Types of French companies

The types of French trading entities which you are likely to come across are:

SCI - Société Civile Immobilièe:

This is a transparent civil real estate holding company. It is sometimes used by English resident purchasers of French property to circumvent the compulsory French airship rules. The use of the SCI as a purchase vehicle fell out of favour over the last five years because the English tax authorities were intimating that the Directors of such companies might be responsible for tax on the value of the property as a benefit in kind. However an announcement made within the latest budget in March 2007 indicated that the English authorities would no longer take this view, provided certain conditions are met.

Thus SCIs can be a useful vehicle for several people purchasing together who may be unrelated, business partners, or to circumvent French inheritance rules. This will of course only achieve the desired result for people who are resident in the UK. The disadvantage is the expense of setting up the SCI and the annual administrative costs incurred to comply with French fiscal requirements.

SARL - Société A Responsabilité Limitée:

This is similar to a UK limited company in concept. It is suitable for a relatively small number of participants who know each other reasonably well. This type of company is represented by a managing director (Gerant) who can bind the other participants within the company. The participants are not responsible for any losses over and above the capital contributed.

Entreprise individuelle:

this is the French equivelent of a sole trader

EURL - Entreprise  Résponsabilite limitée:

This is similar to a SARL save that there is a sole director and shareholder. The advantage is that of limited liability, the disadvantage is the increased formalities involved in the running of such a company.

SNC -  Société en nom collectif :

This is similar to a partnership in concept in that each participant has unlimited liability for themselves and each other. Minimum 2 people. No minimum capital requirements

SA - Société Anonyme :

Suitable for larger enterprises in that the minimum capital requirement is high. There must be a minimum of 7 participants.

SAS - Société par actions simplifiee :

High capital required. Has a degree of extra flexibility than the SA