Creating an SA or SAS: How exactly do I do it?

Creating SA and SAS

If you’re familiar with creating an SARL  in France, you already know that it can be pretty complicated.
Well, creating an SA is the same, but worse: the only real difference is that there’s even more stuff you have to do, and that it’s even more complicated.
As such, we’ve made sure to include everything you need to do to get your SA/SAS running in this here guide.

Make sure to read about why you should consider the SA, and why you should consider the SAS!

Summary:

1. Before defining the company by-laws
2. Getting the by-laws adopted
3. Registering the company

Before defining the company by-laws

Check whether the activity is regulated or not

This is an important step, because if it is, you’ll have to make sure your company fulfills additional conditions. You may also be required to carry out specific procedures (application for a professional card, authorization, registration to a list or an order, etc.).
If you want to know if the activity is regulated, you should check one of the followings:

• the ” Activities and regulated professions ” section of the AFE website,
• professional organizations and unions,
• the Chamber of Commerce and Industry or Chamber of Crafts and Crafts,
• the departmental directorate in charge of the protection of populations (DDPP), the departmental directorate in charge of social cohesion and the protection of populations (DDCSPP) or the management of companies, competition, consumption, labor and employment (DIECCTE) in Overseas,
• economic action services of the prefecture.

Visit the Corporate Formalities Center (CFE)

The CFE must do quite a bit of paperwork for you. It has the task of centralizing the documents of the registration file and transmitting them to the various bodies involved in the creation of the company: The Urssaf, tax services, INSEE, Social Security for the self-employed (formerly RSI), etc.

The CFE branch that you must go to is located:

• to the chamber of commerce and industry within the jurisdiction of the company’s registered office if your activity is commercial, industrial or liberal
• to the chamber of merchants and crafts of the jurisdiction of the head office if your activity is craft or mixed (artisanal and commercial),
• to the chamber of agriculture of the jurisdiction of the head office if your activity is agricultural.

The CFE will give you the documents you need to fill in as well as the list of documents required to proceed with the registration of the company.

The CFE is also competent to receive requests for Accre (partial exemption from social charges).
If you want to benefit from this service, you have to file a specific application form for Accre. You can either file the declaration when creating the company, or within 45 days.

Note: if the spouse of the creator participates regularly in the activity, it will be necessary to declare to the CFE the option for one of the following statutes: collaborating spouse, employee or partner.

Doing an introductory internship in management:

• For Artisans:

An installation preparation course (SPI) of at least 30 hours is mandatory if you want to apply for registration in the Trade Directory (the cost of about 260 € may vary from a trades chamber and from crafts to another).

This course aims, through courses and practical work, to allow future leaders to know the conditions of their installation, the problems of financing, the techniques of forecasting and control of their exploitation, to measure the knowledge essential to the sustainability of their business and to inform them of the possibilities for continuing education adapted to their situation.

You may be exempted from this formation depending on your diplomas or experience.

Even in this case though, this internship remains available to the spouse and eventual family members.

• For traders

An introductory course in management is also offered to the creators of commercial or industrial companies, but it remains optional.

• Reimbursement of internship fees

In some cases, these courses can be paid back:

• • If you are a job seeker, for example, Pôle Emploi (The French Employment Agency) can grant you Individual Training Assistance (AIF), after validation by your Pôle Emploi advisor.

However, remember that you need to ask to be reimbursed at least 15 days before the start of the internship.

• • If you have to follow an SPI (Instalment Preparation Internship), the cost of this internship can be supported by your training council instituted at your regional chamber of trades and crafts.

Be careful! The request must be submitted at least 1 month before the start of the training.

Find an office

You can exercise his activity, or set up your office in:

• a specific room that he can rent or buy,
• a domiciliation company, in a nursery, …
• at home, under certain conditions.

Whatever your situation is, you will have to prove to the CFE that you do indeed use this office.  (lease, contract of provision, sublease contract, domiciliation contract, etc).

You need to remember that setting up an office can be particularly tedious, time-consuming and expensive, though. You can always find help by visiting www.companow.com .

Choose a company name and, if applicable, a business name and a domain name

As a precaution, you should always check with the INPI (National Institute of Industrial Property) that the name chosen for your company is not already used by another company or has not been the subject of a trademark deposit.

If you want to create a website, it’s also worth your time to check that the domain name is available.

In case of contributions in kind or in industry

• Contributions in kind (contributions of goods other than money such as vehicles, equipment, goodwill, etc.)

Their description and value have to appear in the by-laws.
As such, it is mandatory to use the services of an auditor who can evaluate these goods.
If the associates cannot unanimously designate an auditor, then the president of the Trade Court of the area will have to do it.

Note: A list of contribution auditors is available from the commercial courts.

• Contributions in industry (Technical knowledge, work or service made available to the company by a shareholder directly related to the company’s purpose)

Shareholders/associates of simplified joint stock companies (SAS) may make contributions in industry and receive, in exchange, inalienable shares. The statutes of the SAS must set the procedures for subscription and distribution of shares for such contributions.

However, this is not possible for an SA.

Getting the by-laws adopted

The contributions in cash (sums of money brought by the associates) must be deposited, within 8 days of their reception, either:

• on a bank account opened in the name of the company
• At the Caisse des Dépôts et Consignations
• At a notary.

Don’t worry though! These funds will be released and transferred to a current account opened in the name of the company as soon as you present the excerpt K-bis (extract recording the registration of the company in the Register of Commerce and Companies). From that moment on, the manager (s) will be able to freely use of these sums for the needs of the company.

Note: the mention of the deposit of funds must appear in the by-laws.

Proceed to the appointment of the manager(s)

• For the SA:
  • While the first director has to be named in the by-laws, the others are determined by the General Assembly.
  • Note: an SA must have a between 3 and 18 directors

Unless it is explicitly stated in the by-laws, it is not mandatory to hold a minimum number of shares to be appointed director: as such, there’s nothing preventing a third-party from becoming director (again, unless it is stated in the company by-laws)

Once the by-laws are signed, the board of directors will meet to appoint its chairman and, if applicable, the general manager (s).

• For the SAS: The founders are free to do whatever they want to decide how to appoint managers.

There’s only one imperative, and that’s that someone (natural or legal person) has to be named to represent the company with third-parties.

Proceed to the appointment of the auditors

• In SA, the presence of an auditor is mandatory and must be designated in the by-laws.
• In SAS, it is only mandatory if one of the following conditions is met:
  • the company exceeds, at year-end 2, the following 3 thresholds:
    • balance sheet total over € 1,000,000,
    • turnover exceeding € 2,000,000,
    • average number of permanent employees employed during the financial year exceeding 20 employees,
  • it controls or is controlled by one or more companies,
  • one or more partners representing at least one-tenth of the capital apply for the appointment of an auditor.

Establish a statement of acts performed in the name and on behalf of the company in formation

Your company isn’t a legal entity until it is registered in the Trade and Commerce register. As such, it can’t make any commitments.

However, that doesn’t mean you won’t have any expenses to make, or contracts to sign. You can thus do that by signing “in the name and on behalf of the company (name of the company) in the course of training” and report all these commitments (signing a lease, a contract of employment, purchase of material etc.) in an act which will be annexed to the by-laws. The signing of the by-laws by the partners will then be taken by the company.

Write the By-laws

Establishing by-laws is an important act that can have legal and fiscal consequences. It can even influence the social status of the manager. As such, you should probably get a legal professional to look over what you’re doing.

Generally, the by-laws of an SA are supplemented by pacts of partners/shareholders. These are agreements by which the partners/shareholders seek to organize, often for a long time, control of the management of the company and that of the composition of its capital.

As for the SAS, it is a type of company that is very attractive because of its flexibility and particularly because of the autonomy left to the partners in organizational choices. The by-laws must therefore be drafted with rigor and precision.

Registering the company

Publish a notice of incorporation in a legal notice newspaper

This notice must indicate:

• the company name followed by its acronym (if applicable)
• the legal form,
• the amount of the share capital,
• the social object,
• the address of the seat
• the duration of the company,
• the names and address of the officer, the directors, the chairman of the board of directors, the managing director, the members of the executive board or the supervisory board, the statutory auditors (holder and alternate) and persons with the power to engage the company towards third parties,
• the procedures for admission to meetings and the exercise of the right to vote (including the conditions for granting double voting rights),
•  any clauses relating to the approval of transferees and the designation of the social body empowered to decide on applications for approval,
• an indication of the commercial and company register with which the company will be registered.

The creator can turn to a newspaper specializing in legal announcements or a non-specialized newspaper authorized to publish such ads in his department.

For a list of these newspapers, contact your business registration center or your prefecture.

Once they’ve been signed, register the by-laws within one month

Since 1 July 2015, the registering the by-laws is no longer mandatory.

In some cases though, you still have to register them with the Service of Taxes of Companies (SIE):

• if the form of the act so requires, in application of article 635 of the CGI (Ex .: the act of incorporation of the company has the notarial form),
• if the act involves a particular transaction subject to registration (eg: sale of business assets, shares or shares).

Finish the paperwork for the creation of the company at the CFE

Once these steps have been completed, You have to:

• Either go to the CFE to file the complete file of his declaration of activity

The application form must include a number of supporting documents.

Be careful, though! The mentions indicated in the by-laws and in the application form must be exactly the same (eg if the statutes provide an acronym, make it appear on the form, etc.)!

Once the complete file has been filed, will soon give you a “Business Creation File Receipt” (RDDCE) including the mention “pending registration” and, possibly, the identification number of the company that the INSEE gave you. This RDDCE is valid until the notification of the registration of the company to the head of enterprise or at most for 1 month from its issuance. It enables it to carry out the steps necessary to start up the company’s activity with public and private organizations (EDF, La Poste, etc.).

From this moment, the company is in the process of registration. It will be officially born on the day of her registration in the Trade and Companies Register.

Note: the CFE also plays the role of a one-stop shop and can receive all the applications for registration, authorization or declaration necessary to start certain activities, beyond the actual creation (ex: authorization of exercise , registration on professional registers, declaration in town hall or prefecture related to the opening, etc.).

• Or declare your business online

The file sent electronically must contain:

a digital form containing all the information declared,

the digital or digitized documents to be provided (including the mandates given to carry out the formalities of the creation of the company) as well as the constituent authentic acts, except if they must be presented in original or in paper form,

and, if applicable, a proof of payment of the additional costs incurred.

The CFE will give you an electronic acknowledgment of receipt as soon as the file is received.

The website www.guichet-entreprises.fr also makes it possible to carry out corporate reporting formalities online regardless of the activity carried out, and to carry out the requests for cards, authorizations, registration with a professional order, etc. in the context of the creation of a business engaged in certain regulated service activities.