Stock Corporation

General Information

The French SA offers the advantages of liability limited by shares, relatively easy transfer of shares and access to stock markets.

Incorporation

Formation by at least seven persons - individual or legal, nationality irrelevant. Establishment by way of transformation also possible. Membership may not exceed 100.
Incorporation requires inter alia notarial deed of articles of association and registration with the tax authorities. Furthermore the founders have to file a request for entry into the companies' registry (register du commerce et des sociétés), which is followed by the announcement in a legal journal.
Registration: Application must be submitted at a filing office for the companies' registry; the registry is held at the Commercial Court competent for company's corporate seat.
The company comes into legal existence immediately upon registration.

Duration of incorporation approximately 1 - 2 weeks; in urgent cases approximately three days.

Incorporation costs of approximately € 500 (€ 380 - 430 for publication, € 40 for filing, € 60 registration fees).

Capitalisation and Financing

The statutory minimum share capital, of which 50 % must be paid in prior to registration, amounts to € 37,000, if shares are offered to the public to € 225,000. Shares can be paid in cash or kind. If paid in kinds, value-statement by certified public accountant must be obtained.

Board Structure

An AS may either be managed by a board of directors of at least three members (conseil d´administration; standard construction) or by a management committee of at least three members (directoire) under the control of a supervisory board (conseil de surveillance).
The company is generally bound by any action of the board/committee vis-à-vis third parties.

Shareholders' decisions are made by way of shareholders' resolutions at annual or extraordinary general meeting. Annual meetings must be held within six months of the end of fiscal year.

Annual Costs

About € 40 (annual filing costs).

Corporate Taxation and Financial Reporting

French corporations and foreign corporations, which have a permanent establishment in France, engage in complete commercial cycle or have an agent in France with the power to bind the company, are subject to corporate income tax.
Tax rate of 33.83 % on profits up to € 2,289 million and 34.93 % on profits in excess of € 2,289 million.
Annual accounts must be drawn up at the end of the financial year. Accounts must consist of balance sheet, profit and loss statement and annex. Accounting must be done in accordance with French GAAP.

Employee Participation in Corporate Bodies

Marginal: only if employees hold more than 3 % of share capital, employee has to be elected to the board. Elected employees, however, do not have voting rights.