If you intend to set up a business in France, here is all that you need to know about relating conditions and formalities.
Setting up a business in France is not a difficult process, but it can be quite lengthy and stressful. So if you are planning to move there and be your own boss, you should start by inquiring on the different types of companies that exist in the country and on relating conditions. You should therefore make sure to have all required documents within reach and to be aware of fees applied to different formalities.
First of all, you should start by checking whether any other company already bears the name you have chosen for your company. This is not a compulsory step, but it will avoid you legal hassles in case the name has already been used by another company. You can proceed either online on the Institut National de la Propriété Industrielle website or on the spot.
Note that verification takes place as follows:
- summary verification – free of charge
- verification by researching similar brands (3 classes) – 40 euros
- verification by researching all similar brands – 400 euros.
You will then proceed by depositing the initial capital in a bank account. You then have to depose either before a public notary, or that of the bank or of the Caisse des Dépôts. The capital will be blocked during the registration period. It will then be released when you produce the Kbis form. This step is free of charge.
Thereafter, you have to publish a notice in the Journal Officiel. The notice should include the company's name, that of its manager, the capital invested and the company's head office address. A bill will then be issued, indicating the publishing date. Fees applied amount to 5,48 euros (excluding tax) for each line of 40 characters.
Following that, you are required to deposit the company registration request at the Centre de Formalités des Entreprises (CFE). This entity takes care of all formalities relating with the Registre du Commerce (RCS), the Institut National de la Statistique et des Études Économiques (INSEE), the Tax Center, the Social Security (URSAFF), the Unemployment Insurance, the Pensions Center, Pôle Emploi, among others. Note that these formalities also include registration at the Tax Authorities. Your file must, hence, include the following:
- the company's articles and statutes
- the company's lease documents
- proof of receipt of funds
- documents relating to the manager
- requested forms
- proof of the publishing of the notice in the Journal Officiel.
The CFE automatically transfers information to the National Companies Register, Registre National des Entreprises (Répertoire SIRENE), and thus obtains the RNE: the SIRENE (Système Informatique pour le Répertoire des Entreprises) number, the SIRET (Système Informatique pour le Répertoire des Établissements – regarding tax authorities) number and the NAF (Nomenclature des activités Françaises) number. Fees of some 90 euros apply.
Finally, you have to buy the following company books, either from the Commercial Court of in a specialized shop which is approved by this institution:
- Big book
- Inventory book
These books must be stamped and initialed by the clerk of the Commercial Court. You will need around 45 euros for the three books and less than 4 euros as stamp fees.
Types of companies
The following types of companies can be set up in France:
The Limited Liability Company (LLC) is the most common type of company created in the country. It has a simple structure and each associate's liabilities are limited to their amount of contribution. The capital must be divided between at least two associates, but there is no minimum requirement. The LLC can be managed by one or several directors, whether or not they are associates.
The Uni-personal Limited liability Company has a single associate. It is a particular form of LLC with almost similar operational rules. The main difference is that profits generated by the company are taxed as income tax on behalf of the associate, but there is an option to corporate tax as well.
The Professional Partnership with Limited Liability applies to liberal professions. Its operational rules are similar to those of the LLC. However, it includes particular clauses regarding the specific profession for which it has been set up.
The Public Limited Company involves at least seven partners, each making a minimum contribution of 37,000 euros. This company must be managed by a President and a Director General (it can be a single person). However, the Board of Directors must comprise at least three persons. It also has to appoint an Accounts Commissioner. It is ideal especially if the company is of a certain size and whereby the shareholders do not take part in its activities but have some powers within the Board of Directors. Finally, the shareholders' liabilities are limited according to their amount of contribution.
The Joint Stock Company is ideal for companies comprising several persons. It does not require a minimum social capital. Moreover, appointing an Accounts Commissioner is only necessary when the company is of a certain size or has capitalist links with other companies. It requires at least two associates whose liabilities are limited to their amount of contribution. Partners have the possibility to freely organize its operation in the statutes.
The Simplified Uni-personal Stock Company is a particular type of company which requires a single associate.
The General Partnership is a type of company which has the disadvantage of not protecting the heritage of its associates: they are jointly and severally liable for the debts of their personal properties. The company requires no minimum capital, but involves at least two associates having the status of trader. It can have one or more managers. Moreover, tax applies to its associates in terms of income tax, unless they have chosen corporate tax.
The Professional Partnership, for its part, allows several independent professionals to carry out the same activity commonly. They will therefore be liable to social debts. No minimum capital is required. However, each associate has to pay income tax on benefits.
Institut National de la Propriété Industrielle (INPI) www.inpi.fr
Journal Officiel www.journal-officiel.gouv.fr
Centre de Formalités des Entreprises (CFE) www.cfe.urssaf.fr
Directory of Commercial Courts www.annuaires.justice.gouv.fr