The Pacte law: What France’s new law means for companies

The impact of Pacte law

It seems that the new French President Emmanuel Macron is really putting emphasis on business creators! His latest reform meant to help with company formation comes in the form of the “Pacte Law”. But what exactly does it change?

Simplifying company creation
One of the things this law hopes to do is to create a platform where everything needed for company formation is readily available. Today, the procedure for creating a company can be long and tedious, because there are 7 different institutions that deal with company formation, and the ones you need to contact depends on what you’re planning to do.

Ideally, by 2021, entrepreneurs will be able to (somewhat) easily create a company online.

Reworking thresholds for the number of employees
Today, there are 49 different employee thresholds for companies. Basically, whenever a company starts having more employees than one of these thresholds, then different rules can apply when it comes to social security, taxation, etc.

With this law, for the most part, there will only be 3 more thresholds: 11, 50, and 250 employees, which will make it much easier for companies to develop.

Helping entrepreneurs bounce back after failure
The liquidation of a company is a process that can be long and expensive. From now on however, there will be a procedure that allows companies with no employees and more than 5000€ of assets to erase their debts.

The liquidation procedure will also be simplified and shortened for companies with a turnover lower than 300 000€, and for those with a turnover lower than 750 000€.

Making it easier to transfer companies
Overall, the procedures will be made much easier and quicker.

And much more
In total, there are 70 different planned measures in the Pacte law. Just some other dispositions are:

  • The removal of the “forfait social” for SMEs, a fee that employers have to pay
  • The modification of the Civil Code and the Commerce Code to make it easier for companies to take into account social and environmental concerns
  • Bringing together Public research and private companies
  • Supporting SMEs when they want to export their products
  • Protecting companies in strategic fields

Again, the Pacte law has many other measures. One thing’s for sure: the Pacte law is just another proof of how much Emmanuel Macron wants to promote company formation in France!