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Types of French Companies

Updated on Wednesday 30th September 2020

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Whenever an entrepreneur decides to set up a company in France, he or she must be aware of all the types of companies and choose the best structure that suits their interest and objectives in terms of business in France.

Below, our company formation agents in France offer a brief overview of all the types of companies in France available for registration in this country.

What types of companies in France are available?

  • French joint stock company (société anonyme - SA)

A minimum of seven shareholders is required in order to set up a French SA. The founders can either be individuals or legal entities. The initial share capital is 37,000 EUR for company formation in France. The capital is divided into shares and the shareholders have a limited liability to the extent of their share contribution.

  • French limited liability company (société a responsabilité limitée - SARL)

This type of business in France can only be incorporated by at least two shareholders. No more than 100 individuals or legal entities can form a French SARL. No minimum share capital is required. This structure is usually recommended for small and medium-sized companies which are set up in France.

  • Simplified stock corporation (société par actions simplifiée - SAS)

This is a similar company to the joint stock corporation, but it is more flexible, and it requires only two partners for company formation in France. A chairman or president must be appointed by the shareholders.

  • French sole proprietorship (entreprise individuelle)

When only one founder decides to set up a company in France, the best choice is a sole proprietorship. The founder is fully liable for all debts and obligations. No initial capital is required for this type of company in France.

  • Commercial partnership (société en nom collectif - SNC)

At least two partners are necessary for company formation as far as a partnership is regarded. Partners are responsible for the obligations and debts of the partnership to the extent of their personal assets. No minimum capital is required for setting up a commercial partnership in France. Commercial activities of the partners must be performed under the same business name.

The subsidiary in France

The subsidiary is one of the most common types of structures employed by foreign companies seeking to operate on the French market. The subsidiary is an independent entity which can be established under the form of a limited liability company. The main characteristics of the subsidiary company in France are:

  • -          it can undertake other activities than the parent company’s main object of activity;
  • -          as a limited liability company, the subsidiary will be considered a local company in France;
  • -          the subsidiary is considered a tax resident and will be subject to the corporate tax in France;
  • -          it will need to apply for licenses and permits like other types of French companies.

Even if the subsidiary is independent of the foreign company, it will be the parent company to have the ultimate control and management decisions with respect to the activities of the French subsidiary. Also, the parent company will have a limited responsibility for the obligations and debts acquired by the subsidiary.

You can also read abut the types of companies in France in the scheme below:

Types-of-companies-in-France

Opening a branch office in France

Another popular type of company in France which can be employed by foreign companies is the branch office. This type of company, however, is fully dependent on the parent company which must establish it by passing a resolution which will be filed with the French Trade Register.

Branch offices are required to undertake the same activities of the parent company and are a good option for foreign companies interested in operating in France for a longer period of time. The parent company will have full control over the branch office and will also be liable for the French structure’s obligations.

Compared to the subsidiary, the French branch is easier and cheaper to create. Another advantage of the branch office is that it will be taxed in France only on the incomes generated here. Also, the branch can benefit from the many double tax treaties signed by France. Sometimes foreign investors who open a branch or a subsidiary are also interested in moving to France or another European country. We can help them get in touch with our local partners specialized in immigration issues.

The liaison or representative office in France

Another less employed type of company in France is the representative office. Also known as a liaison office, this type of structure is only created for non-commercial activities. However, the liaison office must still be registered with the Trade Register.

A French representative office can only undertake marketing activities or can be used to research the market before the foreign company decides to open a branch or subsidiary here. The main advantage of the liaison office is that it does not have to pay any taxes in France.

Requirements for opening various types of companies in France

No matter the type of company in France chosen for registration, the following formalities must be completed:

  • -       in the case of joint stock companies, at least 50% of the share capital must be deposited upon formation;
  • -       in the case of private companies, at least 20% of the capital must be deposited when incorporating the business;
  • -       the private company can have one or two directors; however, the minimum number is one;
  • -       the public company must have a board of directors comprised of 3 to 18 members.

French companies are also required to appoint auditors who will verify their accounts. The accounting of a company can also be outsourced.

We invite you to watch a video about the types of companies in France, helped by our experts:

Documents related to company registration for different types of companies in France

Foreign investors who want to open companies in France must submit the following with the Trade Register:

  • -       their personal information under the form of residence permits, passports, and IDs;
  • -       the forms issued by the Trade Register which must be filled out;
  • -       in the case of companies, the Memorandum and Articles of Association;
  • -       in the case of partnerships, the partnership deed or agreement;
  • -       information about the company directors, in the case of SAs, SARLs and SAS companies;
  • -       a bank account statement showing the deposit of the share capital.

For complete information on the types of companies in France please feel free to contact our local company registration advisors. If you need legal services in other countries, such as New Zealand, we can put you in touch with our local partners.   

 

Meet us in Paris

Call us now at +33 9 73 22 01 51 to set up an appointment with our lawyers in Paris, France. Alternatively you can incorporate your company without traveling to France.

As a BridgeWest client, you will beneficiate from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in France.

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