Doing Business in France - RSM International
Doing Business in France - RSM International
Doing Business in France - RSM International
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2 Types of bus<strong>in</strong>ess organisations<br />
2.1 Introduction<br />
In <strong>France</strong>, an entrepreneur can choose between two k<strong>in</strong>ds of legal structure: sole<br />
trader (entreprise <strong>in</strong>dividuelle) and partnerships/company (société).<br />
There are two k<strong>in</strong>ds of entities <strong>in</strong> <strong>France</strong>, civil (ma<strong>in</strong>ly restricted to either professional<br />
services or real estate activities) and commercial ones (engaged <strong>in</strong> trade or bus<strong>in</strong>esses).<br />
A sole partner may also choose to run a bus<strong>in</strong>ess without creat<strong>in</strong>g a company.<br />
Regard<strong>in</strong>g the partner responsibility, several k<strong>in</strong>ds of commercial companies can be used<br />
as corporate veils <strong>in</strong> order to protect the partners’ personal assets <strong>in</strong> case of bankruptcy.<br />
Depend<strong>in</strong>g on the form of the company, the rules applicable may be different and<br />
cover the follow<strong>in</strong>g subjects:<br />
• Structure of the management and managers’ level of power,<br />
• Shareholders meet<strong>in</strong>g quorum and majority rules,<br />
• M<strong>in</strong>imum capital required,<br />
• Sale of shares to third parties,<br />
• Audit requirements.<br />
2.2 Formation of a Company<br />
Unlike other countries, <strong>in</strong> <strong>France</strong>, the rules, rights and obligations are the same for all<br />
companies whether they are French or foreigners.<br />
There are numerous types of company structure which are provided by French<br />
commercial and civil Law, however today the great majority of trad<strong>in</strong>g entities <strong>in</strong><br />
<strong>France</strong> have taken the form either of a:<br />
• Entreprise Individuelle - One man bus<strong>in</strong>ess - EIRL<br />
• Société Anonyme (S.A.) - Corporation<br />
• Société à Responsabilité Limitée (S.A.R.L. / E.U.R.L. ) – Limited liability company<br />
• Société par Actions simplifiée (S.A.S. / S.A.S.U.) – Simplified jo<strong>in</strong>t stock company<br />
• Société en non collectif (S.N.C.) – General partnership<br />
• Société civile (S.C) – Civil company<br />
DOING BUSINESS IN FRANCE | 7