General note on certain aspects of the formation of a French Société à Responsabilité Limitée (limited liability corporation)
You may choose any name which is not already registered as a company or business in France or alternatively which is not protected under the relevant French intellectual property provisions.
It is suggested that names which are compatible with French usage or pronunciation should be generally adopted.
It is not necessary that the shareholders be French, or reside in France.
For each shareholder, the following information will need to be provided:
body corporate: full registered name, trading name, full address of registered office, official company registration number, full name and title of legal representative (ie the officer empowered to commit the entity) of the company.
individual: full last name (or surname), full first names, home address, profession, date and place of birth, nationality, marital status, if married to whom, where and when.
Fixed Share Capital
Although the share capital of a SARL may now be very low indeed (1 Euro), it would often be advisable (not least for reasons of appearance in the business community) that a minimum share capital e.g. 8 000 Euros should be adopted giving 500 shares at 16 Euros each or indeed 800 shares at 10 Euros.
The amount chosen must be frozen on a bank account or with a French Notary during the period of the formation of the company.
The sum in question becomes available to the new company once the formation is completed and the company registration certificate (in French “extrait k-bis”) is issued.
A company in France must have its own registered office and post office box numbers are not permitted to be used for this end.
A formal written agreement by the owner of real property authorising the specific use of his or her address for the registered office of the company to be formed must be supplied to the French company registrar.
Should you wish to use an accommodation address then such are easily available in France and the cost would probably be between 75 Euros and 100 Euros per month, sometimes with an initial payment for the first year.
An SARL does not have “Directors” in the English law sense but instead usually a sole CEO who is responsible directly to the shareholders via the Annual General Meeting.
The legal representative and Chief Executive Officer of such a French company is called a "Gérant" in French and must be of European Union member state nationality, but it is not necessary that he or she reside on French territory.
For the Gérant it will be necessary to provide the same information as for an individual shareholder and a photocopy of passport or national identity card will be needed.
The Gérant must also sign an affidavit in which he/she confirms that they have no criminal convictions which would prevent them from managing a company.
PS – you need to be careful about terminology in French, and particularly words which seem to be very close to each other, for example, “Directeur” in French generally means “Manager” and not “Director” in English; whereas “Director” in English might usually be translated as an “Adminstrateur” in French in a legal context.
Financial Year End
In France you may chose the date of the end of the financial year of the company, although the majority of companies generally use the calendar year (viz. 1 January to 31 December).
You may therefore freely indicate which month and date you would prefer to close the accounting year.
Open / Closed Company
An SARL usually adopts a “closed” structure, meaning that share transfers may only be carried out between existing shareholders or with the unanimous permission thereof.
Thus, in the event of the transfer of shares to a third party this may only be done with the agreement of the other shareholder(s).
How long does it take to form a company?
It is possible to form an SARL in 3 to 4 weeks from the date upon which all necessary information and documents have been received.
Should it be necessary to proceed with the formation in a much shorter period then this is possible, but it is considerably more expensive than the standard formation.
The overall cost for the formation of an SARL is often considerably higher than in common-law jurisdictions, not least because the articles of association or the bye-laws are not standardised in France.
These bye-laws or articles (“statuts sociaux” in French) often need to be drafted individually for each type of activity and much will depend on the different documents required by the local Commercial Court Registry (these requirements may differ within France according to each individual 'Greffe' or regional Commercial Court office).
Typical costs and fees, including commercial court registry disbursements, encountered have been between 2 500 Euros and 4 800 Euros (not including VAT if chargeable).
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