Societe en Nom Collectif (SNC) - General Partnership Registration in France

What is Societe en Nom Collectif?

The Societe en Nom Collectif, which is SNC in France, is a very specific commercial company. Also, the SNC is a partnership where the Intuitu personae are too strong, which means that the personality of every partner will play an important role in the constitution, dissolution, and operation of the company. The social form has been generally adopted by partners who already know each other and have a real motive to associate. The general Partnership is the legal form of the partnership, and the SNC in France are created by the partners who have the merchant status.

The SNC in France is the so-called unlimited risk company and the SNC was founded by people who want to operate with a modest–size business.

Characteristics of the SNC in France

The Societe en Nom Collectif is a commercial company that can take out any type of activity, with the exception of certain regulated sectors, such as insurance and savings. The SNC is differentiated by the great freedom that is given to the partners for statutes drafting and for organizing the functions of the company.

The partners of SNC in France should be at least two in number, and all of them should have the status of the merchant. The partners of the SNC in France can be natural persons or legal entities.

In the same general partnership, the two spouses alone or any third party can be partners. A spouse, therefore, has to claim the partner status for half of the shares that are subscribed while common property is used by his or her spouse to contribute to a general partnership.

Also, the partner status claim by the spouse of the nominal partner will be subjected to the unanimous consent of the other partners. Further, the SNC in France does not need to file its corporate accounts with the registry of the commercial court unless all partners are limited-risk companies. The management report should simply be available for anyone who is interested in the head office.

What is the share Capital of SNC in France?

The share capital amount is determined freely by the partners and the share capital can be constituted by a contribution in cash and a contribution in kind be goods, equipment, vehicles, buildings patents, goodwill, etc.

The contribution to the industry will also be authorized but should not enter into the composition of share capital and no legal provision imposed the immediate release of the shares in the SNC. It can be fixed in the statutes where the shares will be released when the need of the company comes.

Every partner of the SNC in France will be liable indefinitely for the company's liabilities, and everyone will be jointly responsible. This means that the creditors can sue every partner or even one of them on their assets to pay the entirety of the debt.

There is only a subsidiary character of this obligation which is to say that the company should be followed for the settlement of the debt before the partners.

Advantages of SNC in France

The General partnership has benefits that can be of particular interest to some types of businesses. Firstly, there is some form of flexibility at the share capital level since it is freely determined to simplify the company's creation. The assets are present in other forms that are rare in companies with numerous partners but the SNC in France allows them. The reduced share capital will also indirectly make it possible for the reduction of the costs generated by the creation of the SNC in France.

Another flexibility is the possibility of setting up the SNC in France by using a simple private deed, without any documents of notarial or lawyers being important. Within the framework of the SNC in France, formalism is, therefore, very relaxed.

The locking of the capital is an important aspect of the SNC in France, which means any transfer of the shares can only be carried out with the common agreement of partners. Therefore, it is very simple to directly control the natural or legal persons who are participating in the capital of the SNC in France. There is the advantage of guaranteeing stability, and also, the unlimited financial liability for the partners can contribute to reassuring the potential investors, who will benefit from financing easily.

Also, the administrative constraints will be reduced in terms of the SNC in France as there is no obligation to have the annual accounts, which allows management not to waste their time to keep the standardized and formalized accounts but also to maintain certain discretion for SNC in France.

The Operations of the SNC in France

The General partnership organization of management is freely organized by the statutes. All partners will have the status of managers but the statutes can provide that management be delegated to one or more partners or to persons who are outside of the company.

The managers will be appointed according to the majority conditions which will set by the statutes. The discharge of the managers will need a common agreement with the other partners. If the managers are dismissed without getting a just cause then they are entitled to claim the damages.

The broadest powers are invested in the manager to act in all circumstances on behalf of the company for example the taking out of the professional insurance, payment of social security contributions, sending meeting notices, etc.

The limitation on the power of the managers can be done by the statutes by providing the conclusion of the particular act, which will need the prior authorization of the partners.

Where there are multiple managers, the statute can determine the power of each manager and, for example, the distribution of responsibility for the administration of a company by specializing the powers between them. However, the managers must establish the company accounts and possibly the management report.

The decisions that will exceed the manager powers that are granted to them will be made unanimously by partners.

However, in the statutes, there is validity provided that some decisions are taken by the majority which they have set. The mentioned majority will vary depending on the seriousness of the decisions which are to be made which can also be calculated either in partners number or in number and capital.

Conditions for creating the SNC in France

For the creation of SNC in France, the first condition concerns the partner's quality. Although they can be legal or natural persons, a partner should be a trader, and as a result, the civil companies and the other categories of professions incompatible with the status of the merchant will not be able to create the SNCs. The minors, liberated or not, and the adults who are under curatorship or supervision will also be ineligible for the status of associate.

For the creation of the company, you will require at least 2 partners' signatures, and there is no minimum amount laid down by the law for the share capital of an SNC in France. It may be freely defined by the shareholders in AOA.

Documents needed for the SNC in France

The constitutional documents which are needed for the SNC in France are as follows:

1. Notarised or private deed
2. Publication of extracts in the official journal (Memorial C)
3. Company Name
4. Mandatory company name
5. The personal commitment of partners who are demonstrating to third parties
6. One or more partner name indication
7. The company name should be changed if one of the partners leaves the company

Steps for (SNC) General Partnership Registration in France

If you want to do General Partnership registration in France, then you need to follow the steps mentioned below:

Step 1- Draft the Statutes of Societe en Nom Collectif

For the General partnership Registration in France, you have to draft the statute, which will require the following information mentioned as follows:

1. The legal form of the SNC
2. Company's duration of life
3. Social purpose
4. Address of head office
5. Company’s Name
6. Amount of share capital
7. Partners contribution
8. Rules regarding the distribution of profits

Step 2- SNC deposit of the share capital

The SNC should constitute the minimum capital of €1; also, partners can freely set the share capital in the statutes. The share capital can be fixed or variable.

Through the Contributions of the partners, the capital is made up that can be contributions in cash and contributions in Kind the contribution to the industry is possible but you shouldn’t contribute to capital. In the blocked account with a notary or in the bank, this capital will be deposited.

Upon the company's operative registration, it will be released upon the presentation of the Kbis extract.

Step 3- Publication of legal announcement of the creation of SNC in France

Formation of the SNC in France needs a legal announcement, which is done with the intent to warn the third parties of the creation of the Societe en Nom Collectif.

It should contain certain information, such as the name of the company, its purpose, address, etc. In the department's legal notice newspaper (JAL), where the company's head office is situated, the announcement will be published for general partnership registration in France.

Step 4- Submitting the SNC registration file

For the General Partnership registration in France, the last step is creating a file with the INPI one-stop shop where you can register directly your SNC online on this site. To do this you will have to click on “Create Company” and then on “Legal Entity” After that select the legal form “SNC”.

You will then get access to the MO company creation form, which should be completed. Then, all you have to do is complete your file with the required documents, which are as follows:

1. The statues
2. Incorporation legal announcement copy
3. Certificate of capital deposit
4. Domiciliation proof of the company
5. The identity document of the manager, as well as the sworn declaration of non-conviction and parentage
6. Court fee payment check
7. After that, you will get the Kbis extract attesting to the creation of SNC in France.

The Taxation of the SNC in France

The Societe en Nom Collectif is a fiscally transparent company in principle, which means that every partner will be taxed in their name on the income tax (IR) on the profits formed by the company. To do that, you will have to declare the profits share that has been recovered in your tax return. For that, it may be indicated either in the category of Non-commercial profits (BNC) or industrial and Commercial profits (BIC), which will also depend on the activities of the company. This is how the Societe en Nom Collectif is considered semi-transparent from a tax perspective.

The SNC in France can also opt for corporate tax (IS), although this option will be irrevocable after 5 years. In this, the Societe en Nom Collectif will be subject to IS under the same conditions as the SARL, which is 15% up to 38,120 euros of the profits and then beyond the threshold of 31%.

In certain cases, the intervention by appointing an auditor is necessary. In fact, at the end of the financial year, the company exceeds two of these three thresholds, which are:

• In turnover 8 million with excluded taxes
• In the balance sheet, a total of 4 million euros
• 50 employees

The Social Regime of SNC in France

The SNC in France associated managers are affiliated with the social security for the self-employed which are self-employed workers. Therefore, they can’t claim benefits of unemployment and won’t receive any paid leave or compensation for notice.

The partners of the SNC in France are traders. He will then be considered as the self-employed and should be affiliated with coverage for the self-employed.

The non-associated manager falls under the social regime for the assimilated employees. They will be attached to the general society's security system and will benefit from social coverage similar to that of the employee.

Get SNC Registration in France with Enterslice

We at Enterslice will provide you with personalized assistance for your registration in France as a general partnership. At Enterslice, you will get assistance in every step of the process as per your business's requirements. With years of experience, we help through the whole process for SNC in France.

Our business set-up services include advisory services related to the Societe en Nom Collectif. We will assist you in the registration process and opening a bank account for your business with post-registration compliance. Our experts form a strategic plan for the establishment and operation of the business, which will depend on your needs, formulate the budget, and develop the cash flows. At Enterslice, our legal experts will provide you with legal advice on business operations, IP protections, finances, and more. We will help you draft the necessary legal papers for SNC in France and will review and compile the required paperwork for General partnership registration in France.

Our expert team will provide you with bookkeeping services while assuring proper maintenance of the variorum accounting records also our tax experts will assist you in efficiently managing your tax obligations and identifying opportunities for lowering tax expenses. To experience a quick and hassle-free general partnership registration in France, kindly connect with our experts at Enterslice and get personalized assistance and guidance.