France is renowned for its complexity in legal matters when setting up a company. We’ll try to explain clearly the main steps to follow for the installation of a company. Here we can only develop the most common procedures knowing that it will vary along with the cost depending on your personal situation, the planned activity and the project.
OPERATIONS COMMON TO ALL COMPANIES:
- Market research:
It must determine the product that will be sold or manufactured or the service that will be provided. He will also determine the geographical area of the company, choose the site of sale or production and the commercial name of the company.
This study will lead to a business plan.
- Professional premises:
The contractor can buy them or rent them. In the first case the act of purchase requires a period of several months to materialize. In addition, it is necessary to release a financial contribution. The purchase must be avoided if, at the end of the transaction, there is insufficient liquidity to finance the working capital of the activity.
In the case of rental of premises, the company may conclude a commercial lease for a period of 9 years renewable indefinitely. In this case, the contractor must scrupulously check all the clauses of the contract.
It can also conclude a "precarious lease" but the duration of it cannot exceed 3 years.
When the activity does not require a permanent place, it is possible to use a domiciliation company. The domiciliation of company makes it possible to have a mailbox in a permanent way as well as an office punctually. This leads to fewer commitments.
- The professional bank account:
All companies (with the exception of individual entrepreneurs who have not opted for the "MICRO ENTREPRISE" scheme) must hold a specific bank account.
At the same time that the entrepreneur opens an account with a bank, he must negotiate the financing of his investments and his future cash requirements. These amounts are determined by the business plan.
The opening of a bank account is essential for the creation of a company, the deposit of the amount of the capital on an account opened in the name of the company being constituted is a prerequisite to its registration.
- Special authorizations:
The business owner must inquire to know the diplomas or special authorizations that must be obtained to practice his profession in France.
Here is a list (not exhaustive) of the most common professions that require additional formalities:
- liberal professions (for the most part),
- Real estate agents,
- Tour operators,
- Foreign entrepreneurs or managers:
There is a distinction between resident and non-resident leaders.
Non-resident nationals of E.E.C., E.E.E. or any other country only need an outstanding passport.
With regard to resident leaders, the situation is as follows:
- Nationals of the E.E.C. or E.E.E.: No residence permit is required but they must register with the town hall of the municipality of residence.
- Nationals of other countries must obtain a longstay visa from their diplomatic authorities and then ask in France for a "Carte de séjour temporaire" bearing the mention “Entrepreneur” or “Profession Libérale”.
SPECIFIC OPERATIONS RELATED TO THE LEGAL STRUCTURE:
- Individual Company and E.I.R.L.:
- The individual contractor: He can protect all of his real estate assets against further action by the creditors of his company by having a notary write a "DECLARATION D’INSAISISSABILITE". The real estates must not be for professional use.
It should be noted that since the law of August 7th 2015, his principal residence is protected by right.
For the constitution of the company, the main documents to be filed (with the C.F.E. of the "CHAMBRE DE COMMERCE" for traders, the C.F.E. of the "CHAMBRE DE METIERS" for artisans or the U.R.S.S.A.F. for the liberal professions) are the following:
- PO printed,
- Lease contract or title of the premises,
- Copy of the identity document or passport,
- Declaration of non-penal conviction and filiation,
- Proof of authorization for regulated activities,
- Check from approximately € 210 to 250 for the formalities of creation (the procedure is free with the U.R.S.S.A.F.).
Precision: C.F.E. is “Centre de Formalités des Entreprises”.
- If the creator opts for an E.I.R.L.: In this case he must also provide
- A declaration of allocation of his professional heritage in order to protect his personal patrimony,
- A form P. E.I.R.L.,
- An assessment by an auditor, a chartered accountant, a management association or a notary for all assets allocated to the company's (only assets that have a value of more than € 30,000).
- If the creator joins a management center or an approved management association: This membership is not mandatory but it allows the individual entrepreneur to enjoy the following benefits:
- 20% discount on the amount of his taxable profit,
- Deduction of the salary of his spouse up to € 17,500 per year,
- Possible tax reduction of up to € 915 per year for accounting expenses.
In this type of society, all the partners take the status of tradesman, craftsman or liberal professional. The formalities are therefore comparable to those required to register an individual entrepreneur.
However, an important point regarding the registration procedure with C.F.E. is worth noting. As the legal structure is that of a company, the documents to be filed are those which will be exposed in the chapter "Capital companies".
Membership in a management center is possible in this type of company but it must be operated by each partner.
- Capital Companies (S.A.R.L., E.U.R.L., S.A.S., S.A.S.U., S.A.):
In these companies only the managers take the status of tradesman or craftsman and the responsibility of all the partners is limited to the amount of their capital contributions.
The founders must be attentive when drafting the statutes. Indeed, the articles will provide a set of rules relating to the formation of capital, the management of the company, transmissions of shares, sharing of profits etc ... These rules will remain permanent unless there is a statutory amendment.
The constitution procedure is as follows:
- Deposit of the amount of the capital with a banking organization,
- Appointment of the leaders,
- Publication of a notice of incorporation,
- Filing of the file with the C.F.E., the file consisting mainly of:
o Form M O,
o Statutes of the society,
o Director designation act,
o Certificate of publication of the notice of incorporation,
o Certificate of deposit of the funds representing the capital,
o Lease or deed of the premises,
o For each officer: proof of identity (residence permit if resident abroad), and certificate of non-conviction,
o Documents relating to beneficial owners,
o Check for approximately € 63 for formalities (the amount may be higher if it is a buy-back.
- Registration in France of a foreign company establishment:
This is a relatively simple operation and avoids the formation of a new company when a person has a company in another state.
The main documents to be filed at CFE are:
- Form MO,
- Declaration of non-conviction of the responsible person in France,
- Copy of his identity card or his passport or his residence permit,
- Copy of the lease contract or the deed of ownership of the premises,
- Copy of the certified translated company's articles of association,
- Check for an amount of 70.39 € for formalities.
There are a multitude of choices available when starting a business.
The formalities can vary considerably depending on the choice made and the mode of creation of the activity (creation or redemption of an existing business).
We can advise you when choosing one of these options and assist you to take the steps.