Guide pour register a company in France

The purpose of the Enterprise Formalities Centre is to accelerate, facilitate and simplify business formalities.

In France, they are known as Centres de formalités des entreprises or CFE, which is not to be confused with the cotisation foncière des entreprises, which shares its acronym. They allow companies of any kind (EURL, individual enterprises, public liability companies, etc.) to register in a single place all the documents and declarations concerning the creation or the resumption of an activity, any modification in the situation of the company (for example, changing its name, its main activity, etc.), and the end of their activity (liquidation).

The CFEs thus prevent companies from multiplying the steps with the different organizations where they must be declared (INSEE, URSSAF, RCS, tax services, Registry of the Commercial Court, etc.).

Competences of an Enterprise Formalities Centre

The main objective of a CFE is to constitute a single organism for official formalities concerning enterprises. After receiving and checking the file of a company, the CFE is in charge of sending it to the various institutions concerned. It is important to know that the CFE is also present on the Internet, so the entire business creation process can be done online.

When creating a company, an entrepreneur must first apply to the CFE on which it depends to declare his activity by means of a P0 form (for natural entities) or a M0 form (for multi-associate companies).

The declaration serves to provide all the information about the activity of the company and it must be filed during the first 15 days of activity. In addition, the tax regime to which the company will be subject must also be stated on this declaration.

Once the declaration of existence is deposited, the CFE issues a Business Creation Deposit Receipt (in French, récépissé de dépôt de création d'entreprise or DRDCE) to the director of the company immediately and for free and transmits the declaration of existence to all the recipient bodies: the URSSAF, registry of the commercial court, INSEE, etc. This receipt remains valid until a notification of registration is sent by the pertinent organism, a process that takes a maximum of one month.

Once all the documents are properly registered, the company obtains:

• The registration in the competent official organism according to the nature of the activity of the company (for example, a company that carries out a commercial activity will be thus subject to the Registry of the Commercial Court).
• The company identifiers assigned by the INSEE (SIREN and SIRET numbers, APE code);
• The allocation of a VAT number by the Corporate Tax Service (SIE), which is essential for every commercial transaction within the European Union.

However, although the CFE is normally effective in the process of business creation, it is less efficient for changes in the activity or liquidations of companies, in which case the companies often have to come into direct contact with the organisms concerned.

Although the CFE serves to centralise all the documents of an enterprise, and forwards them to the pertinent institutions, by no means does it take care of the formalities than concern the entrepreneur himself, such as:

• Creating a bank account for the enterprise.
• Drafting the statutes of a company (which has to be done by the associates with or without the assessment of a professional).
• The publication of legal announces in an authorised journal (JAL), although it may in fact act when the announces are to be published in the BODACC.
• The registered address of the company.

The Types of Enterprise Formalities Centres

Depending on the nature of the activity carried out, as mentioned before, the competent CFE will be different. In France, there are five different types:

• CFE of the Commerce and Industry Chamber (known by its acronym as CCI), which is competent for companies dedicated to commercial or craft activities that have more than 10 employees.
• CFE of the Artisanal Chamber (CMA by its acronym), which is concerned about crafts activities unless the company has more than 10 employees, in which case it’s the competence of the CCI.
• CFE of the Registry of the Commercial Court: it is in charge of most companies created in France, such as civil societies (such as an SCI), commercial agents, etc.
• CFE of the URSSAF, which takes care of liberal or freelance professions such as lawyers, architects, engineers, authors, etc.
• CFE of the Agriculture Chamber which, as the name indicates, is responsible for activities related to farming or agriculture.

In order to create a company in France, the associates or shareholders have to put a certain amount of properties at the disposal of the enterprise in order to constitute the share capital.

This deposit of properties is known as contributions (apports in French) and they are three main types: cash contributions, in-kind contributions, and industry contributions.

In exchange for these contributions, the associates receive a proportional amount of shares: social shares (in the case of a SARL or EURL) or stocks (for example, in the case of a SAS or a SASU). The amount of each contribution will thus define the distribution of shares amongst the associates or shareholders. It's important to note that the total amount of capital can vary along the life of the enterprise depending on their needs.

Contributions in cash

The contribution in cash is a deposit of money made by the associates in order to create the social capital of the company. The contribution in cash is made at the time of the creation of the company and it must be deposited in the bank account of the enterprise, in the “Caisse des dépôts et consignations” (a French organism created for investments, which can be translated as Deposits and Consignments Fund) or by using the services of a notary. The total amount will then be put on hold until the registration of the company is effective, which is justified by means of the K-bis extract. However, it is possible to opt for a partial release of said contribution. In doing so, the associates are entitled to provide, at the moment of the creation of the company, only 20 % of the capital planned for the SARL and 50 % for the SAS. The action is known as "liberation of capital" when the total amount of the share capital has been deposited. The terms to determine the contributions in cash have to be stated in the statutes of the enterprise.

Contributions in kind

Contributions in kind can take very different forms. The goods concerned by the contribution in kind are, for example, the merchandise of the company, its real estate, the commercial property, etc.

These contributions will constitute the capital of a company after carrying out an assessment to determine the value of each contribution in kind. Indeed, while it is simple to evaluate a contribution in cash (that is to say in money), the contribution in kind requires a preliminary assessment which will then translate into an equivalence determined in number of shares by means of a contribution treaty. There is often a need for a contribution commissioner, however, it means that the cost of starting the company will be higher. Nevertheless, as an exception, the associates of a SARL can unanimously decide not to resort to a contribution commissioner if they meet these two conditions:

• The contribution in kind does not exceed 30,000 euros.
• The total value of the contributions in kind do not exceed half of the share capital.

Contributions in industry

A contribution in industry is a contribution in determined by the work of the associates or shareholders, and it is materialized by the provision of the associates of their technical knowledge, their work, or the services that they provide and which benefit the company. Nevertheless, this type of contribution isn’t frequently used.

Unlike the other two types of share capital constitution, the contribution in industry does not generate the share capital of the company per se, but it gives the associates the possibility to obtain social shares or stocks. Contributions in industry are recorded in the statutes of the enterprise, where it is indicated to which associate the contribution corresponds. However, the associate concerned still takes part in the decisions of the company by means of voting, and they are entitled to the share of profits and net assets. Indeed, the contribution in industry provides several rights to the associates, but it also represents additional obligations, as they are responsible for the losses that may occur as well.

French companies are identified by the administration and public bodies thanks to two numbers, the SIREN and the SIRET.

The SIREN and SIRET numbers are issued by the French Institute of Statistics and Economic Studies (known in France as Institut national de la statistique et des enquêtes économiques or INSEE. It should be noted that this SIREN or SIRET identifier applies not only to commercial enterprises, but also to crafts professionals and companies, associations, professional unions or administration-related businesses.

The SIREN number

When a company is created in France, the INSEE assigns, once it is registered in the Sirene directory, a unique identifier called SIREN number (which stands for Système d'identification du répertoire des entreprises and can be translated as “Business Directory Identification System”). This unique identifier is used by all public bodies and administrative organisms in their relations with the company.

It consists of a 9-digit number that identifies the company according to the order of registration of the company in the Sirene directory.

The SIREN number remains the same throughout the life of the company and it cannot be changed. With regards to its suppression, it can only happen in the following cases:

• Death or cessation of the activity for a natural entity (such as an individual enterprise).
• Liquidation and dissolution of a legal entity.

The SIRET number

The SIRET number (which stands for Système d’Identification du Répertoire des Établissements and can be translated as “Directory of Establishments Identification System”) corresponds to the 9 digits of the SIREN number followed by 5 additional digits (called "NIC" for Numéro Interne de Classement or "Internal Number of Classification"). These last 5 digits make reference and allow to identify the head office and, if any, the different secondary establishments of a company.

Each company has only one SIREN number, but as many NICs as there are establishments, that is, as many SIRET numbers as establishments.

How to get the SIREN and SIRET numbers?

At the moment of their creation, all companies must submit a registration form via the Internet, by post or on the spot to the CFE, which sends it to the Registry of Commerce and Companies (RCS) as well as to the INSEE. Once the enterprise is effectively registered, it receives a SIREN number which, as mentioned above, is unique and allows it to be identified. Once allocated, the SIREN and SIRET numbers are registered by INSEE in a directory known as Sirene (which stands for Système d’identification du Répertoire des Entreprises et de leurs établissements and which can be translated as “Business and Establishments Directory Identification System”). As soon as the registration of a company is effective, the INSEE sends it a certificate of registration in the Sirene directory which states the following information:

• The SIREN number, which identifies the company.
• The SIRET number, which identifies each establishment of a single company.
• The APE code (activité principale exercée), which identifies the branch of activity of the company. This code is used for purely statistical matters, although it must appear in all the legal documents of the company.

It’s important to know that it's the SIREN number that authorizes the company to issue invoices (and to operate legally in a market). To obtain a SIREN and SIRET number, the company must register in the CFE of the department where its head office is located. Both its SIREN and SIRET numbers will then be mentioned on the K-bis extract of the enterprise, which is an official document certifying the legality of the company and which is obtained after its registration.

Note that a K-bis extract makes reference to the official document sent to a legal entity, whereas in the case of natural entities, it’s called K extract, although the document contains the same information and has the same legal effects.

The Registry of Commerce and Companies is an organism that belongs to the Commercial Court and which is used to register companies.

The RCS is known as “Registre du commerce et des sociétés” or “RCS” in French, and the aim of such organism is to centralise all the legal information of the companies operating in France in a single registry and to communicate their existence to the public. If a company is not inscribed in the Registry of Commerce and Companies, it does not legally exist.

The RCS conditions the rights of the companies registered and regulates their professional activity by acknowledging their existence.

Who has to register in the RCS?

Any enterprise performing a commercial activity, whether it’s a natural or a legal entity, has to register either in a Chamber of Commerce and Industry or in the Commercial Court (in the RCS, for this matter, as it’s the organism in charge). On the other hand, civil right companies (such as a real estate company or a holding company) can only be registered in the Commercial Court.

There are, however, two exceptions when the registry in the RCS isn’t mandatory: In the case of a commercial agent or the EIRL (a type of individual enterprise with limited liability). This is due to the fact that both of them have their own specific registry organisms.

The company has to choose its RCS according to the registered address of its head office, that is, the registry has to be made in the organism operating in the prefecture where the main establishment is located. In case of having any secondary establishment, they will have to be included in the registry as well.

The registry demand is one of the steps to create an enterprise, and it’s made by means of a M0 form (for legal entities) or a P0 form (for natural entities). Once the registry is complete, the company obtains:

• A SIREN number, made up of 9 digits.
• A RCS number, which includes the mention RCS, the municipality of the corresponding RCS, the character “A” (for natural entities), “B” (for commercial companies), “C” (for economic interest groupings), or “D” (for civil societies), and the SIREN to complete it. For example, for a SASU, it would look like “RCS Paris B 123456789”
• A K-bis extract that contains all the company information. In the case of natural entities, they obtain a K extract instead, which essentially contains the same information as the K-bis.

The SIREN and RCS numbers, together with the registered address of the head office and the legal form of the company have to be published in every legal document emitted by the company (such as a contract) as well as the website of the company if there is one.

Having made a correct request to register the company, the RCS will make a publication in the BODACC, although it isn’t necessary for individual enterprises neither for single-associate companies such as an EURL or a SASU. This publication is automatic for the rest of companies and it’s meant to officially inform about the creation of the enterprise or any change in it.

What are the consequences of not being registered?

A company that carries out a commercial activity without having informed the RCS about it is not operating legally. If the activity is detected, a court can decree an ordinance to make the company pay a penalty fee.

Conversely, if the company intentionally gives wrong or incomplete information when registering, it may be requested to pay a sanction of up to 4,500 euros and the director can be sentenced to six months of jail and the suspension of his right to manage an enterprise.

What are the deadlines to register a company in the RCS?

An individual company must have completed its registry in a maximum period of 15 days after having started its professional activity. Alternatively, if the natural entity behind it wishes to, it can be registered up to one month before starting to operate.

With regards to any legal entity, there’s not a minimum neither a maximum period to complete the registry. Nevertheless, it’s generally made as soon as possible after the associates concerned have signed the statutes of the company, published a legal announcement in an authorised journal (known as JAL in France), and have made a deposit of the constitution capital.

What is the cost of the procedure?

The registry of an individual company in the RCS has a rate of 28.68 euros. For auto-entrepreneurs, however, the formality has no cost, although it is compulsory to do it.

For every legal entity, the registration fee is 41.50 euros. However, they have to add as well the price of the rest of formalities that they have to carry out in order to register the company properly, as well as the corresponding VAT for each of them. These fees include, besides the registry in the RCS, the BODACC publication, the publication of the legal announce for the type of legal forms concerned, and the registry in the French Intellectual Property Institute (known as INPI).

A legal notice is an advertisement that mentions the creation of a company.

These legal notices must appear in a journal authorised to publish legal ads (known as JAL in France), and which must be distributed in the district of ​​the head office of the company (it can be a local, regional, or national journal).

The vast majority of legal notices concern the life of companies. They range from the small single-associate limited liability company (called EURL) to the big public limited company (known as SA), which is listed on the stock market. Posting a legal ad is not always mandatory, as in the case of individual companies. Such publication can sometimes be avoided, but most of the time, considering the formalities of company creation, it is necessary to inform third parties of the life of the companies.

When to publish a legal notice

The first publication of a legal advertisement by a company takes place when it is created, following the draft of its statutes. Whatever the chosen legal form (EURL, SARL, SASU, SCI...), the formalities to register the company include the publication of a legal ad in an authorized newspaper that is distributed, as mentioned above, at least on a weekly basis in the department of the head office of the company.

Other cases that involve the publication of a legal notice, which has to be made by the director of the company himself, or any person who represents him are, for example, a transfer of the registered address of the head office, a change of associates or directors, a modification of the activity of the company or its official name, etc.

It’s also mandatory to make two publications in an authorised journal for most of the processes that involve stopping the professional activity or closing the company. The first publication will be made to indicate that the activity is suspended whereas the latter is to inform about either the end or transfer of the company, or the decision to resume the activity. These procedures include, for example, the process of dissolution and liquidation or a “mise en sommeil”.

The legal ad can appear in national an authorised daily journal, such as Les Echos or Le Parisien, or in other regional ones like La Gazette du Val d’Oise, as long as the head office is located in the department. Many newspaper normally request the authorisation to publish legal ads, so a commission, under the control of the prefectural authority, meets every year to study and decide on the list of authorised newspapers for the following year. The list is then published every 15th of December and it can be found online.

Once your advertisement is published, you will receive two documents in your mailbox: a legal certificate of the publication in the journal of legal notices (this document is authentic and is the one that gives the announcement value for legal purposes), and a copy of the journal itself containing your legal notice.

The content of a legal notice

The mandatory information that must appear in any legal notice and which will make up its content in order to make a proper publication is, depending on the type of company, the following:

• The official name of the company, its acronym, and logo.
• The legal form.
• The amount of constitution capital.
• The address of the head office, which can be proven by means of a domiciliation agreement, a lease contract, etc.
• The activity that the company will carry out (to be presented in few words to reduce the cost of the legal notice).
• The duration of the company (normally up to 99 years at most).
• Identity of the Registry of Commerce and Companies (known in France as RCS) corresponding to the company in question.
• Complete names and addresses of the directors and other associates (in the case of SAS and SASU) who have the power to decide on the company.

The information to be included in the legal advertisement comes from:

• The statutes of the company.
• The decisions taken in the general assembly, or by the single-associate, depending on each case.
• Other legal documents at your disposal (the K-bis extract, for example).

As far as the appearance of a legal notice in the journal is concerned, the law stipulates a standard format, as it is not a commercial advertisement. Every legal ad adopts the style of the newspaper in which it appears. Each newspaper has a standard model that applies to the text when you enter it. The only possible customisation of a legal notice is the use capital letters and writing in bold some parts of the text like the name of the company.

The price of a legal ad is fixed by law, so it doesn't matter which journal you choose. However, the price of the publication does vary depending on its length (the price is per line of text, so the longer the text is, the more expensive is the legal notice). Generally, this cost is between 125 and 225 euros without including the taxes.

An individual company refers in France to a type of enterprise without a legal entity.

It means that it’s constituted by a single member or “natural entity”, who will be the only associate and the director of the individual enterprise. By no means can a third party manage an individual company.

There are three main types of individual enterprise: auto entrepreneur, micro enterprise, and limited liability individual entrepreneur (known in France as EIRL). However, the two first ones are now considered to be the same.

Individual companies are one of the preferred legal forms for enterprise creators without any associates in France due to the ease of their functioning, the significantly reduced amount of administrative procedures, and the lower creation costs. It’s important to know that, in general, individual enterprises are thought for entrepreneurs who don’t have a high revenue derived from their activity, and the number of employees they can hire is limited. If a single person expects to have a big company, a unipersonal company (such as a SASU or an EURL) is a more suitable legal form.

Particularities of an individual company

An individual company can be chosen as legal form by almost any type of professional (liberal professionals, commercial activities, artisans, farmers, etc.), with the exception of certain financial sectors. The only requirement to be considered as an individual company is that the founder (the entrepreneur), an adult owning his capital, is the only person managing and making all the decisions that concern the company, even if they can hire up to 10 employees.

The main attractive of an individual company is the ease concerning all the administrative procedures. With regards to the process of company creation, the inscription of the enterprise in their corresponding centre for enterprise formalities (CFE in France) is one of the fastest, and it can be done by filling a P0 form (the equivalent of a M0 form, but for natural instead of legal entities). The reason why the process is so fast is that, because there’s only a person involved in the management of the company, it’s not compulsory to hold any general assembly, nor draft any company statutes, neither deposit any company constitution capital in a bank account (this type of enterprise doesn’t require any). It’s, however, compulsory to have a registered address in the French territory and, like any other company, be registered in the SIREN to obtain a tax identification number and a K extract.

The accountancy books of an individual enterprise aren’t required at the end of every business year due to the fact that the personal patrimony of the director is confused with that of the company, meaning that he’s liable and can be personally prosecuted by creditors in case of debts, except for their main residence, which cannot be claimed. Conversely, this is not the situation for an EIRL, where a sum is deposited to respond for the debts, but the personal patrimony of the entrepreneur is not liable. Individual companies directors must, however, keep a journal, a general ledger, and a stock register to reflect the activity of the enterprise.

Individual companies can adhere to three different tax regimes: Income tax (IR in French), corporate tax (IS) or ‘micro’ tax, designed particularly for individual enterprises and which is meant to be simpler to declare. It’s important to note, however, that only the EIRLs can opt for the corporate tax.

Lastly, in order to liquidate an individual company, it’s only necessary to present a P4 form dully completed to the corresponding CFE. The process of dissolution and liquidation of the company will then be made effective for free. Indeed, the company as it existed cannot be transferred to a possible buyer, although it can be sold. It’s the professional activity that cannot be carried out by someone else, although they can, for instance, buy the name.

Disadvantages of individual companies

In an individual company, as we previously noted, there is no distinction between the personal capital of the director and that of the company, because indeed everything belongs to him. Therefore, the director is personally responsible for the debts. Additionally, if they are married and haven’t established a separation of property up to two years after the marriage at most, the spouses are also liable with their personal patrimony.

In the case of an EIRL, as mentioned above, a sum of money is normally required to back up the company, although theoretically, the initial amount is generally one euro.

Additionally, after a law approved at the beginning of the current year, individual companies have to declare their revenues to the social security. However, the social security charges are directly proportional to the revenues of the company, so the more benefits, the higher are the taxes.

Lastly, it must be noted that there’s no VAT refund for any purchases related to the professional activity of an individual company (such as office material).

The K-bis of a commercial company is its identity card.

It is, in fact, an extract from the commercial register issued by the registry of the Commercial Court. It is considered as the only official document attesting and proving the legal existence of a company.

Although it doesn’t have a fixed duration, in most cases, to be opposable and to be authentic for administrative procedures, the extract must be less than 3 months old.

Content of the document

The extract K or K-bis informs about the activity of the company and gathers all the mentions presented to the Registry of Commerce and Companies (known in France as RCS):

• Name of the corresponding registry;
• Company name, acronym, and logo;
• Identification number (the SIREN number) and NAF code;
• Legal form (ltd, inc...);
• Total amount of the company constitution capital;
• Registered address of the head office and principal establishment, and any secondary establishments in the European Union or the European economic area;
• Duration of the company (up to 99 years);
• Date of constitution;
• Detailed activity;
• Domain name of the company's website;
• Function, surname, given name, date of birth, municipality of birth, nationality and address of the director, shareholders, associates, or any other member involved in the management of the enterprise;
• Reference of the authorizations required for regulated professions.

In addition, it includes all the decisions of the Commercial Court in terms of insolvency procedures: safeguards, recovery, and liquidations.

How to obtain a K-bis extract?

The information given on the K-bis extract is public. Everyone can therefore access it by making a request for K-bis extract from the registry concerned.

The request for a K-bis extract can be made directly online, by mail, or by physically going to the RCS, providing:

• The corporate name,
• The acronym or name of the company,
• The SIREN number.

A K-bis extract costs € 2.96 if it’s requested physically in the registry, € 3.96 by mail and € 3.70 by electronic means.

The K extract for an individual enterprise

The K-bis only concerns legal persons. Individual companies inform about their legal existence by means of a "K". The K includes the same information as the Kbis extract, but it is not an authentic instrument signed by a notary. Any newly created individual company obtains a ‘K’ extract by post.

Conclusion

Any natural entity (micro entrepreneur) or legal entity (Inc., Ltd...) that carries out a professional or commercial activity must register in the RCS after its creation. The lack of registration may be considered a crime of concealed work.

The K-bis extract allows the company to certify its registration in the RCS to any person who requests it.

The K-bis of a commercial company is its identity card.

It is, in fact, an extract from the commercial register issued by the registry of the Commercial Court. It is considered as the only official document attesting and proving the legal existence of a company.

Although it doesn’t have a fixed duration, in most cases, to be opposable and to be authentic for administrative procedures, the extract must be less than 3 months old.

Content of the document

The extract K or K-bis informs about the activity of the company and gathers all the mentions presented to the Registry of Commerce and Companies (known in France as RCS):

• Name of the corresponding registry;
• Company name, acronym, and logo;
• Identification number (the SIREN number) and NAF code;
• Legal form (ltd, inc...);
• Total amount of the company constitution capital;
• Registered address of the head office and principal establishment, and any secondary establishments in the European Union or the European economic area;
• Duration of the company (up to 99 years);
• Date of constitution;
• Detailed activity;
• Domain name of the company's website;
• Function, surname, given name, date of birth, municipality of birth, nationality and address of the director, shareholders, associates, or any other member involved in the management of the enterprise;
• Reference of the authorizations required for regulated professions.

In addition, it includes all the decisions of the Commercial Court in terms of insolvency procedures: safeguards, recovery, and liquidations.

How to obtain a K-bis extract?

The information given on the K-bis extract is public. Everyone can therefore access it by making a request for K-bis extract from the registry concerned.

The request for a K-bis extract can be made directly online, by mail, or by physically going to the RCS, providing:

• The corporate name,
• The acronym or name of the company,
• The SIREN number.

A K-bis extract costs € 2.96 if it’s requested physically in the registry, € 3.96 by mail and € 3.70 by electronic means.

The K extract for an individual enterprise

The K-bis only concerns legal persons. Individual companies inform about their legal existence by means of a "K". The K includes the same information as the Kbis extract, but it is not an authentic instrument signed by a notary. Any newly created individual company obtains a ‘K’ extract by post.

Conclusion

Any natural entity (micro entrepreneur) or legal entity (Inc., Ltd...) that carries out a professional or commercial activity must register in the RCS after its creation. The lack of registration may be considered a crime of concealed work.

The K-bis extract allows the company to certify its registration in the RCS to any person who requests it.

The K-bis of a commercial company is its identity card.

It is, in fact, an extract from the commercial register issued by the registry of the Commercial Court. It is considered as the only official document attesting and proving the legal existence of a company.

Although it doesn’t have a fixed duration, in most cases, to be opposable and to be authentic for administrative procedures, the extract must be less than 3 months old.

Content of the document

The extract K or K-bis informs about the activity of the company and gathers all the mentions presented to the Registry of Commerce and Companies (known in France as RCS):

• Name of the corresponding registry;
• Company name, acronym, and logo;
• Identification number (the SIREN number) and NAF code;
• Legal form (ltd, inc...);
• Total amount of the company constitution capital;
• Registered address of the head office and principal establishment, and any secondary establishments in the European Union or the European economic area;
• Duration of the company (up to 99 years);
• Date of constitution;
• Detailed activity;
• Domain name of the company's website;
• Function, surname, given name, date of birth, municipality of birth, nationality and address of the director, shareholders, associates, or any other member involved in the management of the enterprise;
• Reference of the authorizations required for regulated professions.

In addition, it includes all the decisions of the Commercial Court in terms of insolvency procedures: safeguards, recovery, and liquidations.

How to obtain a K-bis extract?

The information given on the K-bis extract is public. Everyone can therefore access it by making a request for K-bis extract from the registry concerned.

The request for a K-bis extract can be made directly online, by mail, or by physically going to the RCS, providing:

• The corporate name,
• The acronym or name of the company,
• The SIREN number.

A K-bis extract costs € 2.96 if it’s requested physically in the registry, € 3.96 by mail and € 3.70 by electronic means.

The K extract for an individual enterprise

The K-bis only concerns legal persons. Individual companies inform about their legal existence by means of a "K". The K includes the same information as the Kbis extract, but it is not an authentic instrument signed by a notary. Any newly created individual company obtains a ‘K’ extract by post.

Conclusion

Any natural entity (micro entrepreneur) or legal entity (Inc., Ltd...) that carries out a professional or commercial activity must register in the RCS after its creation. The lack of registration may be considered a crime of concealed work.

The K-bis extract allows the company to certify its registration in the RCS to any person who requests it.

In order to be able to be able to exercise its activity, it is necessary for a business centre to hold an “agrément préfectoral”, which is a prefectural police authorisation.

Such approval can be requested from the departmental police service where the head office of the business centre or from the police headquarters if the centre in question has its registered address in Paris. The “agrément préfectoral” must be renewed every 6 years. If the director of the business centre fulfils the honorability terms (i.e. not being in a situation of personal bankruptcy), the approval is generally granted without complications after applying for it to the pertinent prefecture.

The number of the “agrément préfectoral” is important to establish a domiciliation contract between a company and a business centre. Indeed, since 2012, every business centre that offers a domiciliation service must provide a number corresponding to the “agrément préfectoral” so that the domiciliation of the enterprises in the centre is valid. Without this number, any company trying to register their address will be rejected by the Registry of Commerce and Companies (RCS in French).

Documents to provide to request an “agrément préfectoral”

To obtain the “agrément préfectoral”, a dossier including the following information is require:

• A declaration form dully completed. The form can be found online.
• A proof of availability of the premises (cadastral statement, floor plan of the premises or a detailed description with supporting pictures).
• A document certifying that the company owns or leases the premises.
• A certificate of honorability from the director of the centre if he’s the only manager. If there are other members in the direction, shareholders, or associates holding at least 25% of the shares or votes in the company, they will also have to provide a certificate.
• A copy of the ID card or passport of the legal representatives, shareholders and associates.
• A copy of the statutes of company constitution (only in the case of a legal entity).
• The K-bis number of the centre.

Once the application has been validated by the police, a number of “agrément préfectoral” is assigned to the business centre. This number, which is the proof that the company can offer a domiciliation service legally, must appear on every agreement established with companies that wish to use the business centre as their registered address.

Conclusion

It is important to know that offering and exercising a domiciliation service without the “agrément préfectoral” can be sanctioned with a fine of €7,500 or even a jail time for up to six months.

If the business centre obtains the “agrément préfectoral”, the last step to take before carrying out a perfectly legal domiciliation service is to register in the pertinent RCS, like any other type of company in France.

The recovery procedure of a company with difficulties is a business restructuration process known in France as “redressement judiciaire”.

Unlike the procedure of safeguard, the company has effectively ceased its payments, but it still seems possible to retake the company and relaunch its activity. The procedure is indeed very similar to the safeguard one, and it also applies to any type of enterprise.

Who is involved in the procedure?

The people who intervene in a company recovery project is the same as in the case of a safeguard procedure, namely a designated judge, an attorney, and an administrator. However, the director of the enterprise may not intervene in the process.

An attorney appointed by the judge will carry out the process. He’s in charge of watching its evolution and making sure that the company pays its debt in a 10 years maximum period.

Other legal professionals are added to the procedure, especially in case the revenues are too big (at least three million of euros), as well as in case of having more than 20 employees. These professionals are, for example, an auctioneer, or a bailiff. Unlike the safeguard procedure, in the recovery process it is compulsory to appoint them.

With regards to the opening of the process, it can be requested by:

• The debtor (director of the company) himself. He can ask it when the company is no longer able to pay its debts, but bearing in mind that he mustn’t exceed a period of 45 days to request it.
• A creditor who is not getting paid. If a creditor demands a “redressement judiciaire”, a hearing will be held and both parties will be heard. The company will have to explain the reason of the debt, and also provide proofs that it’s solvent if that’s its case. The judge will in fact appoint both parties in a period of 10 days after the request was made.
• A public prosecutor.

Once the request for a recovery procedure has been approved, the tribunal will examine the debts of the company to make sure that there’s a possibility of relaunching the activity. If its future seems insurmountable, a liquidation process for insolvent companies will be open instead.

Particularities of the recovery procedure

In the case of a recovery process, differing from the safeguard, the AGS (insurance for the guarantee of salaries) intervenes to make sure that the employees’ rights are respected.

The company becomes immediately available for transfer to any third party interested in retaking it and relaunching the activity if they can better the offer of the current managers. Additionally, it’s the judge who will determine the salaries of the director and his associates, or anyone involved in the management of the company.

Unlike in the safeguard process, during the “redressement judiciaire” it’s the experts appointed by the judge who will elaborate the inventory of the belongings of the company, not the enterprise itself.

During the recovery procedure, the past debts of the company are also put aside and a “new” accountancy is established to allow the business to function again. These debts will be included afterwards in the recovery plan. However, exceptionally urgent payments will have to be paid immediately.

During the recovery procedure, all the legal ways to individually prosecute the enterprise are blocked, meaning that the creditors cannot demand their benefits.

The phases of the recovery procedure

An enterprise requesting or being demanded a recovery process has to provide a dossier to the registry of the Commercial Court that reflects its exact accountancy situation so that they estimate its chances to survive once the recovery plan is over. If it’s thought to be able to overcome its insolvency situation, then the procedure is opened.

After pronouncing the opening of the process, the attorney verifies the debts and makes a publication in the Bodacc. The creditors can then make their claims in a 10 days period after the publication if they disagree. After this period, the company is put on an observation plan, where the attorney determines the payment deadlines for these debts in a maximum of 10 years.

It’s important to note, however, that the creditors have two choices as of how to claim their debts:

• Either part of the debts are paid immediately or,
• They receive the totality of the due amount in the course of the recovery plan.

As mentioned before, during the observation phase, the company cannot be prosecuted by the creditors, and the interests cannot be increased. The phase lasts for 6 months initially and it’s renewable two times, going for a maximum of 18 months.

The objective of the observation plan is to evaluate the past situation of the enterprise with regards to its debts and the reasons that led to ceasing the payments to the creditors, its current situation and its capability to recover, planning the future of the enterprise so that it doesn’t become insolvent again, and ultimately, remake a whole new treasury of the company.

End of the procedure

The procedure is over once the company has liquidated all of its debts at the end of the 10 years period. If its activity revenues allow it, the debts can be paid earlier.

On the other hand, if the enterprise cannot face the payments, the recovery process will be finished and a liquidation procedure will be opened instead to finish the activity of the company.

The simplified process of liquidation of an insolvent enterprise applies to individual companies without real estate.

There are two types of “liquidation judiciaire simplifiée” (or simplified legal liquidation) in France. The eligible enterprises fall into either category according to their average revenues and the number of employees they have. These two types of simplified liquidation are known as compulsory and facultative.

Compulsory liquidation

When the judge designated for the liquidation process chooses this status for a company that is unable to continue to pay its creditors, the enterprise cannot revoke the decision.

This kind of liquidation is thought to make the process easier and faster for the smallest companies. Nevertheless, it doesn’t apply to every individual company without any real estate. Additionally, they must:

• Have an average yearly revenue equal or under 300,000 €. This average is obtained from the last three business years before the pronunciation of the liquidation.
• For the last six months, not having had more than one employee.

If an individual company that has become insolvent matches these criteria, then the designated judge will automatically decree the compulsory liquidation for the company.

In this case, the process cannot last more than six months from its opening to the end of the process. Exceptionally, as in the facultative liquidation, it can be prolonged for a maximum of three months providing that this increase is motivated.

Facultative liquidation

Unlike the process of compulsory liquidation, in this case the individual company is the one requesting the process of simplified liquidation after having been declared insolvent. Again, if the request is accepted, it cannot be revoked afterwards.

There are a series of characteristics that the enterprise must fulfil to be eligible for a facultative simplified liquidation:

• Its yearly revenues are in between 300,000 € and 750,000 €. These digits are obtained from the average revenues of the three business years prior to the opening of the liquidation.
• In the last six months, the company has had five or less employees.

With regards to this process, its maximum duration cannot exceed one year, with a three months period of extension if there are solid reasons to prolong it.

Characteristics of the “liquidation judiciaire simplifiée”

A company that is involved in a process of simplified legal liquidation, whether it’s compulsory or facultative, will normally have to follow some steps, which are common to both categories as they depend more on the passive and the belongings of the company rather than their classification.

First of all, the debts of the company are examined by the designed judge. Unlike the classic process of “liquidation judiciaire”, this isn’t an exhaustive examination of their totality. Only those debts concerning salaries of the employees and the ones that can be regulated with the available actives of the company according to a rank of privilege of the creditors are taken into account.

Depending on the actives belonging to the company, the judge will appoint a liquidator. However, if necessary, in order to estimate the value of such actives, a notary, auctioneer, bailiff or a commodity sworn broker may also be appointed. Such a second technician, who is rarely appointed, regardless of their participation in the redaction of the inventory or not, will also receive a fee.

Secondly, the actives listed in the inventory are sold. For the first four months, the sales are conducted by means of agreement (“gré à gré” in French) between the seller and the buyers. After said four month period, if any actives remain, a public auction begins.

Should the auction be conducted, the judge cannot decide which actives are included in it in a compulsory simplified liquidation. For the facultative way, the judge will normally provide a list of the actives that can be sold in it.

Lastly, an estimate of the status of the debts that had been verified in the first phase is elaborated by the liquidator. The liquidator is then in charge of the deposit of the verified debts status, together with a distribution plan for each of the verified creditors, in the registry of the Commercial Court which, in turn, will publish the plan in the BODACC.

Nevertheless, in case of impossibility of regulation of the set of debts, the sums are paid to the privileged creditors in priority. For this matter, it’s enough to make a deposit in the registry, which will give a notice by certified letter signed by the liquidator to the creditors. In this case, it won’t be announced in the BODACC.

End of the process

The creditors have one month after the publication of the distribution plan in the BODACC or the reception of the certified letter, depending on their case, to present their claims to the judge if they don’t agree with the decisions made by the liquidator.

The judge will then resolve the claims and accept or decline them in a period of 10 days, after which the distribution plan becomes definitive and no further petitions are allowed. It’s at this point that the liquidator proceeds to the payment of the debts, thus ending the process.

If the maximum duration for each category of simplified legal liquidation is exceeded, the process automatically becomes a classic “liquidation judiciaire” and the steps and consequences are then the same as in such process.

A company that is no longer able to pay its creditors and employees is subject to a legal process of liquidation.

The process is called in France “liquidation judiciaire” and it takes place when the company enters in a state of “cessation des paiements”.

It can affect every type of company or independent worker, as the liquidation of a solvent company. However, there is a simplified process that lasts for a maximum of 1 year for individual enterprises without real estate and a revenue of less than 300,000 €, although in some cases, it can also apply to individual companies with a revenue between 300,000 and  750,000 €.

WHO REQUESTS IT?

The process can be requested either by the company itself, a creditor who has remarked the insufficiency of funds or, in most cases, a designated judge.

If the company requests it, it has to be done no more than 45 days after entering in a state of insolvency. After the director of the company provides all the accounts, proving that the company no longer can continue paying, a designated judge decides if a process of “liquidation judiciaire” can be conducted or not.

Also, a creditor that is in a situation where he is not receiving their payments can request the liquidation of the company as it is possibly a sign of lack of solvency.

A judge can also declare the liquidation process if the insolvency state is remarkable, or he detects that the company is no longer carrying out its economic activity (in which case its considering as abandoning the activity and could have legal consequences), or the director fails to resume or cease the activity after the end of a “mise en sommeil”.

Besides special cases, once the liquidation process for an insolvent company has started, no economic activity is allowed. In any case, for such cases, the maximum authorised duration is only 3 months, renewable one time.

WHO’S INVOLVED?

There are three main roles involved in such liquidation process; namely a designated judge, a liquidator, and, if any, a person to make sure that the rights of the employees are respected (receiving salaries and their corresponding primes, etc.).

The role of the judge is to supervise the whole liquidation process, from its opening to the final resolution, making sure that all the parties act according to the law, as well as designating the liquidator.

The liquidator assumes the management of the company during the whole process. His role, as in the liquidation process of a solvent company, is the most important because:

• He’s in charge of collecting the debts that any third party has contracted with the company before the process was open.
• He has to calculate the debts of the company with its creditors, employees, and the expenses derived from the legal process of liquidation, as the company has to respond for all of those.
• In order to pay the debts, he has to calculate the passive and sell all the actives of the company (real estate, material, etc.) to obtain all the funds available. However, if it’s not enough, he’s entitled to pursue the personal patrimony of the director of the company. It’s actually the last resort, and the director is granted some time to leave its main residence in case of ownership, because it will be used to pay for the debt.

It’s indeed the duty of the director to provide all the accountancy information, as well as all the belongings of the company, to the liquidator so that he can carry out the process. Failing or refusing to do so could derive in a count on fraud.

Should the company have any employee, a person making sure that the employment insurance, compulsory for any enterprise, has to be designed to ensure that they receive all their corresponding salaries and allowances before terminating their contracts. This has to be done 15 days after the breach or, in case that the judge allows to continue with the activity, 15 days after the final date. The payments to the employees are ensured by the “assurance de garantie des salaires” or AGS.

CONSEQUENCES

The enterprise that is in a process of liquidation cannot be prosecuted individually. In other words, all the legal ways to claim a debt from the company are blocked because a legal process is already open and it’s the duty of the liquidator to take care of the payments.

After the process has started, the company stops receiving any interest for its activity. If any interest is to be received, it’s directly invested in the payment of the debts.

For the people to whom the company owes money, the debt has to be claimed within a maximum of two months after the court publishes in the BODACC the opening of the liquidation process and, in case of having its legal domicile out of France, a maximum of four months.

END OF THE PROCEDURE

The process of liquidation can be concluded in three different ways:

• The company has enough money to pay all its debts.
• No more passives can be demanded from the company.
• In case of insufficiency of actives. This is the most common reason to end a “liquidation judiciaire”, and it takes place when the enterprise doesn’t have enough money to pay its debts. The consequences of having insufficient actives are two:

1. On the one hand, the creditors cannot demand additional individual engagements to the company unless it’s involved in a case of fraud.
2. On the other hand, if any personal patrimony or personal sum of money had been declared as security deposit for the enterprise, or if any other person had been named as guarantor, their personal belongings can be legally pursued in order to pay for the debt.

Additionally, it’s important to know that the enterprise can be sold or transferred to another entrepreneur that wants to retake its activity, or in an attempt to keep the employments.

If there’s any possibility to reactivate the activity, or achieving solvency before liquidating the company, a conciliation process can be demanded. These are “redressement” or “sauvegarde d’emploi”, depending on the aim. It’s, however, up to the judge to decide their viability and thus allowing the company to adhere to either one.

Closing a secondary or complementary establishment is a relatively simple process compared to the radiation of a company.

What matters most in this case is indeed that someone will retake the emplacement or the business itself in an attempt to protect the labour policy in the country.

For this reason, if your company has a secondary or complementary establishment that you would like to close, there are some formalities to be done.

WHAT DOCUMENTS DO YOU NEED?

First of all, you will need a M2 or P2 form, depending on whether you’re an individual company or not. These forms are used for any modification in the company.

As in the case of closing the head office, you will need to publish a legal announce in a journal to declare the closure of your secondary establishment. The proof of such publication will be demanded when making the closure effective.

Lastly, you need to have a certification stating the sale of the establishment, in case you were the owner, or the termination of the rental agreement for the premises.

WHO DO YOU NEED TO INFORM?

Once you’ve made the choice to close your secondary establishment, especially if you’re a big enterprise employing at least 1,000 people, or 150 in a secondary establishment, you must hold a general assembly with the economic and social committee (called CSE in France) to state the reasons why you want to close the establishment. The minutes of this assembly are then sent to the “Direccte”, which is the regional direction of enterprises. The city hall of the location of the establishment also have to be aware of the future closing.

In addition, if you’re a big company you must find someone to retake the business in that location. After receiving the proposals from the potential buyer, and whether you decide to accept or refuse them, you have to state the reasons of your decision and provide them to the CSE.

Failing to search a new buyer could derive in issues like having to return social aids received, not being eligible for a PSE (job assurance program), etc.

WHAT ARE THE CHARGES?

The charges depend on the amount of secondary establishments that depend of the same administrative area, as well as the number of associates integrating the company.

For an individual company which owns only the establishment to be closed in the area, the cost is 33.93 € or 50.95 € if it owns several premises.

In case of being a company with more than one associate and a single establishment, the cost is 46.48 € or 65.04 € for the owners of more premises.

To these charges, you will have to add those of the publication of the legal announcement.

The process by which a French company stops its economic activity and ultimately ceases to exist is called “dissolution-liquidation”.

Both terms are not to be confused as the latter is the consequence of the first. Therefore, the process of dissolution is the first step and it means the end of the economic activity but not that of the legal entity, although it announces its future disappearance. Conversely, the process of liquidation takes place when the company proceeds, after stopping its activity, to sell its actives, pay its debts, and redistribute the remaining capital, if any, among the stakeholders or otherwise respond to the debt according to their responsibility in the company. Once the liquidation is finished, the company effectively ceases its existence.

The liquidation process is different from:

• A temporary cease in the activity (known as “mise en sommeil”)
• Closing a secondary establishment

WHO CAN DECIDE TO LIQUIDATE THE COMPANY?

The decision can be made because of different reasons, such as a decrease in the economic activity, a misunderstanding between the members, or because the shareholders no longer wish to continue the activity.

The request to dissolve and ultimately liquidate and radiate an enterprise can be proposed by all the members unanimously, by one of them in case of conflict as long as s/he is not the origin of the conflict, in which case they could face a claim for damages, or a judge in the company cannot face its debts and a recovery in the economic activity doesn’t seem possible.

In case of unanimity between all the members and solvency of the company, the process is known as “liquidation amiable”. However, if it’s requested to a judge by a stakeholder or by the judge himself in case of lacking funds, it is then known as “liquidation judiciaire” because the process is forced by law, and so the phases are different from the “liquidation amiable”.

THE “LIQUIDATION AMIABLE”

As mentioned before, this process is started by the will of the stakeholders or members to stop the company. In other words, it’s the proclamation of its dissolution. After holding the general assembly to declare the decision and the approval by the required majority of members to modify the statutes of the company, it’s then time to designate the liquidator. One of the advantages of this process is that the liquidator can be the director himself, or otherwise a member or a third party, but it’s up to the company to decide.

Once the process of liquidation has been started, there’s a maximum of three years to conclude it.

The steps to declare the liquidation of the company are the following:

The minutes of the general assembly must be registered in the corresponding Corporation Tax Service (“Service des Impôts des Entreprises” in French or “SIE”), depending on the location of the head office. The price of this registration varies depending on the capital of the company:

• € 375 for companies whose capital is below € 225,000
• € 500 for companies whose capital is over € 225,000

After the registration, a legal announcement has to be published in a journal offering such service. To save costs on the publication, the same ad can announce both the intention of dissolution and the opening of the liquidation process.

The following step is to register in the Commercial Court the necessary documents to inform about the dissolution:

• Minutes of the general assembly registered in the tax service;
• Proof of the publication of the legal ad;
• Certificate of clean background of the liquidator;
• Copy of the ID of the liquidator;
• Dully completed ‘M2’ form.

The cost of registering the dissolution is € 205,50.

After declaring the dissolution, the designated liquidator proceeds to terminate the accounting situation of the company by:

• Making an inventory of the patrimony (real estate, stocks…);
• Retrieving the debts (clients’ invoices to be paid);
• Paying the debts;
• Selling the actives, for example, the patrimony declared in the inventory.

Once the debts have been paid off and the company has sold its actives, the liquidator must determine the balance of the company. In case of a surplus or positive balance, the amount is subject to a 2.5 % tax, corresponding to its registration fee. In case of said surplus, the capital is to be divided amongst the stakeholders depending on their initial participation. In case of deficit, however, they will have to respond to the debt according to their responsibility in the capital of the company.

It’s the liquidator’s duty to inform the stakeholders about the progress of the operations on a regular basis, as well as calling them for a general assembly 6 months after his designation. Having carried out all the expected operations, the liquidator, by means of a general assembly, must present the accounts to the stakeholders and, upon agreement, he must then declare the end of the liquidation.

Nevertheless, if there’s no agreement, the liquidator will have to register the accounts in the Commercial Court which, in turn, will make them public, enabling every interested party to make their claims, and only after proceed to the closure of the liquidation. This action entails also the divestment of the liquidator.

After the conclusion of the liquidation, a new legal ad has to be published in a journal to inform about the end of the process and the Commercial Court will also make a mention in the BODACC.

END OF THE PROCESS

The definitive end of the company is known as radiation of the head office. It means that the company is effectively removed from the registry and doesn’t exist anymore; neither its professional activity nor its legal entity. For this matter, a radiation dossier has to be registered in the corresponding Commercial Court and it should contain:

• An act stating the end of the liquidation operations certified by the liquidator.
• A copy of the closing accounts, also certified by the liquidator.
• A ‘M4’ form dully completed and signed by the liquidator.
• A certificate of the publication of a legal ad.

Once the radiation has taken place, the process is concluded and the enterprise is definitively closed.

If you would like to cease the economic activity of your French company temporarily, there’s a procedure known as “mise en sommeil”.

This action consists on pausing your activity with the aim of reactivating it in time. The period can last for a maximum of two years.

Before considering it, you must know that the process is only applicable to the head office. For your secondary establishments, if any, the only possible procedure is their closure.

The process is called “mise en sommeil” if your company is integrated by more than one member (Ltd, Inc...) or “cessation d’activités” for an individual company. Although essentially the same, there are some slight administrative differences.

WHY PAUSE YOUR PROFESSIONAL ACTIVITY?

There may be several reason for which a company decides to take a break in its activity, such as getting involved in a different project, personal or family issues, a decrease in the popularity of the business… Whatever the situation of the company, this decision is generally made when the director doesn’t wish to terminate permanently the activity of the company and wants to take some time to determine the future of the company.

However, it’s indeed important to consider two points:

• A “mise en sommeil” can’t be made in case of a lack of liquidity or even bankruptcy. In that case, the company has to be either sold or terminated. If the process is used in an attempt to hide the lack of funds, the director has to respond for it personally.
• The status can’t last longer than two years (1 year for an individual company, with the possibility to renew it for one more year). If exceeded, the Commercial Court will prodeed to the dissolution of your headquarters after having informed the director by certified mail.

HOW TO REQUEST THE “MISE EN SOMMEIL”

The director himself can choose this status for the company unless otherwise specified in the statutes of the enterprise. However, it's recommended to hold an extraordinary general assembly to agree on the temporary cease of your economic activity. 

The following step is to declare it in the “Centre de formalités des entreprises” or CFE, so that the modification is registered in the Commercial Court. Nevertheless, the petition can be made directly to the Commercial Court.

From an administrative point of view, it’s necessary to present a ‘M2’ form, used for any modification of the company, to declare this pause. Such form must be signed and ideally registered by the director of the company or, by default, by an entitled party. Once it's registered, the Commercial Court will automatically publish the update in the French bulletin for commercial and civil advertisements (known as BODACC). The cost of this procedure is € 190,24 if the company has more than one member or € 104,34 in case of being an individual company.

While it’s not necessary from a legal point of view to publish an ad in a journal of legal announcements, it may be useful to inform your potential costumers about your new status. However, it implies an extra cost.

WHAT ARE YOUR OBLIGATIONS?

While the obligations of a company with the status “mise en sommeil” are less than those of a fully operative one, there are few procedures you will still need to do:

• For the first year of “mise en sommeil”, you must pay the CFE rates.
• You must pay the VAT corresponding to the company. 
• In case of being an individual company, you will need to renew the “mise en sommeil” after the first year if you want to prolong it.
• When declaring your taxes, you must add the mention “néant” (non-being) for your company to indicate that no professional activity is carried out.
• The accounts of your company must be declared and approved every business year without exception.
• The new status appears has to be reflected in your k-bis extract in the form of “not operative since DATE, followed by the number of your company.

The "mise en sommeil" must conclude after a two years period, after which it's necessary to resume your professional activity or liquidate the company.

The statutes are an essential element for the constitution of a company.

They are used to define, among other things, its corporate name (the name of the company), its purpose (its reason to exist), the address of its head office, the amount of capital invested in it, if any, and to mention the persons and institutions that will constitute the company.

The different articles are used to define the rules of operation amongst stakeholders (partners, shareholders...) and they depend first and foremost on the legal form of the company (ltd, real estate company, Inc...).

WHO IS ENTITLED TO WRITE THE STATUTES?

There are three solutions for the creator of a company to draft the relative statutes.

The first one is the redaction of the statutes by the director himself. A director is indeed entitled to write the statutes of his own company. For that matter, he either has the necessary legal knowledge or alternatively, he relies on status models that he can find online. Depending on the complexity of the company, particularly the number of shareholder partners, it is wise to use the services of a professional.

BUT WHOSE?

A lawyer: A lawyer can write the statutes of a company. For companies that require special operations (purchase of shares), the lawyer is particularly relevant. Moreover, he can contribute with his expertise to draft complementary acts to the statutes. For example, a partnership agreement, which governs the relations between the various stakeholders to shareholding. Without this document being published and thus made public, unlike the statutes.

Finally, you can make use of the services of a chartered accountant. For relatively simple ones, the accountant can not only draft the statutes of the most common company type (ltd, single-member ltd, Inc., single-member Inc.…), but also combine this service with a supporting role. It is a solution that represents a good value for money.