The company formation procedure in France is usually based on document gathering and other procedures such as drafting the articles of association, the specimen signatures, affidavits and other special forms, as well as performing public notary procedures and certified translations. Usually, a French registered office is also required for starting a company in France in order to have a mailing address to communicate to the partners and French authorities. Opening a bank account and hiring a local accountant are also required for setting up a company in France.
We invite you to watch a video about how you can set up a company in France:
Types of business entities in France
A private limited liability company, the French SARL (societe a responsabilite limitee)
is formed by at least two individuals or corporate bodies, with 1 Euro as a minimum share capital. The initial capital is decided in the articles of association by each legal entity. The liability of the entity’s members is limited in extend to their contribution to the capital. The management is assured by individuals appointed by the general meeting of the shareholders and they are called directors. An auditor is necessary to be appointed if the company meets two of the following conditions: it has more than 50 employees, a net turnover over 3.1 million EUR or a total balance sheet over 1.55 million EUR.
A SA (societe anonime) is a form of business established for major businesses and must be formed by at least seven members, corporate bodies or individuals. It is mandatory that at least one member is an individual. The minimum share capital of this business is 37,000 EUR (from which at least half must be deposited at registration and the other half in maximum five years). The management is assured by a board of directors with three to 18 members appointed by the highest instance in the company, the general meeting of the shareholders. Unlike the private limited liability companies, the appointment of an statutory auditor is mandatory.
Another form of business is the French SAS (societe par actions simplifiees) formed by at least one member. There is a minimum share capital of 37,000 EUR. The management of such company is assured by at least one director and the appointment of an auditor is mandatory only if one of the following conditions is met: the company has more than 20 employees, the pre-tax turnover exceeds two million EUR or the total balance sheet exceeds one million EUR.
The SNC (societe en nom collectif) is a form of business formed by at least two partners with no minimum share capital. The particularity of this type of business is that the partners are liable in extend of their personal assets for the entity’s liabilities.
The SCS (société en commandite simple) is formed by a general partner and a silent partner. The silent partner is providing capital and it is considered liable only in extend of that capital, while the general partner doesn’t provide any capital and he is considered liable even with its own assets for the entity’s liabilities. The major decisions are taken by the general partner, while the silent partner cannot take part of the management.
The SEL (société d'exercice libéral) is a rare form of business established by professionals in order to allow those to exercise their professional activity in the form of companies.
The EURL (entreprise unipersonnelle a responsabilité limitée) is a hybrid between a limited liability company and a partnership which doesn’t require a minimum share capital and with the personal assets of the owners not protected in case the company has outstanding debts.
Incorporation procedure in France
At the beginning of the incorporation, the company name must be checked on the Institut National de la Propriété Industrielle (INPI) website. If the name is unique, a certificate of reservation will be issued and the entity can proceed with the rest of the operations.
The minimum share capital has to be deposited in a bank account and a certificate stating the amount must be received so this is the folowing action an entity must take.
The registration at the Centre de Formalités des Entreprises (CFE) in France which is a single body for statistics, tax authorities, social security, labor and health insurance is mandatory for all the entities which will perform business in France.
In order to do that, the entity representative must file a request for registration, followed by submitting the articles of association, the bank certificate stating the capital deposit, a proof that the specific Gazette has received a notification regarding the establishment of the new company, the structure of the entity and its purposes, the addresses of the managing board and the chosen address of the company.
The CFE sends the necessary information to every office and authority in order to be registred and enters the company in the Registre Nationale des Entreprise. As a result, the newly formed business will receive the SIRENE (Systéme Informatique pour le Répertoire des Entreprises), SIRET (Systéme Informatique pour le Répertoire des Etablissements) and NAF (Nomenclature des Activitees Francaises) numbers.
The last step of the company incorporation in France consists in buying the special accounting book from Commercial Court or authorized stores. The cost of books was around 40 EUR in 2012.
Economy overview in France
France is one of the most powerful countries in terms of economy, especially due to its size and location, as well as the membership in many European organizations, which make it a key jurisdiction for starting companies. Besides, it is one of the most industrialized countries in the world. Anyhow, French economy is characterized by a large industrial base, important agricultural resources and a highly trained workforce.
Foreign investments in France are very popular and the government encourages entrepreneurs to come and open companies in France. As a matter of fact, there are over 20,000 foreign companies in France at the moment, considering that many statistics situated France as the first destination for foreign investment in many classifications. In 2010, there have been 782 new foreign company formation projects in France, according to the Invest in France Agency, most of the capital being absorbed by Paris.
The main industries in France are: aerospace, tourism, industrial machinery, automotive, pharmaceuticals, food and beverages, printing. The private sector is well-developed in France.
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Our company formation agents will provide you more details about how you can set up a company in France. The local and foreign entrepreneurs may contact us for information and legal assistance for company incorporation in France.