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Roche & Cie

The different business entities in France – Starting business in France

09 Oct 2018

Roche & Cie, the specialist in non-residents tax matters in France will help you set up your business and start your activity in France. To help you, we have prepared a brief but precise summary of the different business entities you could use in France.  Indeed, the French administration has established different forms of companies, whose operating rules differ and which do not all have the same consequences as regards the legal liability of shareholders.

The choice of company form also has impacts on the tax and social security systems of the income derived from the activity.

1 – The limited liability company in France (SARL)

The LLC, the type of company most commonly used in the context of business creation in France, it offers the advantage of a simple structure in which the liability of the partners is limited to the amount of their contributions.
Its capital, whose law does not set any minimum amount, is divided between at least two partners. It is managed by one or more managers, partners or not.

2 – The single-person limited liability company (EURL)

This can be considered as a special category of limited liability company as the EURL has only one shareholder.
Its operating rules are very similar to those of the SARL. The main difference concerns its tax system: its profits are automatically taxed on income tax in the shareholder’s name, although an option to corporation tax is possible

3 – The private limited liability company (SELARL)

The law has adopted the rules of operation of LLCs to adapt them to the needs of the liberal professions; so the SELARL was born.
The rules governing it are very similar to those of the SARL, but they take into account the particularities and ethics of the professions for which they were created.

4 – The public limited company (SA)

The SA is made up of at least seven shareholders with a minimum of €37,000. It is headed by a President and a Chief Executive Officer (who may be one and the same person) and by a Board of Directors composed of at least three people.
It is subject to the obligation to appoint an auditor.
The public limited company, because of the cumbersome nature of its operating rules, should be reserved for projects of a certain size. It is also used when shareholders who are not involved in the activity want to exercise a power of control within the board of directors.
Shareholders’ liability is limited to the amount of their contributions.

5 – The simplified joint stock company (SAS)

This relatively new form of company has had some success. As a result, many SAs have been transformed into SAS. However, as a general rule, SAS is not suitable for a business creation by a natural person. Indeed, the rules governing it are similar to those of the SA. However, some measures make it simpler. Thus, no minimum amount for share capital is required. In addition, the appointment of an auditor is reserved for SAS of a certain size or with capital ties to other companies
The SAS must have at least two partners, responsible within the limit of their contributions.
Compared to SA, it offers the advantage of flexibility: the law allows shareholders the possibility of freely organising its operation in the articles of association. This flexibility requires the informed advice of a qualified professional because it can lead to the development of rules that would be difficult to apply later on.

6 – The simplified single-person joint-stock company (SASU)

This is a special category of SAS with only one partner. Only a few operating rules differ from those applicable to SAS, simplifying legal formalism in particular.
Like SAS, SASU is rarely adapted to a start-up company.

7 – General partnership (SNC)

This form of company is rarely used because it has the disadvantage of not protecting its shareholders’ assets: they are in fact indefinitely and jointly and severally liable for the company’s debts on their personal property.
It is constituted without minimum capital, by at least two partners, all of whom are merchants. As such, a minor cannot be associated with it.
It is managed by one or more managers.
The SNC’s results are taxed at the level of its shareholders for income tax purposes unless the company opts for corporation tax.

8 – Professional civil society (SCP)

This form of company allows several persons exercising the same liberal profession to exercise it in common. They are then indefinitely liable for social debts.
No minimum capital is required.
CPC’s profits are taxed on income tax at the level of each partner.

Is the use of the associative form appropriate to develop a company?
You have to be very careful. Because in most cases, the association is not the most appropriate structure. And it can even present certain risks.


Planning to start a project in France, Contact us for assistance


Cabinet Roche & Cie, English speaking accountant in Lyon, France.
Specialist in Real-Estate and Non-resident taxation.