Where a subsidiary company is incorporated in France, the filing requirements are less
extensive. A foreign company investing in France would generally incorporate or acquire
shares of a company, SA, SAS or SARL.
The French private limited company has the attributes of both the partnership and the
corporation. It has limited liability and limitations on interest share negotiation.
The procedures for setting up a company are:
• Drafting the Memorandum and Articles of Association;
• Deciding on the capital structure and amassing the capital itself;
• Depositing the funds for cash subscribers;
• Obtaining the depositary's certificate of funds paid in;
• Signing the Memorandum and Articles of Association;
• Selecting management;
• Complying with publication and registration procedures:
- Announcements in legal journals,
- Filling the articles with the Commercial Court,
- Registration with the Register of Companies,
- An announcement in the BODACC (the official bulletin of commercial and
civil announcements),
» Private Limited Companies
• SARL: Société à Responsabilité Limitée
An SARL company is a limited company with at least two shareholders and a maximum of 100
with a minimum capital of 1€.
The liability of the shareholders, of whom there must be at least two, is limited to
their investment. In principle, a shareholder may sell or otherwise transfer his or her
shares only with the consent of the other shareholder(s).
The manager's status is akin to that of an employee if s/he is a minority or equal
shareholder.
This type of company is appropriate for a medium-sized business not requiring a large
amount of financing. It is the simplest type of limited-liability company other than a
one-man company.
The Company is subject to Company Income Tax (Impôt sur les Sociétés - IS) or to
Personal Income Tax (IRPP) for a family SARL.
• EURL: Entreprise Unipersonnelle à Responsabilité Limitée
An EURL company is a limited-liability company with a single shareholder and a minimum
capital of 1€. It is more complicated to organize such a company than to do business
as a sole proprietor.
However, the sole shareholder's legal liability for the company's debts and losses is
limited to his or her investment in the company even though s/he is in full and sole
charge of the business. (It must be borne in mind as a practical matter, however, that
persons contracting with such a company usually require the owner to sign a contractual
guaranty of the company's liabilities, in which event s/he is liable for the company's
debts to the extent specified in the guaranty contract.)
The Company is subject to Company Income Tax (Impôt sur les Sociétés - IS) if opted
for or to Personal Income Tax (IRPP) for a family SARL.
• SAS: Société par Actions Simplifiées
Since January 1st 2009, a SAS must have a minimum capital of 1 Euro that can also be
constituted of equipment contribution if alloswed by the Articles of Association.
It must have at least one shareholder, which can be a company and whose liability is
limited to the investments.
The organization and operation of such a company are defined in the articles of
incorporation in accordance with the common wishes of its members.
- They appoint the Company Chairman and, where relevant, define the
other organs of the company, together with the Chairman's powers for managing the company.
The Chairman alone represents the company before third parties; the other directors
appointed in the statutes do not legally represent the company before third parties.
- They appoint Auditors by common agreement for a minimum period of 6
fiscal years. Since January 1st 2009 and the LME (Law to Modernize the Economy), this obligation applies only to companies above two of the following three thresholds:
- Balance above 2 000 000 €
- Turnover above 1 000 000 €
- Staff above 20 employees
The Company is subject to Company Tax (Impôt sur les Sociétés - IS).
» Public Limited Companies
• SA: Société Anonyme
A public company must have a minimum capital of 37,000 euros, at least 50% of which must
be paid in when it is incorporated and the balance over five years.
It must have at least seven shareholders whose liability is limited to their investments.
The board of Directors must have at least three directors with a maximum of 18.
The shares are negotiable and there is no legal restriction on transfers of shares,
although the shareholders may agree to share-transfer restrictions in the company's
charter.
A public company is more complicated and expensive to incorporate and operate than a
private limited company. It is suitable for a business requiring a large amount of
capital.
Such companies can make public offerings of shares and bonds.
The appointment of Auditors for 6 fiscal years is obligatory.
The Company is subject to Company Income Tax (Impôt sur les Sociétés - IS).
» Comparison Table
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