Register a company in France

Register a company in France

If you wish to develop and create your own activity in France, here are the main features of the most used legal forms.

Create a branch

The branch allows you to operate directly with your originating company (for instance: the UK) without having to physically open a subsidiary. The same company operates, and is registered under its own Commercial Registry number (“numéro SIRET”), but operating via the “parent” directly in France (it does not have a separate legal personality). It is usually a good way to have a first establishment in France, with all support from the parent company. The branch still does have to pay corporate tax and VAT in France, and must register the parent company’s account at the Commercial Court Registry (“greffe”) each year.

Incorporate a subsidiary

Doing business in France can also be carried out through a proper separate vehicle. Many different legal entities exist, the two main used are limited liability company (“Société à Responsabilité Limitée” also known as “SARL”) and simplified joint-stock company (“Société par Actions Simplifiée” also known as “SAS”).

Both legal forms offer similar protection as to the liability of the shareholders, as they cannot be responsible beyond the amount they brought to the company as share capital, and have similar incorporation process and duration. Nevertheless, they may be different on certain aspects, which could help you decide on the adequate legal form for your subsidiary.

Limited liability company (“SARL”)

The SARL can run indifferently with one or several shareholders, its legal regime is almost fully defined by the Commercial code with provides visibility regarding the way it is managed, as well as some rigidity as everything is defined through its Articles of Association (the “AoA”).

For instance, any general meeting of the shareholders has to be notified by a 15-day period by registered letter with acknowledgment of receipt. Another example is that any share transfer to a third party is submitted to specific approval rules of the majority of the shareholders, and is subject to a 3% taxation (including an exemption for the first €23,000) of the total price.

The main interest for a SARL is the fact that no auditor has to be appointed if the following thresholds are not met:

  • Total of the balance sheet: €1,550,000
  • Total turnover: €3,100,000
  • Number of employees: 50

As long as the company does not meet those thresholds, no auditor is needed.

Simplified joint-stock company (“SAS”)

The SAS can run as well indifferently with one or several shareholders. Its legal regime is inspired by the joint-stock company, without any rigidity linked to the bigger structure implied by this form (usually used as a vehicle to be listed). It runs as a hybrid between the SARL and the joint-stock company.

Besides the legal background, the shareholders are free to personalize their AoA, therefore making it possible to either create a framework that will either be very protective of the shareholders’ interests, or liberalize the conditions to enter the capital.

For instance, the AoA can freely decide on the notification conditions of the general assembly, the way any sale of shares to a third party shall be authorized by the general assembly, if a preemptive right shall be granted to other shareholders, etc.

It is usually the most suited vehicle to be used to have investors enter the company since it allows a full personalization of the AoA, which can be used either to protect the founders or the investors, with, or without in parallel the possibility to conclude a shareholders’ agreement.

On the other hand, if the company is fully owned by a sole shareholder being itself a company, both the parent (if the entity is also French) and the subsidiary must appoint an auditor to certify the accounts, therefore implicating additional annual costs.

Should you need assistance in picking the right legal form that would be most suited to your needs, or any additional detailed information, please do not hesitate in contacting us.

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