- Category: The activity
Starting a new activity within your French company
If you’ve got a business, it’s likely that at some point, you will think of expanding your company by beginning a new activity.
In France, that is entirely possible! There are two ways to do it: you can either change your corporate object or create a branch.
Creating a branch
Here, you will effectively create an entirely new company that will practice this new activity. Despite the existing company owning more than 50% of the capital of the branch, the branch is still largely independent from the “mother company”.
Since you’re basically creating a new company, this will cost as much as creating a brand new business.
Changing the corporate object
This allows you to have the existing company practice this new activity. Since the corporate object is what defines the main activity of a company, a business cannot perform an activity that is not listed on its corporate object. This is why it is necessary to modify it to begin a brand new activity.
However, to modify the corporate object, you have to change the company’s by-laws. It’s not as expensive as creating a branch, but it can still cost a fair amount of time and money, since it requires organizing an Extraordinary General Meeting, publishing a notice in a Legal Announcement Journal, and filing the new by-laws to the CFE (Companies Formalities Center).
As such, it’s worth taking your time to figure out what option is the best for your company!