Associated files

Incorporation on the Trade and Companies Register

Incorporation on the Trade and Companies Register is essential. Leading to attribution of a SIREN code issued by the INSEE and notably by the issue of a kbis (company registration certificate) by the registry office at the Commercial court, this is the condition for exercising the majority of rights and obligations of companies who should normally be subject thereunto and the legal performance of activities.

Read more

The articles of association of a company

The articles of association constitute the company's founding charter. They give the company its individual character and materialise its main characteristics, especially its objectives and general operation with regard to partners, shareholders and the parties. They are mandatorily set in writing.

Read more

Mothballing a company

Mothballing a company who is the voluntary suspension of a company's activity for a maximum period of two years; it is performed with no other reason for suspending operations. This is therefore a transitory suspension of the company's activity, without its dissolution being requested.

Read more

Last published

The minutes of general meetings for approval of the annual accounts of commercial companies

Once a year, the annual accounts for the last financial year, i.e., the balance sheet, the profit and loss statement and the notes, must be approved of the Annual General Meeting. More specifically, in most commercial companies (SA, SAS, SNC, SCS, SA, SARL etc. ), the members of the executive bodies are liable to heavy criminal and civil sanctions for management error, if they breach the obligation to submit annual accounts for approval by the partners or shareholders. For this reason, the members of these executive bodies must demonstrate that they have indeed submitted the company's annual accounts for the preceding financial year for approval by the partners or shareholders, who generally meet in Annual General Meeting, by drawing up minutes of the general meeting. The approval of the annual accounts is therefore strictly regulated. By approving these annual accounts, these partners or shareholders implicitly demonstrate that the documents concerned contain data that has been prepared on a true and sincere basis. They also presume that, as of the closing date of each financial year, these annual accounts reflect a faithful picture of the assets, the financial position and the book profit (or loss) for the companies' business. More generally, the approval of the annual accounts represent the indispensable tool to provide a minimum of information on the main accounting parameters, financial management and operations of commercial companies. They are therefore an essential decision making tool aiding the diverse interests of any interested person (directors; shareholders; investors; government authorities; creditors, such as bankers, suppliers; customers; competitors; commercial courts and potentially other judicial authorities, responsible for preventing and dealing with companies in difficulty) near or far, through access to the company's business data as well as by their financial, accounting and management position. For all these reasons, it is vital that the annual accounts must be approved in strict compliance with the statutory requirements.

Read more

File : Which articles of association for what business?

Part 3

What is the correct legal form for civil (non commercial) activities?

What is the correct legal form for 'civil' (non commercial) activities?

The legal forms for operating 'civil' companies are more varied than those for commercial companies.

The auto-entreprise [sole trader] for tradesmen or professionals

The auto-entreprise [sole trader] can be formed to operate a civil business (one that is not commercial), trade or profession.

Operating as a tradesman requires the 'auto-entrepreneur' (sole trader) to register in the Directory of trades, through the Chamber of Trades, if he/she fulfils the conditions for this activity.
These conditions mainly include the following:
- Carrying out a production, transformation, repair business or providing services. This type of activity must be on a list drawn up by decree and available through the chambre de métiers [chamber of trades].
- The tradesman works on his own behalf and not on behalf of another natural person or entity.
- He has obtained qualifications or has the necessary skills to perform this activity.

Nevertheless, when the activity is exercised on an incidental basis, in other words, if the sole trader is in addition gainfully employed in another company, he may, in some cases, obtain an exemption from registering in the Trades Directory.
Good to know: Only companies with a turnover under the threshold of €32,600 for a full calendar year (for activities concerning industrial and commercial profits) are entitled to use the legal form of auto-entreprise [specific type of sole trader in France].


A professional activity can be exercised in the form of a auto-enterprise provided the person belongs to the CIPAV (state retirement fun) for state retirement contributions. Membership of this body is reserved for those who have independent professional activity for which there is no other specific state pension fund. Those concerned by CIPAV who can therefore create an auto-entreprise, include consultants, experts, trainers, technicians, surveyors, sports and tourism professionals ... However, for example, lawyers who exercise a professional activity but already depend on a mandatory specific pension fund (the CNBF, Caisse Nationale des Barreaux francais) cannot create an auto-enterprise.
Good to know:Only companies with a turnover under the threshold of €32,600 for a full calendar year (for service provision generating non-commercial profits) are entitled to use the legal form of auto-entreprise [sole trader].
NB: a farmer may not run his business under the legal form of the auto-entreprise However, it is possible to create an auto-entreprise in order to exercise an separate business from his farming business: he can therefore set up a commercial, professional or artisanal business in addition to his farming business.

 

The tradesman, professional or farming enterprise individuelle [sole trader]

The legal form of the entreprise individuelle artisanale [sole tradesman] is in fact that of the tradesman or artisan. This type of company must be registered in the Directory of trades, through the Chamber of Trades.
The legal form of the entreprise individuelle libérale (professional sole trader) is that of the professionnel libéral (self-employed professional). This type of company must be registered with URSSAF
The legal form of the entreprise individuelle agricole (sole trader - farmer) is that of the professionnel agriculteur (professional farmer). This type of company must be registered with Chamber of agriculture

Good to know: The commercial agent represents a specific type of entreprise individuelle [sole trader]. This is a natural person, exercising a 'civil' (i.e., non commercial) activity, who receives a commission on turnover, registered with the special register of commercial agents (RSAC held by the registry office of the commercial court), and not at the Trades and Companies Register nor at the Chamber of trades. He is an authorised representative, charged with negotiating and possibly signing sales contracts, purchasing, hire or service provision agreements in the name of and on behalf of commercial companies and manufacturers. He can exercise his activity in the form of a company and, in this case only, the company must be registered with the [Trade and Companies Register] RCS

 

Access the form for the registration of commercial agents

Companies having a civil purpose

The companies which are 'civil' in nature (and therefore have a non-commercial purpose) are registered with the Trades and Companies Register, at the registry office of the commercial court:

-Société civile (company with a non-commercial purpose): this legal framework is reserved for the business activities that are professional, agricultural, intellectual in nature or concern real estate. This company has at least two shareholders. Its share capital, freely set by the articles of association, has no minimum requirement.

-SCM (non trading 'civil' company): it is a structure reserved for professionals who are not permitted to carry out a commercial activity but the company's purpose is to supply of material resources to facilitate the business of its members' This company must have at least two shareholders. Its capital, freely fixed by the articles of association, has no minimum requirement.

-SCP (professional partnership with a non commercial purpose): allows natural persons to jointly exercise a regulated profession . This company must have at least two shareholders. Its capital, freely fixed by the articles of association, has no minimum requirement.

-GAEC (farmers collective): allows the joint development of the farms in the collective. It can also be used to sell the collective produce produced by the partners. This collective can have from two to ten main farming partners. The minimum share capital is €1,500.

-EARL (farm with limited liability): this 'civil' company has an agricultural purpose. The number of partners can be between one and ten. The minimum share capital is set at €1,500.

 

Commercial companies,

A professional or agricultural activity may be exercised in the form of a commercial company, registered at the Trades and Companies Register.

Exceptionally, if a tradesman also exercises a commercial activity, it must also be registered with the Trades and Companies Register.

 

The sociétés d'exercice libéral (SEL) [professional companies]

The société d'exercice libéral (professional company) (SEL) joins the ranks of the types of companies which professions may create to exercise their business. These companies can take different forms:

-SELARL (professional company with limited liability) whose share capital can be freely set by the articles of association.
-SELAFA (limited professional company) which has a minimum share capital of €37,000.
-SELAS (simplified joint stock professional company) whose share capital can be freely set by the articles of association.
-SELCA (professional partnership) which has a minimum share capital of €37,000.

The amount of the share capital of these professional companies depends on the legal form adopted. It is therefore modelled on the share capital required for the conventional capitalised companies such as the SARL, the SA, the SAS or the SCA.

These professional companies are registered with the Trades and Companies Register, at the registry office of the commercial court:

 

Associations

By principle, the activity of an association under the "Act of 1901" is not for profit. The search for profit is therefore not its goal but the means of achieving it. Therefore, even if the association exercises a commercial activity, it is not normally required to register with the Trades and Companies Register.
However, the registration with the Trades and Companies Register is mandatory when the association, has both exercised an actual economic activity for at least two years, and has issued bonds with or without a public offering. This obligation meets the concern to inform and protect third parties likely to apply for these bonds.