What to Know Before Creating a Company in France

What to Know Before Creating a Company in France

Should you consider beginning a business in France, here is a tip on the best way to begin and take it to the following level. Notwithstanding, a couple of things you should think about the status of the economy of France and its business condition; a short business history of France would progress nicely. France is probably the biggest nation in Europe and the European Union. It has been the focal point of convergence in Europe.

Its history has made it a leader in the region in terms of business and commerce. Due to the long historical activities, France has remained to be one of the foreign investment attractions in various sectors of business activities. The capital city of France is Paris which has been central in business development due to its dynamic cultural heritage and center for business.

France has several business opportunities for entrepreneurs and investors. For both foreigners and locals, starting a business or a company has never been a challenge since it is made simple and easy. The laws are flexible and friendly; the lawyers are more than ready to help you through the process of starting a business in the region.  Starting a business in France is one of the best decisions you can make due to the business-friendly environment. The business environment has been improving making it advantageous based on the fact that France one of the best and most powerful destinations to start a venture. Below is a detailed process of starting and registering a company in France.

Sole Proprietorship Business Registration in France

Just like any other country in the world, France has got laws that govern the process of registering companies in its territories. However, the process will depend on the type of business you wish to engage in. The legal formalities of starting a company or a business in France are not lengthy and tedious as you may think. There are a few qualifications that you need to meet. The most crucial of the requirement is the documentation.

You will need personal identification documents like an Identity card issued by a government locally or internationally for non-nationals. For foreigners in France, they should first obtain a trading license to incorporate any type of business in the region.  As you will witness, the formalities for a sole proprietorship are not lengthy, as compared to a company. There are different types of business entities that can be registered in France, concerning the type of companies; the following forms of business and company units are allowed as per the Commercial Law of France.

  • Partnership type of business where it comprises of two members coming together to start a business
  • The public limited company which is the most preferred by foreigners
  • A Public Limited Liability Company also known as Joint Stock Company
  • Single Shareholder Company characterized by a single shareholder
  • Private Limited Liability Company normally a good take for the independent and self-employed experts
  • Sole-proprietorship which is a business owned and operated by one person

Formation of a Limited Liability Company (SARL)

A Limited liability company in France is also known as SARL, Foreign investors can opt for several structures of companies available in France; the most common formation of companies is SARL.

What is SARL?

French SARL is an abbreviation of Société à Responsabilité Limitée which means in English, Limited Liability Company. This formation is recommended for small to medium-sized firms and business entities in the region. Not to mention it is relatively easy to incorporate compare to the other legal forms.

French SARL Requirements

Before looking at the requirements to successfully qualify to form a company in France. The most important thing to note is that the regulations governing company formation in France apply uniformly to both the locals and foreign investors. One of the most important fulfillments is having a registered office space for the Company. This will be used to verify the physical address of the company. As for the foreigners wishing to set up a limited liability company in France, you will need the following;

  • As a foreigner, you will need a residence permit to run a business in France
  • Personal information of all the shareholders i.e. their full names and addresses
  • Information regarding the directors where at least one director appointed by the shareholders
  • A foreigner will need to secure an address to be used as a registered address for the company.
  • A few documentation including evidence of the Company’s Bank Accounts with the local banks in France to be issued with Taxation compliance documents leading to the issuance of a VAT number.
  • A license also has to be issued to the company with the local authorities for it to be fully operational as well as be included in the list of companies in France in the registrar of Companies.

The owners should present to the registrar of companies in France copies of both the Articles of association and the memorandum. This will help show proof of compliance of the new company and also for the France government to understand the motive and the intent of the company.

Several legal firms in France can help both local and foreign investors in designing and coming up with the documents needed for incorporating an entity. As for the address of the company, there is no stringent procedure while choosing the address. So long us the procedure fulfills the need for a physical location and where correspondence can be received and location for identification.

Capital Share Qualification

The Commercial Law there in France demands that the following has to be applicable by businesses in the region in terms of capital formation.

  • For the sole proprietorship, there is no limit of capital contribution so far
  • For a Public Limited Liability Company, the shareholders have to meet a share capital of around 40,000 Euros not ales the article in the companies act of France is amended
  • For the rest of the types of Companies formations, there are no maximum or minimum share capital requirements

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