Important Steps to Take When Registering a Company in France
As the third-largest European economy behind Germany and the UK, France is a coveted destination for businesses expanding into Europe. Whether you want to start a presence in a European economy or are simply adding France to the list of markets to tap into, it’s essential to understand the necessary steps to register your company in France.
Choosing The Right Legal Structure for Your Company
Choosing the proper legal structure is the most essential step in your registration, as it may determine almost all the subsequent steps you need to register your business. There are several different legal entities you can establish, from micro-entrepreneurship with earnings caps to larger entities, but the three most common ones are:
Société à Responsabilité Limitée (SARL)
A SARL is a corporate entity with at least two and at most a hundred partners. It doesn’t have any minimum capital requirements. The partners are only liable for financial losses equivalent to their stake in the company. SARL is easy, flexible, and requires at least one manager, which may be one of the partners.
Société Anonyme (SA)
The SA is the French alternative to a Public Limited Company (PLC) in other countries. It needs at least two shareholders or a minimum of seven if you want to list it on the stock market. There is a minimum capital requirement of €37,000. It has more stringent personnel requirements – at least three board members, an auditor, a president, and a CEO, though the same person can hold the last two offices. The financial liability is limited to the financial stake in the company.
Société Par Actions Simplifiée (SAS)
SAS can be considered a simplified version of an SA. It can be formed by just one shareholder, though it does require an auditor if it becomes more significant than a set threshold. It doesn’t have a minimum capital requirement.
Choosing the legal entity that best serves your business interests in France is the first step.
Deciding On a Name
Whether opening a new business or expanding your business to France (and not opening a branch), you need to come up with a unique name. You can check for its availability on the Institut National de la Propriété Industrielle (INPI) website, and if it’s available, you can get a certificate of reservation.
Appoint A Director and Define Business Activities
You need to appoint a director in most legal company structures. It doesn’t have to be a French national. Defining your business activities is essential and may determine how easy or difficult it can be to register your company and get the relevant permissions. For example, a marketing or consulting firm may find it easier to register than a financial or healthcare company that may have stricter compliance requirements.
Arrange Social Capital
Social Capital is the French equivalent of equity that the business possesses. It can be any amount for business structures that do not have a minimum capital requirement, but if you are opening an SA, you must adhere to it. However, you do not need to commit the entire €37,000 sum at once. As for structures with no minimum capital requirements, ensure you have enough social capital to take care of all the business set-up expenses.
From articles of association to SOPs, there are several documents you may require, ideally written by someone with an intimate understanding of both the industry and the French legal system. These documents are a requirement under most legal structures.
Submit Incorporation/Registration Application
Based on which entity to which you are applying, you need to prepare an application and arrange the relevant documentation needed as per the application. These documents are usually submitted online. They may take the form of a dossier to be submitted to the commercial court or an application to the Center of Administrative Procedure.
Once your application is approved, you must obtain a Tax Identification Number. You may also need to announce your company’s establishment in a legal gazette, which will be included in the national commercial (and, if needed) industrial register. If you plan on hiring employees or your business structure requires it, you must get the necessary certifications (health insurance), apply to be included in the family benefits system, and take care of other payroll-related legalities.
Open A Corporate Bank Account
This process may take several weeks, but it’s a crucial part. The corporate/commercial bank account is where you will handle the financial aspects of your business, i.e., receiving and making payments, handling payroll, etc.
When registering a company in France, it’s essential to understand all the necessary regulations to ensure that you are on the right side of legal compliance from the moment you start conducting your business in the country. And it’s not just about regulations. If you are not considered legitimate by elements in the market, you will have difficulty conducting your business activities. So, make sure you understand and fulfill the requirements of the legal structure you have chosen.
The Assistance You Deserve
Registering a company in France can be challenging for new and even established businesses unfamiliar with local laws and corporate practices. But it can become relatively easy to navigate with the right expansion partner, especially if they can offer you other alternatives, like an EOR service such as Engage Anywhere. Regardless of your expansion goals, a global compliance leader like Aadmi can help you every step of the way. From establishing the right business entity to navigating the local corporate culture, Aadmi can offer the assistance you need to meet your business goals in France.