Societe en Commandite Simple (SCS) - Limited Partnership Registration in France

SCS in France

The SCS in France has a legal personality, which means that it has a truly autonomous legal existence that is different from that of the entrepreneurs and the partners. The Societe en commandite simple is a commercial company whose operations will be governed by commercial code. Therefore, it has a real legal existence that is distinct from the person of the partners.

Therefore, there is a relatively little used form of the company, the SCS in France is perfectly suited for the situation in which there is the creation of the company which has made it complicated with the lack of necessary funds.

The main characteristic of the SCS in France lies in the hybrid system by differences between the two types of partners where the SCS allows the separation between the management of the company and the holding of the share capital.

Characteristics of the SCS in France

The Societe en Commandite Simple is a commercial company that can be differentiated by its mode of operation. The SCS in France has two types of associates, which are as follows:

General Partners

These are the active partners who can manage the company and also, they have the status of merchants the active partners will be jointly held liable for the company's debts.

The following mentioned cannot be active partners:

• Minors cannot be active partners, even those who can vote
• Adults who are protected like the adults under guardianship or curatorship, the person who has been sentenced for personal bankruptcy by the court, or someone who has been prohibited from directing, controlling, or managing a privately- held commercial undertaking or company.
• People who hold mandates that are unsuited to the position of the trader, such as civil servants, lawyers, etc.

Limited Partners

These are the passive partners who can finance the company and monitor its management, as well as the investors. The limited partners can participate in the internal life of the company through general meetings and the supervisory board. Also, they are forbidden from prying on the external management of the company. For example, the Limited partners cannot sign the contract with the supplier or approach the banker to obtain the loan.

The SCS in France should bring together at least two partners which will include one general partner and one limited partner. The partners were both general partners and the limited partners would be the natural persons or the legal entities.

The SCS in France has the authority to carry out any type of activity, where the exception is of certain regulated sectors which are tobacco sales, insurance, etc.

Conditions for the creation of SCS in France

For the creation of an SCS in France, the conditions that should be respected will not differ from those that are needed to create the company.

There should be at least two partners which is to say a general and limited partner and there is no minimum share capital needed the capital contribution can be in the form of Contribution in Kind, in cash, or industry. However, the general partners should have the status of the merchant.

Consequently, only the natural persons or the companies which hold the status can become the general partners. For example, the civil company will not have the status of becoming a merchant and thus cannot associate themselves with the limited partnership. Also, the lawyer or the accountant will not become a partner of SCS in France.

Advantages of the SCS in France

If you are planning for Limited Partnership Registration in France, then you should know the advantages of forming the Societe en Commandite Simple, which is as follows:

1. If it's a legal entity, the unlimited liability that is incumbent on the partners will be reduced
2. It is possible to bring together partners with divergent interests through this legal form
3. In the Societe en Commandite Simple, the identity of the limited partners will not be revealed to third parties.
4. In Société en Commandite Simple there is no minimum capital needed which allows the person to start their business by using their partner's capital.

The Social capital of the SCS in France

The share capital amount in Societe en Commandite Simple can be freely determined by the partners, and it can also be a minimum of €1. In Societe en Commandite Simple, the share capital can be constituted by contributions in Kind, which are goods, vehicles, buildings, patents, etc, and contributions in cash. In the SCS in France, there is no legal provision that imposes the immediate release of the shares. In the statutes, it can be agreed that the shares can be released as needed by the company.

The financial responsibility of the partners will depend on their status, which is:

General Partners

The liability of the general partners is indefinite and joint, which means the creditors of the SCS in France can sue every general partner or just one of them for personal assets for the payment of the whole debt.

Limited Partners

In the Societe en Commandite Simple the liability of the Limited partners will be limited to the amount of the capital contributed by them; the limited partners in the SCS in France cannot be litigated for their assets.

What are the responsibilities of the partners of SCS in France?

The responsibilities of the partners can vary depending on what type of partner you are, whether a Limited partner or a general partner:

General Partners

In the framework of the Societe en Commandite Simple, the general partners have an important role to play in the management and operations of the company, as mentioned below.

Business Management

The general partners will be held responsible for the daily management of the business. They have to form the operational decisions, make business strategies, and administer company activities. They should hold two types of meetings: ordinary and extraordinary.

Unlimited Liability

The general partners are held personally responsible for the business debts and obligations from their assets. The liability will not be limited to the amount of the contribution done to the company.

They will be held liable if there are any errors committed by them in the exercise of functions committed towards the company and third parties. They can incur civil or criminal liability.

Profit sharing

The general partners will be entitled to get a share in the company’s profit, following the terms of the partnership agreement.

Limited Partners

Within the Societe en Commandite Simple, the limited partners will occupy distinct and particular positions as they are the providers of the funds; they can not perform any act of the management, not even under power of attorney, i.e. article 34 of the Code of Commerce.

If Limited partners do not follow the rules, they can be exposed to progressive penalties, i.e. Article 35 of the Code de Commerce:

• The limited partners can be jointly and individually liable with the active partners for their assets and for the undertakings and debts of the company which have resulted from the prohibited acts
• In the seriousness of the committed acts, the joint and several liability can extend to all undertakings of the company

Financial contribution

In the form of capital funds are provided by the limited partners of the business. The main role of the Limited partners is to invest in the business and share the risk and awards that are linked with this activity.

Limited Liability

The limited partners have limited liability. The liability of the limited partners is only the amount of their contribution made to the company, and they won't be personally responsible for the company's debts.

Management non- involvement

The limited partners mostly don’t have any management powers in the company. Limited partners don’t participate in the operational or strategic decisions and also don’t participate in the daily management of the company.

How does SCS in France work?

If you want to do Limited Partnership Registration in France, then you need to understand how the Societe en Commandite Simple works, which is mentioned as follows:

Management of company

The general partners are held responsible for the management of the business. They will make the operational decisions, develop the business strategies, and supervise the activities of the company.

Constitution

The company will be constituted by at least one of the general partners, the manager who will be responsible for debts, and limited partners, one or more; the investors will not have any management powers and have limited liability.

Profit sharing of the company

The business profits are shared between all the partners, following the terms of the contract of the partnership. The general partners will be entitled to larger shares of the profits due to their involvement in running the business.

Lifespan of the Company

The lifespan of the Societe en Commandite Simple can be determined in the contract or be indefinite. If there is the event of the death or withdrawal of the general partner, the partnership can continue with the remaining partners until the contract provides something else.

Legal and Tax obligations of the SCS in France

The legal and tax obligations of the Societe en Commandite Simple are mentioned as follows:

Company registration

The SCS in France should be registered with the Trade and Companies Register (RCS) as for any commercial company to obtain legal presence and to be able to carry out its activity, the regulations will be carried out at INPI's one-stop shop.

Accountability

According to the current French standards, the company should keep its regular accounts. This will involve keeping the accounting books, producing the annual accounts, which include a balance sheet and the income statement, and establishing additional documents like the management report.

Tax returns

The Societe en Commandite Simple is subject to corporate tax (IS) or income tax (IR), which will depend on the tax option chosen. It should produce the declaration of results annually and the payment of the taxes within the legal deadlines.

In addition, it should make the VAT declarations if it will carry out the taxable transactions.

Social contributions

If the employees are employed by the company, then it should pay obligatory social security contributions to Urssaf for its employees. The general partners who will carry out the activity within the company will also be subject to the social security regime for self-employed workers (TNS) and should pay their corresponding social security contributions.

Compliance with legal standards

The Societe en Commandite Simple should fulfil all the laws and regulations in force in France, in particular concerning labor law, commercial laws, company laws, and protection of personal data, etc.

Transmission of the shares in SCS

The transfer of shares between the general partners and the limited partners follows different regimes.

The general partners can transfer part of their shares to the limited partner or to any third party that is outside the company. The consent of all the general partners will be required, and the majority in the number and capital of the limited partners.

The transfer of shares will give growth to the payment of the registration fee to the tax supervision.

In principle, there is the case that general partners' transfer of shares will need the consent of all the partners, but the statute can all provide for the two relaxations, which are:

• If the limited partner's shares can be freely transferable between the partners
• If the limited partner's shares can be transferred to the third parties that are outside the company with all the general partners' consent and the majority in number and limited partner's capital.

Step for the Limited Partnership Registration in France

For the Limited Partnership Registration in France, you will require the completion of particular formalities, which are mentioned in a detailed form that is as follows:

Step 1- Social capital of the SCS

Firstly, it is important to make the various contributions required to constitute the social capital of the SCS in France. Although there is no minimum capital, it is suggested to make the reasonable sum, which is sufficient for meeting the development needs of your company. For the establishment, investors and banks are more inclined to grant finance to companies with share capital.

Therefore, the limited partners make contributions to the share capital of the SCS in France. The contributions can be in kind or in cash.

Step 2- Draft the Company Statute

This step is very crucial at the time for the Limited Partnership Registration in France as the statute will organize its social life and function in writing. For the formation of the statutes, the information which is required is mentioned as follows:

1. Social form
2. Number of partners
3. Company’s lifespan
4. Registered address
5. Social object
6. Company name
7. Amount of share capital and contribution of every partner
8. Appointment of the manager, who is a general partner
9. Share distribution between partners
10. Decisions are required for holding a general meeting
11. Majorities needed for decision-making

Step 3- Legal notice publication

For the Limited Partnership Registration in France, once the statute of the SCS in France has been drawn up and the share capital is constituted, it is important to inform the third parties about the creation of the new company. This obligation needs to complete the two advertising formalities, which are:

• Notice of incorporation publication in the legal notice newspaper
• Notice publication in the official bulletin of the civil and commercial announcements (BODACC)

Step 4- Submitting the SCS registration file

After all the steps are done, you have to register the company; the file should be submitted to the competent CFE. For this, you should complete the online form and attach the requested documents, which are:

1. Statues certified copy
2. Beneficial owners list
3. Identity documentation of the manager copy
4. Non-conviction of the manager’s certificate
5. Certificate of share capital deposit
6. Publication certificate in the legal notices newspaper

The application fees should also be paid online. After that, the Kbis extract of the Limited Partnership Registration in France will be sent to you.

Start your Limited Partnership Registration in France with Enterslice

We at Enterslice offer you comprehensive assistance for Limited Partnership Registration in France, ensuring you seamless compliance with legal requirements and efficient establishment of the business entities. Our team will guide you through the business registration process and in opening a bank account for your business with post-registration compliance.

At Enterslice, our legal experts will provide you with legal advice on business operations, finances, IP protection, and more. We will help you draft the necessary legal papers for your business and also review the necessary paperwork. Our experts will form a strategic plan for the establishment and operation of the business, which will depend on your business needs. Our consultants will help you formulate the budget and make a cash flow for your business.

With our expert-tailored solutions start your business growth. Trust Enterslice for reliable support throughout the process of the Limited Partnership Registration in France and beyond, contact us today and start your journey of establishing a successful business in France.