural or legal. There is a maximum number of partners. The minimum capital is set freely by the partners and depends on the size, activity and the company's capital requirements. However, at least half the value of cash contributions must be paid at the time of the merger.
Operation of an SAS
A SAS may not make a public offering of financial securities or admission to trading on a regulated market in its shares. However, it may make offers of financial securities if they are intended exclusively for qualified investors acting under its own name or asset management companies acting on behalf of third parties.
In terms of responsibility, there is a distinction between the two types of partners: the simple associates and the head. The liability of simple members is limited to the value of their contributions. On the other hand, the superior can respond personally in case of misconduct by the company.
A Simplified Joint Stock Company is headed by a single chairman, whether a natural or legal person. The first president of this company must be named in the bylaws. The partners freely determine the conditions for entering and leaving the company in the statutes. However, some decisions must be taken collectively, such as approving accounts, changing capital, among others.
The appointment of an auditorium is not required unless the balance is more than € 4 million, turnover of more than 8 million € or the company has more than 50 employees.
Registration of a SAS
The registration of a Simplified Corporation in the Commercial Registry of Companies (RCE) has a cost of €39.42. Depending on the department it is included in, registration in the Business Directory (DM) has an average cost of €130. The creation of the SAS implies the publication of a legal advertisement that presents an average value of €230, varying with the department in question.
Finally, the profits of such company are subject to corporation tax.
Unipersonal Simplified Stock Company (SASU)
Estes types of company in France has been increasing because it has interesting characteristics for an entrepreneur who wants to create a business alone. It is a derivation of an SAS with the particularity of being constituted only by one partner, singular or collective. This single partner makes the decisions alone, according to the formal rules established in the statutes.
The rules applied in a SAS are applied in a SASU with some particularities. In a SASU company, the president can be the only partner or a third party. The appointment of an auditorium is also not mandatory unless at the end of the second year 1 million euros in the balance sheet is exceeded, 2 million euros in turnover, the average number of employees exceeds 20 employees or if this control other companies.
Partnership Company (SNC)
Estes business types in France they are less widespread than the other types due to the joint and indefinite liability for all their personal property of each of the partners for the company's debts. An SNC is especially geared towards projects between people who know and trust each other. Shares cannot be sold, even between partners, unless they decide unanimously, without prejudice to a contrary clause in the articles of association.
To form an SNC, at least 2 partners are required, singular or collective, and there is no maximum number provided by law. All these must have the quality of trader and it is possible to include minors in this partnership if they have been authorized by the guardian judge or by the president of the high court. No minimum share capital is required for this constitution, which is freely defined by the partners, depending on the size, activity and capital requirements of the company.
Operation of a SNC
An SNC is managed by one or more managers, who can be partners or third parties. If nothing is previously defined in the bylaws, all partners are considered managers. In the absence of legal limitations, the manager or managers of the company have full power to act on behalf of the company.
The partners meet at least once a year in a general assembly where all decisions are taken unanimously, unless the statutes decide otherwise. However, certain decisions must be taken unanimously, including the revocation of the associate manager, the transfer of shares and the transformation of the company into SAS.
The appointment of an auditorium is not required unless the balance is more than € 4 million, turnover of more than 8 million € or the company has more than 50 employees.
Registration of a CNS
The registration of a Partnership Company in the Commercial Registry of Companies (RCE) is free. The only expense that partners have to worry about at the time of incorporation is the publication of a legal notice in the Official Journal of Commercial Associations and Foundations, whose average value is €44 or €150 if this publication exceeds 1,000 characters.
Finally, with regard to the taxation involved, each partner is personally taxed on its share of income tax in the category of industrial and commercial profits. The company can opt for corporation tax.
Cooperative and Participatory Society (Scop)
A Scop is a cooperative society of the type SARL, SAS or SA. Its partners are mostly employees gathered around the same economic project and the same values. These business types in France they can be created in all sectors of activity: commerce, industry, crafts, services, multimedia and some legally regulated professions (architects, veterinarians, among others).
To create a SAS-type Scop, at least 2 partners are required. For a SARL-type Scop, at least 2 partners are required and a maximum of 100. Finally, for an SA-type Scop, the minimum is 7 partners. Regarding the required minimum share capital, the amount of €18,500 is stipulated for a Scop SA, which must be paid ¼ of its value at the time of incorporation and €30 for a Scop SARL or SAS, which must be paid in full at the time of incorporation. of incorporation.
Operation of a Scop
In this company there are two types of partners: the associate employees of the company and the external investors partners. In the first case, no partner can hold more than half of the capital and participate in the company's strategic decisions during the general meeting and their liability is limited to the value of their contributions. On the other hand, these external partners can be natural or legal persons, who do not work in the company and correspond to a minority of it.
In a Scop of the SARL or SAS type, a manager is elected by the partners for a 4 year term, while in an SA type the term is for 6 years. These directors are responsible for the company's misconduct and may be dismissed at any time by the general meeting or the board of directors.
The appointment of an auditorium is mandatory every 5 years in a Scop SA. In other cases, the audit is not mandatory. If the balance sheet exceeds €1,000,000, the turnover exceeds €2,000,000 or the company has more than 20 employees, then it is already necessary.
Registration of a Scop
For a company to qualify as Scop and benefit from legislative regulations, it must be registered by individual decree on a list drawn up by the Ministry of Labour. This list is published every year in the Official Journal.
Registration in the Commercial Register of Companies (RCE) of these business types in France it is free. Thus, the only expense that partners have to worry about at the time of incorporation is the publication of a legal notice in the Official Journal of Commercial Associations and Foundations, whose average value is €44 or €150 if this publication exceeds 1 000 characters .
Finally, with regard to the taxation involved, each partner is personally taxed on its share of income tax in the category of industrial and commercial profits, and the company can opt for corporation tax.
