You will choose the legal form that suits the needs of your business, all you have to do is write the articles of association… It defines the rules of your company’s business and the relations between your partners and you.
However, the obligation to draw up articles of association when establishing a company depends on the legal form you have chosen. So you don’t need to write statutes if you decide to create:
- independent entrepreneur (EI)
- independent entrepreneur with limited liability (EIRL)
- microenterprise.
On the other hand, drafting of statutes is mandatory if you decide on one of the following legal forms:
- sole proprietorship with limited liability (EURL)
- limited liability company (SARL)
- limited liability company (SA)
- simplified joint stock company (SAS)
- general partnership (SNC)
- cooperative production company (SCOP)
- joint stock company (SCA) and joint stock company (SCS).
In fact, certain information is mandatory. You cannot ignore:
- Article L210-2 of the Commercial Code: “The form, the duration cannot be longer than ninety-nine years, the name of the company, the headquarters, the object of the company and the amount of the share capital are determined by the statute of the company”
- Article 1835 of the Civil Code: “Statutes must be drawn up in writing. They, in addition to the role of each partner, determine the form, object, name, registered office, share capital, duration of the company and the manner of its operations.
Point 1: company name or corporate name
You can choose any name, except:
- If it is a known brand
- If the name is already registered in INPI
- If another company has already used this name and operates in a neighboring area (reference to customers and geographical area)
The company name identifies your company as a legal entity.
The appointment of the administrator must be specified either in the statute itself or in a special act called an attachment to the statute. The advantage of this second practice is that you can amend the articles of association and have them re-registered each time there is a change of manager.
In the case of the appointment of a manager by a special act, the statute must clearly specify this in the chapter on the appointment of a manager. Therefore, we must specify the duration of the administrator’s mandate, the extent of his powers, possible compensation, the possibility of dismissal, conditions for the appointment of another administrator, etc.
Note that it is important to clearly define the manager’s status as this may have consequences for his or her assets.
You should also consider getting an internet domain name for your business, before you file your articles of association with the Commercial Court registry, or make your business name public.
Item 2: partner’s name
In the statute, you must enter surnames, first names, date and place of birth, residence and marital status for natural persons (and name, residence and SIRET number for legal persons). The statute regulates the distribution of authority in your company, especially between the manager and the shareholders’ assembly. You must list the partners of your company, as well as the number of shares they own. Include in your articles of association an approval clause in case of transfer of shares held by your partners. Otherwise, and without indicating the transfer of shares, the partners could at any time transfer their shares to persons outside the company. In particular, allowing new associates to enter, without you being able to oppose it.
Point 3: company activity
Do not hesitate to write a fairly broad definition of your activity, so as not to embarrass yourself if the scope of your interventions expands. However, you can provide a fallback solution by entering a sentence that expands your activity. The purpose of the company defines the areas of activity in which your company will operate. If you are not broad enough in defining your scope of action, the law will impose limits on you. This part will also serve as a reference for the assignment of the APE code (the main activity being carried out). This classifies French companies by type of activity.
Item 4: amount of share capital
The amount of capital, as well as its breakdown, must be specified in the articles of association. If the capital is €5,000, it can be divided into 500 shares (or shares for SARL), each worth €10, for example.
Point 5: adress of the headquarters
The address of the headquarters must be stated in the articles of association and when registering the company. The entrepreneur must be able to justify that he can use this address for his business. If the seat is located in the home of the president or manager, it will be sufficient to complete the certificate and submit a copy of the proof of address.
Item 6: account closing date
In order to complete the drafting of the articles of association, you must specify the date of closing of the business books. The duration of the first financial year is not necessarily 12 months. Your financial year is not necessarily based on the calendar year.
As a general rule, you should include a sentence like this in your articles of incorporation:
“The closing date of the annual financial statements is set for December 31”
Item 7: status registration
You must establish or cause to be established 4 original copies of your articles of association. These 4 copies must have the date and signature of the partner (present at the time of creation) and on each original of the statute. You have one month to register the statutes that you have dated and signed. These statuses are registered at the Center for Business Formalities or at the Tax Office closest to the address of your company’s headquarters.