Post-Registration Companies Compliances in France- An Overview After the successful registration of a company in France, every company has to furnish annual returns and make disclosures to the Registry of Commerce and Companies (RCS). These annual returns and disclosures made by these companies have to be signed by a competent body within the company and thereafter submitted to the Registry of Commerce within the prescribed time. Failure to furnish the required returns and disclosures may result in the imposition of penalties. The annual returns and disclosures to be furnished by a company include the following: Change in the name of the company Change in the official registered address of the company Declarations of the Ultimate beneficial owner of the company. The annual returns are required to be filed along with the applicable fee to the Registry of Commerce and Companies. In case some changes take place within the company, such as the appointment of a new director, a statutory auditor or transfer of shares of the company, or holding official meetings; the same must be notified to the Registrar expeditiously. Enterslice advises and assists in the preparation of a compliance calendar that records all the statutory filings and disclosures to be made by your French company to make sure that your French company always stays on the right side of the law. Major Post-Registration Compliances in France In order to avoid any illegalities by not making proper disclosures to the concerned government agency, every French company needs to fulfil certain post-registration compliances in France. Depending on the type, turnover, and other factors, every company needs to file its returns annually or when there is a change in circumstances. The major compliances that every French company needs to follow are as follows: Submission of the Annual Accounts Every French company is required to send its annual accounts to the Chamber of Commerce within a period of 1 month for their approval (within 2 months of online filing), latest by July 31 if the company closes its fiscal year on 31st December of the previous year. The purpose of this obligation is to allow everyone to consult these accounts and measure the financial health of the company. However, a company can request not to publish its annual accounts if the company does not exceed 2 of the following three thresholds: € 350,000 in total assets € 700,000 in net sales 10 employees To maintain the confidentiality of the accounts, a company can attach a declaration of confidentiality which allows only law enforcement authorities to have access to such accounts. Reporting a change in the Name of the Company There can be many reasons for changing the name of the company, such as a merger with another company or the owners feeling that the name does not do justice to their work activities. The name of a company appears in its by-laws. Thus, the first thing the company should do is to introduce modifications to its by-laws by calling a session of an Extraordinary General Meeting (EGM). Thereafter, an official notice has to be published in a Legal Announcement Journal where both the old name and the new name of the company are mentioned. Once the publication has been done, the next step is filing a demand to change the company’s name in the Commercial Court where the company is located. The demand for the change of the company’s name consists of the following document: Cerfa M2 form, which can be filed online; Certified copies of the name change act; Additional certified copies of the notice in the Legal Announcement Journal; Payment proof to the Commercial Court; and An agreement of the legal representative of the company. Filing changes regarding the Directors or in the representation of the company In order to change a director in a French-registered company, the company has to convene an Extraordinary General Meeting (EGM) where the shareholders can vote for the removal or appointment of the new director of the company. After voting, the company has to publish a notice in a Legal Announcement Journal where the 3rd parties get to know about this change. Finally, the by-laws of the company are supposed to be changed accordingly. The following documents are supposed to be submitted to the Commercial Court: After Holding the EGM: A transcript of the minutes of the meeting. A copy of the new by-laws being certified by the outgoing director Form M3. A copy of the notice to be published in the Journal. The new director of the company has to give the following: A statement that no criminal convictions are held and an affiliation certificate A copy of an official identification document such as a passport, ID card etc. Changes in the Registered Office Every company that is registered in France and wants to change/ relocate the registered business address of the company needs to inform the Commercial Court. The procedure of change in the official registered business address of the company involves the following steps: Inform the Commercial Court: it is illegal to change the registered address of the company without notifying the Commercial Court of such relocation and receiving their approval regarding the same. For notification purposes, the company has to send an application to the Court and after obtaining the court’s approval, proceed towards the next step. Entering the new location: the company has to provide the new location of the address of the company along with other details in the change of registered address form. The other information to be provided in the form includes the name of the company, the business’s name, the address of the modified registered address and a director’s signature signifying the approval of such change. Payment of the additional fees: after filing the form, the company has to pay the additional office address alteration fees. It must be remembered that while changing the registered office address of the company, the by-laws of the company are also changed. There are two other fixed costs involved in the process, i.e. publishing this news in the recognised journals and court fees. Transfer of shares: SA: The articles of association may permit the transfer of shares with the approval of the corporate body. It must be noted that French Companies do not prescribe a specific majority for the approval of the envisaged transfer. SARL: Transfer of shares in France is subject to the prior approval of the other shareholders at a specific majority specified by the law regulating companies. The process can be made more stringent with the help of articles of association of the company. The transfer of shares can also be done among shareholders if the articles of association of the company permit. SAS: In the case of SAS companies, the articles of association may provide that the transfer of shares may be subject to the approval of the shareholders or may block the transfer of shares for a fixed period of time, or a shareholder may be obliged to transfer shares in certain circumstances. . French Branch: Since a French branch does not have shares, there is no question of transfer of the shares. Appointment of a statutory auditor: In the case of commercial companies, the appointment of a statutory auditor becomes compulsory if at least 2 of the following three thresholds are breached by a company at the end of the financial year: The total balance sheet of the company is at least € 4 million Euros The net turnover of the company is at least € 8 million Euros At least 50 employees are employed by the company In commercial companies, if a subsidiary individually meets any of the above two requirements, then a statutory auditor has to be appointed by such companies by each such subsidiary. In the case of a parent company controlling a small group that exceeds, in a combined capacity, at least 2 of the abovementioned thresholds, then a statutory auditor has to be appointed unless, the parent company is itself being controlled by a company that has appointed a statutory auditor. Further, subsidiaries of Small Groups are also obligated to appoint a statutory auditor if at least 2 of the following thresholds are exceeded by the company by the end of the financial year (Significant Subsidiaries): The total in the balance sheet is at least € 2 million Euros The net turnover of the company is at least € 4 million Euros The company has employed a minimum of 25 employees In the case of Significant Subsidiaries of Small Groups, where a company that appoints an auditor (i) on a voluntary basis or (ii) on a mandatory basis shall decide that the auditor will carry out specific audit tasks for the small businesses, which means that the tasks and duration of office of such statutory auditor shall be limited. In all the cases where a statutory auditor appointed is a natural person or a single shareholder company, a deputy statutory auditor is also required. SA: the first appointment of the statutory auditor is made as per the articles of association for a 6-year long term. The subsequent appointment is made by an ordinary general meeting for a renewable six-year term. However, the term of office for an auditor to execute a specific legal audit is 3 years. Where a deputy auditor is required, it replaces the principal auditor in the event of death or incapacity. SARL: appointment of a statutory auditor is done by a shareholders’ meeting for a duration of 6-year term. However, the term is only 3 years, where the auditor is appointed to execute specific legal audits for small businesses. In the case of a statutory auditor appointed on a voluntary basis, the duration of office may be 3 or 6 years. Where a deputy auditor is required, it replaces the principal auditor in the event of death or incapacity. SAS: the first appointment of the statutory auditor is made as per the articles of association for a 6-year long term. The subsequent appointment is made by an ordinary general meeting for a renewable six-year term. However, the term of office for an auditor to execute a specific legal audit is 3 years. Where a deputy auditor is required, it replaces the principal auditor in the event of death or incapacity. French Branch: the appointment of a statutory auditor is not mandatory in the case of French branches. Duty to declare “Ultimate Beneficial Owner”: Every legal entity that is registered with the Companies’ registry in France is under an obligation to declare its “ultimate Beneficial Owner” to the registry. The business entity in France has to declare the identity of any natural person who: Holds directly or indirectly more than 25% share capital or voting rights in the company; or Exercises control over the company by any other means. The business entity has to file an amended declaration about any fact or event that results in the modification or addition to such information within a duration of 30 days from the occurrence of such event. It must be noted that only authorised persons may have access to such information. Shareholders meeting requirements and Board of Meeting requirements: Shareholders’ Meetings SA: There is an obligation on the SA companies to hold a shareholders’ meeting every year for the purpose of approval of annual accounts and other important works for the company. These shareholders’ meetings are supposed to be conducted within a duration of 6 months from the closing of the last financial year. SARL: Similarly, there is an obligation on the SARL companies to hold a shareholders’ meeting every year for the purposes of approval of annual accounts and other important tasks for the company. These shareholders’ meetings are supposed to be conducted within a duration of 6 months from the closing of the last financial year. SAS: if the by-laws of SAS companies permit, the shareholders’ meetings shall be held at least once every year in order to approve the accounts of the company and for executing other important works for the company. These shareholders’ meetings are supposed to be conducted within a duration of 6 months from the closing of the last financial year. French Branch: there is no obligation on the French branch to hold a shareholders’ meeting. Board of Directors’ Meetings SA: The Board meetings of the company are conducted at least at those intervals when required by law or according to the by-laws of the company for the preparation of the annual accounts and interim accounts of the company. SARL: Since there is no mandate for the appointment of the Board of Directors in the first place, there is no obligation to conduct Board Meetings. SAS: French law does not prescribe a particular management structure for SAS companies except for the appointment of a President. Therefore, there is no obligation on the part of SAS companies to organise Board meetings. However, if the by-laws of the company permit, then the company can hold board meetings. French Branch: Similarly, there is no mandate for French branches to organise board meetings.