Societe a Responsabilite Limitee (SARL) - Private Limited Company Registration in France

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The French Limited Liability Company

The full form of SARL in France is a Societe a Responsabilite Limitee, which is the translation of Private Limited Company. This structure is suggested for small and medium-sized companies that are incorporated in France, SARL is a limited liability company which is the type of commercial company that permits the partners to limit their liability to the amount of their contributions.

In SARL, there should be at least two partners who can be natural persons or legal entities. The shareholders can provide a minimum share capital in SARL of EUR 1. In shares, the share capital will be distributed between the partners in the amount of their contributions. At least one manager has to manage the SARL, and it must be the natural person associated with it.

Benefits of the French Limited Liability Company

There are many benefits of the SARL in France, some of which are mentioned as follows:

  1. The foreigners can own all the shares which means that foreigners will be permitted to own all of the shares.
  2. There is Limited Liability, which means that the shareholder's liability will be limited to the contributions towards the share capital.
  3. The minimum capital requirement is very low which is only 1 Euro
  4. The shareholder requirement will be only one
  5. There is EU membership as France is a member of the European Union, which allows many opportunities for business with other countries' members.

Characteristics of the French Limited Liability Company

There are some main characteristics of the French Limited Liability Company, which are mentioned as follows:

  1. The SARL in France is a commercial company that can have a minimum of two partners and a maximum of a hundred partners.
  2. The partners of the SAARL in France can be natural persons or legal entities.
  3. There will be no minimum share capital requirements while creating the company.
  4. The SARL in France allows the liability of the partners to be limited to the amount of the contributions. However, the liability of the manager can occur beyond the contributed amount in the event of management error.
  5. The SARL in France can be domiciled on its premises or in the home of its manager.

Requirements for French Limited Liability Company

The best advantage of the French Limited Liability Company is that it can be formed by foreign investors who can profit from the same conditions that are imposed on local business persons. The foreigner will be required to consider the following things which are as follows:

  1. There should be a minimum of 2 partners, and the maximum number of partners can be 100
  2. To run the business, if he or she wants to relocate to France, then a residence permit will be needed
  3. The foreigner should find a suitable address that will be then used as the registered address for the company
  4. The documents set will need to be prepared and filed through the companies Register in France
  5. The company should obtain the tax identification and VAT number, and the bank account should be opened with the local bank.
  6. Certain requirements have to be met related to the licenses that are needed to be obtained by the SARL in France.

Share Capital for French Limited Liability Company

To be a partner of SARL in France, you should contribute to the company's share capital to get the delivery of the shares in return. There is no minimum share capital imposed by the law.

The composition of the share capital is of Cash contribution or the contribution in kind, like a computer or a car. The Cash contribution should be paid as follows:

  • Upon the creation of the company the 20% of contributions
  • After registration of the SARL, the balance within five years

The transfer of ownership of the property made for the benefit of the company is a contribution in Kind. The evaluation by the contribution auditor is important where the following two conditions will be met:

  • The value will be greater than € 30,000 in the contribution in Kind
  • The contribution's total value will represent more than half of the share capital.

For the contribution to the capital of the SARL in France in return, the person will become a partner by receiving a particular number of shares, which will give them the following rights:

  • To actively Participate in the life of the company through the general meetings of the partners
  • Receive the shares in the profit which will be made by the company

Documents needed for French Limited Liability Company

The documents that have to be considered while a Private Limited Liability company registration in France are mentioned as follows:

  1. Identification papers of the company's shareholders, which should be translated and notarized
  2. Details about the managers of the company, like the identification papers and the appointment letters
  3. The notarized memorandum and Articles of Association of the company
  4. The application was issued by the Trade Register, and the notice showed the publication of the choice to open a company in the National Gazette.

Private Limited Liability company registration in France

The SARL in France is the popular legal structure for private Limited Liability company registration. The steps are mentioned as follows:

Step 1- Pick a Company Name

For the Private Limited Liability company registration in France, you have to select a unique name that should not invade any existing trademarks or business names. You have to pick and verify the availability of your decided name by searching it on the INPI database.

Step 2- Draft the Article of Association

For the Private Limited Liability company registration in France, the most important documents are the Article of Association and Memorandum, which will indicate intentions for the setup of a company; also, the founding documents of the company have to be formed in France. There should be full information about the shareholders, the directors, the objective of the company's activity, the legal address, and the business form which you have chosen, which is SARL.

The Articles of Association should be drafted in French and should be certified by the public notary before being filed with the Companies Registrar. 1 EUR and at least two shareholders with no more than 100 shareholders will be sufficient for the opening of an SARL in France.

The Memorandum and Article of Association should include the following items which are mentioned below:

  1. The Company’s legal Form
  2. The number of shareholders
  3. The duration of your company
  4. The Company Name
  5. The registered office
  6. The company objects
  7. The amount of the share capital
  8. Allocation of shares between shareholders
  9. company year-end
  10. Appointment of Managing Directors
  11. The conditions under which the company is to run
  12. Resolutions by the shareholders at General Meetings
  13. Process of holding Meetings and majority needed to pass resolutions

Step 3- Share Capital Deposit

For private Limited Liability company registration in France, you can use a minimum share capital of €1, although it is suggested that you have an appropriate amount that is related to the company's activity. The Share Capital should be deposited in the blocked bank account, and the certificate of the deposit has to be obtained from the bank. This certificate will be needed when registering with the company.

Step 4- Publish Legal Notice

You should publish the legal notice for the company’s formation in the sanctioned legal announcement journal. In this notice, there should be a company name, business purpose, share capital, registered office address, and information on the managing directors for the private limited liability company registration in France.

Step 5- Company registration

For Private Limited Liability company registration in France, you have to submit the following documents which are mentioned as follows:

  1. Complete MO, which will give information about your company and company legal representatives.
  2. Article of association original and signed
  3. Published Legal Notice
  4. Registered office address proof like lease agreement or the utility bill
  5. The declaration of the non-conviction and a copy of the ID are required for every managing director.

Step 6- Certificate of Incorporation

After completing your private Limited Liability company registration in France process you will get the Certificate of Incorporation i.e. Extrait K-bis where this document will serve as the proof of the Company’s registration number registered office address and the managing directors.

Legal Address of SARL Company in France

The most significant requirements which have to be followed before starting the incorporation process of an SARL in France is to find the space for your office or any other facility for your registered address. This is a mandatory need for the companies so that they can be considered as French resident businesses.

No special requirements are there to be fulfilled while choosing your legal address for your Company. However, you should note that there must be a physical location for your business in which the correspondence can be received.

Taxation of the SARL in France

The SARL in France is subjected to the corporate tax regime (IS). In this regime, the managers will be considered separately from the company by the tax administration. Therefore, the company will calculate and announce its net profits as well as pay the sums due to the tax office. The tax on the company profits is (IS)

For all businesses, the standard rate is 25%

15% of the reduced rate applies to the share of profits up to €42,500 when the following conditions are met by the Company:

  • Turnover, which will exclude the tax of less than €10 million
  • There should be at least 75% of the share capital held by natural persons.

In the salaries and the wages category the remuneration of the Manager will be taxed. There is a choice with the Manager between the 10% flat rate reduction for the professional expenses or deducting the actual and correct professional expenses from income.

Transmission of SARL in France

The shares which are transferred to French Limited Liability Company will follow different rules which depend on the type of buyer like a family member, partner, or third party:

If the transfer of the shares is to a family member or an associate then it will be Free. The transferor does not need to get the consent of the other partners for the securities transfer. However, the SARL statutes can impose the approval process that is the way to the agreement of the majority of partners or unanimously.

 The third-party transfer of shares will be subjected to the approval of partners where the agreement of a majority of partners to represent at least half of the shares is necessary. On the other hand, the statues can also provide for the stronger majority.  

The Managers of SARL in France

The SARL in France should have a manager, as the manager will be responsible for representing legally SARL. Several Managers can also be appointed and the manager of the SARL should be a natural person whether he is associated or not to the company.

The methods of operating the Manager position are mostly defined by the partners of the SARL in France, which is particularly so because of the following:

Terms of Remuneration

The manager can get remuneration, which is a fixed or variable amount. There will not be any minimum remuneration, and it may be possible that no remuneration will be provided at all.

Terms of Time mandate

The SARL manager mandates can be for an indefinite or fixed period

Terms of Power

The manager legally represents the company about the third party. Also, concerning the partners, the limitations of the power can be provided, such as an authorized process that can be put in place for significant decisions.

Frequently Asked Questions

In SARL, only companies that are authorized with capital exceeding € 232500 should be audited. also, the audit is not compulsory if

  • The employees are less than 50 in the work area
  • The turnover should not exceed 3 million euros
  • The net assets should not be equal to more than 1.5 million euros

The maximum number of shareholders needed in the SARL in France is 100, which can be incorporated into the Private Limited Liability company registration in France. These individuals are not needed with any special requirements for citizenship or legal entities.

Registration for a private limited liability company in France can take up to six weeks.

In these companies, the structure is Commercial with limited liability both of them have their particularities. The operation of SARL in France is mostly regulated by the law and the SAS operation is more flexible where it will be largely determined by partners.

The EURL is a limited liability company which is known in France as SARL with one associate. You can also call it ‘SARL unipersonnelle’ and together with THE SASU these are the two types of single associate companies in France.

For the private Limited Liability company registration in France, one or more managers are needed. Their residence or nationality is not submitted for any special requirements. The manager's name can be mentioned in the Articles of Association and can be assigned for an unlimited period.

The French Limited Liability Company is SARL, which is a good choice for small and medium-sized businesses because it is easy to incorporate, operate, and manage.

The dissemination platform for all business and company registers is the Infogreffe website.

The SARL in France is managed by one or two directors who have the same powers. The director panel will also be created.

The most popular forms of companies among foreign entrepreneurs are the SARL in France and Anonymous companies, which are SA.

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