Societe Civile Professionnelle (SCP) - Civil Professional Company Registration in France

A civil professional company in France

The Societe Civile Professionnelle (SCP) is the legal form that allows liberal professionals to carry out the activity together. This company is made up of at least two partners who are practising the same regulated liberal professional.

The company of this form is governed by law 66-879 of November 29, 1966, which is supplemented for every liberal profession by the implementation of decrees that take into account the specificities of the activity. The Societe Civile Professionnelle (SCP), or the Civil professional company in France, allows the natural person who is carrying out liberal activity to carry out their activity jointly. This company should be formed by at least two partners and associates of the Societe Civile Professionnelle (SCP) and should essentially exercise the regulated liberal profession.

Characteristics of the Societe Civile Professionnelle (SCP)

The Societe Civile Professionnelle (SCP) should be formed by at least two minimum partners, and the maximum number of partners can vary depending on the professions practised. Partners can't hold shares in several Societe Civile Professionnelle (SCP) and can't carry out the same activity individually.

Also, in a Societe Civile Professionnelle (SCP), all the partners should practice the same profession, and it should regulate the liberal profession. Thus, a Civil professional company in France is the only option for professionals which are Architects, Judicial administrators, Liquidators, Lawyers, Dental surgeons, Justice commissioners, Auditors, Industrial property advice, medical biology analysis directors, Land and agricultural experts, Expert surveyors, Forestry experts, Commercial court clerks, Physiotherapist masseurs, Notaries, Doctors, Veterinarians.

Also, there are no minimum share capital requirements for constituting the Societe Civile Professionnelle (SCP). The partners can make their contributions in cash means an amount in money and in-kind which means goods or industry. It is also possible to provide for the partial release of the share capital upon the incorporation of the company for the contribution in cash and industry. Also, the decrees which are specific to every activity have set particular rules in that area.

To obtain registration it should also be noted that the Societe Civile Professionnelle (SCP) should first obtain approval from the competent authority or the registration with the order that is specific to the profession.

Advantages of Societe Civile Professionnelle (SCP)

If you are interested in Civil Professional Company Registration in France then you should know the advantages of the Societe Civile Professionnelle (SCP) which are mentioned as follows:

Clientele Ownership

One of the main advantages of the Societe Civile Professionnelle (SCP) is that it will own the clientele because it will exercise the profession through its members.

No minimum capital

In the Societe Civile Professionnelle (SCP) there is no requirement of the minimum capital. The share capital can be made up of contributions in Kind which can be the right of presentation to customers, furniture, equipment, right to lease, etc, and in cash. Also, in addition, contributions to the industry are possible and allow the distribution of shares.

Multiplicity of Sites

A Societe Civile Professionnelle (SCP) can have several operating sites that will give more flexibility to the structure.

Legal personality

Societe Civile Professionnelle (SCP) has a legal personality, which allows them to contract with third parties and thus facilitate some formalities.

Members independence

The Societe Civile Professionnelle (SCP) respects the principle of the independence of its members, which is important for many professionals who are liberal.

Transfer of shares

The structure of the Societe Civile Professionnelle (SCP) facilitated the transfer of shares, which can be attractive for many members who are seeking to leave the company or to sell part of their participation.

How does Societe Civile Professionnelle (SCP) works?

As a partner of Societe Civile Professionnelle (SCP), you should make sure that compliance with some specific rules that concerns the management and the decision-making of your company.

1. Managers

In a civil professional company in France, one or more managers can be chosen among the partners. The terms of exercise of their mandate are mentioned in the statute, which has, for example, the duration of their functions.

Also, the actions of managers should remain within the scope of the company’s corporate purpose which is to be undertaken in the corporate interest. In the statutes, the common law requires that the powers of managers be limited to the management acts that are needed in the interest of the company.

2. Decision Making

The collective decisions that are made in the assembly in which at least 3/4 of the partners should be present for the deliberations of the meeting for it to be valid.

The decision-making process is very structured:

Every partner will only have one vote, regardless of number of shares they are holding. Also, the statutes can provide that partners can allocate the number of votes that are proportional to the participation of partners in the share capital.

The methods of voting which are the majority, quorum, etc. will be determined by decrees of every profession.

3. The partner's responsibility

The liability of the partners of a Civil professional company in France is unlimited. The partners will be liable indefinitely for the debts of the company, which will be from their assets. The company will be, therefore, jointly and individually liable for partners' actions.

Therefore, if there is any event of professional misconduct committed by any of the partners, then the victim who suffered damage can against the offending partner start civil liability action against the company.

Tax Regime of Societe Civile Professionnelle (SCP)

The tax regime of the Societe Civile Professionnelle (SCP) is a significant point, and it will differ depending on the partners' and managers' points of view.

1. Partners tax regime

The taxable profit will be determined by following rules that apply to non-commercial profits. For every partner, the profits received will be subject to the income tax. If the Societe Civile Professionnelle (SCP) carries out additional commercial operations:

If these operations are linked directly to the main non-commercial activity, then they will also be taxed as non-commercial profits.

If the main activity is not linked then the Societe Civile Professionnelle (SCP) will be subjected to the corporate tax, unless the commercial revenues will not exceed 10% of the total revenues which excludes taxes of the Societe Civile Professionnelle (SCP).

2. Directors Tax-regime

The manager's tax regime will depend on the tax regime that is chosen for the Societe Civile Professionnelle (SCP):

Company not subject to the IS

The manager’s remuneration will be taxed to the IR with their share of profits that are falling to him in the category of non-commercial profits (BNC).

Company subject to IS

Its remuneration will be subjected to the IR in the category of wages and salaries (TS), while the distributed profits to it are taxed under the IR in the category of the income from the movable capital (RCM)

Social regime of Societe Civile Professionnelle (SCP) manager

The directors of the Societe Civile Professionnelle (SCP) are self-employed workers (TNS) They should therefore have to make contributions even if they do not receive remuneration for their management functions. Subsequently, they will benefit from social protection even if they aren’t paid as managers as long as they exercise the liberal profession within the Societe Civile Professionnelle (SCP).

The basis for the calculation of social security contributions for the Societe Civile Professionnelle (SCP) managers will depend on the company’s tax regime:

• For a Societe Civile Professionnelle (SCP) with IR, we will take into account the share of profits that ensues to the manager to which we add his possible compensation for his functions as the legal representative
• For a Societe Civile Professionnelle (SCP) at the IS, we will consider the dividends he receives, to which we will add possible compensation for his purposes as the legal representative.

Who can form an Societe Civile Professionnelle (SCP)?

The person who is authorized to form a Societe Civile Professionnelle (SCP) is a natural person who exercises a regulated liberal profession. Therefore, this will concern people who, before the creation of the company, regularly exercised the profession and those who will meet the conditions that are needed by laws and regulations. There should be a minimum of two partners, and they should be practising the same profession. Also, it won't be possible to create a multidisciplinary Societe Civile Professionnelle (SCP). For example, it won’t be possible to create a Societe Civile Professionnelle (SCP) with the doctors and nurses, even if their profession is related. In principle, it will also not be possible to already be partners of a Societe Civile Professionnelle (SCP) to create your company or exercise the same profession on an individual basis unless provided in the specific decree to each provision.

Responsibilities of Societe Civile Professionnelle (SCP) members

As with the other legal forms of the company, the Societe Civile Professionnelle (SCP) will give rise to the obligations towards their partners. Therefore, the members of the professional civil society will be subject to responsibilities that are precise to them.

1. Manager

In the event of a desecration of the law, a management error, or non-compliance with the statutes the liability of the manager can be brought into play. The third parties and one or more partners can incur the leader’s civil liability which means he has to pay damages. Criminal liability can also be brought into play where the decision will go against the criminal laws.

2. Partners

The SASU or the single-member simplified joint stock company, and the SARL, or the limited liability company, and most of the companies limit the partner's liability to the contributions they have made, but the Societe Civile Professionnelle (SCP) is an exception to this rule. The partner liability of a Societe Civile Professionnelle (SCP) will be indefinite.

Whether it is within the professional partnership of the doctors or lawyers, the partners will always be severally and jointly responsible for the debts of the structure. Subsequently, their assets will automatically become part of the company assets even on the occasion of a liabilities settlement, which means payment of the debts. Regardless of the value of the contributions, the partners will always participate equally until and unless it is provided otherwise in the statutes.

The operations of SCP transmission

As part of the transfer activities of shares of the Civil professional company in France, several situations may occur which are namely:

The transfer of shares, in addition to the remuneration for industrial contributions from the professional civil society, is where all of the shares can always be transferred. During this process, the payment of the capital gains tax will fall to the transferor. The fee of registration, which is 3%, will be paid to the purchaser.

In the inheritance of shares or donation, the rights related to the donation or the inheritance will be calculated according to the share's value at the time of the transfer.

During the transfer of the bare ownership, the manager of Societe Civile Professionnelle (SCP) will have the right to transfer the bare ownership of its assets. He will be able to however retain the usufruct that is legal enjoyment of the property for survival reasons.

Steps for Civil Professional Company Registration in France

For the civil professional company registration in France, the first thing you have to do is to choose the name of your company, and after that, follow the steps which are mentioned as follows:

Step 1- Draft the Societe Civile Professionnelle (SCP) statutes

For civil professional company registration in France, drafting a statute is an important step. The Civil professional company in France is the type of civil society that is governed by law no. 66-879 of November 29, 1966, and by article 1832 following of civil code. The supervision of the Societe Civile Professionnelle (SCP) may also be supplemented for every liberal profession by the implementation of decrees. This will take into account the specificities of their activity.

The Societe Civile Professionnelle (SCP) statutes should specify the following things:

1. The name of the Societe Civile Professionnelle (SCP)
2. The head office or the administrative address of the Societe Civile Professionnelle (SCP)
3. The social object
4. The lifespan of the Societe Civile Professionnelle (SCP) will be a maximum of 99 years.
5. The partner's identity
6. The contribution in kind and contribution in cash
7. The starting capital of the Societe Civile Professionnelle (SCP)
8. The governance bodies are management, general assembly, etc.
9. For organizing transfers of shares clauses

The statute should have the signatures of all the partners

Step 2- Appointment of managers of the Societe Civile Professionnelle (SCP)

For administering the Societe Civile Professionnelle (SCP) the managers are responsible. They should have the power to sign the most of current acts that will bind the company. In principle, in a Societe Civile Professionnelle (SCP) by default all the partners are managers. The manager is automatically a partner of the company. Therefore, it can be only a natural person.

The address and name of the managers will appear on the Kbis of the company and will be made public. Throughout the company’s life, it will be possible to change the managers of the company.

Step 3- Legal announcement of the creation of Societe Civile Professionnelle (SCP)

For the business creation, it is compulsory to publish the company’s notice of incorporation in any authorized legal notice newspaper which is situated in the department of the headquarters of the company.

Step 4- Registration in commercial register

For the creation of the Societe Civile Professionnelle (SCP) to be finalized, the registration file should be filed with the registry of the commercial court. This file should contain the following:

1. A copy of the Societe Civile Professionnelle (SCP) statutes, which are dated and signed by all the partners
2. A copy of the appointment of the manager’s act
3. Declaration of beneficial owners dated and signed
4. Signed and completed MO form
5. Address proof for the company’s head office
6. Notice of incorporation Certificate of publication of the Societe Civile Professionnelle (SCP) in a legal notice newspaper
7. Partner's identity document copy
8. The managers should provide the sworn declaration of the non-conviction as well as the certificate of the parentage.

When the civil professional company registration in France is registered, the commercial court registry will issue a K-bis extract from the Societe Civile Professionnelle (SCP) as well as a SIREN number attested to the legal existence of the Societe Civile Professionnelle (SCP).

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