Formation of a French Company - a brief overview
French Company Formation - (in French - Constitution d'une société) - There are numerous types of company structure which are provided for by French Law, however today the great majority of trading entities in France have taken the form either of a Société Anonyme (S.A.) or a Société à Responsabilité Limitée (S.A.R.L.). The relatively newly introduced Société par Actions simplifiée (S.A.S.) is finding favour though with a number of foreign, particularly US, corporations which are setting up subsidiaries in France.
Whilst this list may not be held to be exhaustive, the following points might be of particular comparative interest to practitioners used to the sometimes, but not always, different provisions of many Common Law systems.
The formation of companies in France is generally considerably more complicated and time consuming than in many Common Law jurisdictions.
Subject to certain exceptions, the S.A. S.A.S. and the SARL limit the liability of their shareholders to the amount of their share holding.
There is no such thing (currently) as an off the shelf company at French Law and all types of companies require that a minimum fixed amount of share capital be lodged and temporarily frozen prior to formation.
An S.A. has a minimum of 7 shareholders, and three Directors, but the SARL has no Directors, habitually a minimum of 2 shareholders and is run by a Gérant or CEO. The S.A.S. would generally have a minimum of 2 shareholders but is not required necessarily to have a Board of Directors. The SAS is often considered to be the most flexible body in terms of corporate structure by US entities used to dealing with 'S Corporations' .
The Memorandum and Articles of Association (By(e)-laws) are far from standardised, although statute law provides for a number of heads which must obligatorily appear therein.
There are no longer any important constraints on either shareholders, or officers of a company, (be they individuals or corporate bodies ), whose nationality is that of one of the member states of the European Union.
However, both de jure and de facto, there are a number of considerable obstacles which a shareholder or officer from a non E.U. country, such as the USA, will need to overcome.
The foregoing is not intended to be exhaustive and for specific information on forming a French Company, please click here
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