Company formation process in France

Company formation process in France

France, in Western Europe, encompasses medieval cities, alpine villages and Mediterranean beaches. Paris, its capital, is famed for its fashion houses, classical art museums including the Louvre and monuments like the Eiffel Tower. The country is also renowned for its wines and sophisticated cuisine. Lascaux’s ancient cave drawings, Lyon’s Roman theatre and the vast Palace of Versailles attest to its rich history.

Capital: Paris

Population: 67842591 million (2022) Insee




Types of company that can be formed in France:


  • SARL

  • EURL


  • SA

  • SAS

  • SNC

  • SASU

  • SCP

The limited liability company in France SARL (société à responsabilité limitée) 

The LLC, the type of company most commonly used in the context of business creation in France, 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.



  • The minimum initial capital required is relatively low (at least CHF 20,000).

  • The splitting of the profits could tip the point of progressive taxation into a higher tax bracket.

  • Profits made from shares are not taxable.

  • A SARL can be transformed into a limited company without liquidation. 


  • Double taxation on the SARL’s yield and on its capital as well as on the partner’s income and assets.

  • Protocols, shareholder meetings, tax forms, etc. are costlier.


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.



  • No minimum capital

  • Liability of the partner limited to the amount of his contributions

  • Possibility of choosing between income tax and corporation tax when the sole shareholder is a natural person


  • Drafting of statutes

  • Obligation to follow the operation provided for by the legal framework

  • Difficult transformation of the company, in particular into a SARL



The private limited liability company (SELARL)

A special form of SARL, the SELARL, was created for self-employed professionals (lawyers, physicians, etc.). 



  • The liability of the partners is limited to their capital contribution.

  •  It should be mentioned that any remuneration of a manager is deductible from taxable income.

  •  It is possible for the partners not to pay themselves dividends at the end of the year.



  • Binding in its incorporation formalities.

  • Its accounting obligations are also a little heavier, with accrual accounting replacing the cash accounting generally kept by an individual professional.


The public limited company (SA)

A minimum of seven shareholders is required in order to set up a French SA. The founders can either be individuals or legal entities. 



  • The shareholders are liable for the debts of the company only up to the amount of their participation in the capital.

  • When the company is incorporated, the capital must be half paid up. The rest can be paid within 5 years.

  • SA shares are freely transferred. The capital can also be increased according to the needs of the company.

  • It is characterized by contractual flexibility.

  • It is considered by investors as a guarantee of security.




  • The SA is reserved for large projects that require significant capital

  • The constitution of this company requires at least the meeting of 7 shareholders.

  • It has a rather heavy structure.

  • The SA must appoint an auditor.


The simplified joint stock company (SAS)

This is a similar company to the joint-stock corporation, but it is more flexible, and it requires only two partners for company formation in France. A chairman or president must be appointed by the shareholders.



  • The Company may be incorporated by one or more natural and/or legal persons,

  • The SAS shareholders can pay their contributions within two years.

  • It has a very wide regulatory flexibility. 

  • It has as its maximum body the general assembly of shareholders or the sole shareholder.



  • The share capital of a SAS must be paid up by no less than 50% on its incorporation

  • A SAS can issue bonds at any time and without any condition. A commissioner for the verification of its assets and liabilities must however be appointed if the company does not yet have two balance sheets approved by the shareholders.



Commercial partnership (société en nom collectif - SNC)

At least two partners are necessary for company formation as far as a partnership is regarded. Partners are responsible for the obligations and debts of the partnership to the extent of their personal assets. No minimum capital is required for setting up a commercial partnership in France. Commercial activities of the partners must be performed under the same business name.



  • No initial capital required

  • The shareholders (at least two) can choose to manage the company independently

  • Flexibility in drafting the social contract

  • Possibility to take advantage of the simplified accounting regime




  • However, opening a Snc has some costs because the company must be registered with the business register

  • Subsidiary liability of members

  • Unlimited liability

  • Obligation to use the ordinary accounting regime exceeded a certain threshold



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.



  • Simplification of formalism.

  • The liability of the sole partner being limited to the contributions.

  • Evolutionary structure facilitating the partnership.

  • Only one-person structure where the leader is affiliated to the general social regime.

  • Credibility for potential partners (bankers, customers, suppliers).



  • Charges and procedures when creating the company.


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.



  • 2 partners at least.

  • No minimum share capital is required.

  • The conditions for releasing the share capital are specific to each profession.



  • They are indefinitely liable for company debts to third parties.

  • Each partner is also liable on all of his personal assets for the professional acts he performs

  • When the company is not subject to corporate tax, the remuneration of the manager, if he receives one, is not deductible from the taxable profit.