From its favorable business policies to a high standard of living, France is now known as extraordinary a place to work and start a successful company as it is to live a great life.
Opening a company in France is a big leap forward for many entrepreneurs, but before taking the leap, you have to decide which type of company structure suits your business.
The most common business structures in France are:
- Limited liability company – Société a responsabilité limitée (SARL)
- Single-person limited liability company (EURL)
- Private limited liability company (SELARL)
- Joint-stock company – Société Anonyme (SA)
- Simplified joint-stock – Société par actions simplifiée corporation (SAS)
- Simplified single-person joint-stock company (SASU)
- General partnership – société en nom collectif (SNC)
- Sole proprietorship – entreprise individuelle (EI)
- Professional civil society (SCP)
Limited liability company – Société a responsabilité limitée (SARL)
SARL is the most popular form of company in France. It gives the benefit of a simple structure in which the liability of the partners is restricted to the amount of their contributions. This type of companies in France can only be formed by at least two shareholders. And no more than 100 people or legal entities can register a French SARL. No minimum share capital is imposed. A SARL is usually proposed for small and medium-sized companies which are set up in France.
Single-person limited liability company (EURL)
EURL is a frequently used company structure in France. It is considered a public limited company established by a single partner and is therefore subject to the same rules relating to a traditional limited liability company with a few exceptions. The primary difference concerns its tax system: its revenues are automatically taxed on income tax in the shareholder’s name. To create a EURL, preparation of statutes is necessary.
Private limited liability company (SELARL)
The French law adopted the rules of operation of limited liability company and adapt them to the necessities of the liberal professions, and the SELARL was born. These rules are very similar to those of the SARL, but they take into consideration the particularities and ethics of the professions for which they were created.
French joint-stock company – Société Anonyme (SA) / The public limited company
A French SA is considerably similar to a public limited company. The SA is composed of at least two shareholders or 7 if it is listed on the stock exchange, with a minimum share capital of 37 000 €. SA’s Shareholders’ liability is restricted to the value of their share contribution. Shareholders in SAs could be unidentified and could also transfer their shares discreetly so that company management would not necessarily know who owned its shares. But, this facilitated money laundering and tax evasion, so laws were passed to impede this; however, shares can still be maintained by holding companies to hide the real beneficiary.
Simplified joint-stock – Société par actions simplifiée corporation (SAS)
This is a new form of company and it has had some success since its inception. As a result, numerous SAs have been modified into SAS. The SAS designation is comparable to but more adaptable than the SA; it needs just two partners and does not need a board of directors. A president must be assigned by the shareholders and is responsible for the performance of the company. A SAS may also have a General Manager. The SAS entity is often used for solely owned subsidiaries.
Simplified single-person joint-stock company (SASU)
This is a inception of a SAS with the explicitness of being constituted only by one partner. The single partner makes the decisions alone, according to the traditional rules specified in the statutes. The rules applied in a SAS are applied in a SASU with some explicitness. SASU is seldom adapted to a start-up company.
General partnership – société en nom collectif (SNC)
This type of business is less popular in France because of the joint and unlimited liability for all the personal assets of each of the partners for the company’s debts. A minimum of two partners are essential for company formation as far as a partnership is concerned. No minimum capital is imposed for forming a commercial partnership in France. The commercial activities of the partners must be conducted under the same business name.
Professional civil society (SCP)
In France, his form of company enables various persons practicing the same liberal profession to utilize it in common. They are then unlimitedly responsible for social debts. No minimum capital is required and (société civile professionnelle) SPC’s profits are taxed on earnings tax at the level of each partner.
Sole proprietorship – entreprise individuelle (EI)
This is a type of legal entity with only one founder. The founder is entirely responsible for all debts and obligations. No initial capital is assigned for this type of company in France.
Starting a company in France is certainly one of the ideal ways to tap the whole European market and enjoy its multiple benefits. If you are ready to register your business in France, go ahead and contact your Damalion expert now.
