Legal Formalities for the Formation of a Company:- You are faced with a blank sheet … you wonder where to start to create your company. This guide gives you the essential steps to follow for the formalities of creation: from the choice of the statutes to the registration of the company. Below are the Steps to follow for the formation of a Company.
Legal Formalities for the Formation of a Company
- Choose the legal status of the company
- Write the statutes of the company
- Deposit the funds and evaluate the contributions in kind of the share capital
- Publish a legal announcement of incorporation
- Send the file of creation of the company to the CFE
1 – Choose the Legal Status of the Company
The first question to ask when creating a company, the choice of the legal status of the company implies consequences from its inception and throughout its operation. Most young entrepreneurs opt for SARL – a limited liability company – or SAS – a simplified joint-stock company – or their one-person form – EURL or SASU.
Comparison between SARL and SAS
- Increased flexibility in the drafting of the SAS statutes.
- Total flexibility in the SAS operating mode.
- The manager of SARL, majority manager, is a self-employed worker: he contributes to the RSI – social contributions and lower pension benefits.
- The head of the SAS, president of the company, is assimilated as an employee when he receives remuneration: he falls under the Social Security system
- Payroll taxes and higher pension insurance.
As a general rule, it is recommended to privilege the SAS – or the SASU in the case of a single shareholder – for a startup company project. The SARL – or EURL in the case of a sole shareholder – corresponds more to a family business project with an advantageous status for the spouse.
2 – Write the Articles of Association
After having chosen between SARL and SAS, the future entrepreneur must draft the statutes of his company. The articles of association constitute the contract between the partners. They lay down the rules governing the operation and organization of the company and govern relations between partners and their relations with third parties.
The Articles of Incorporation mention in particular the name of the company, the address of its registered office, the amount and distribution of the share capital and the terms of management.
Warning: under penalty of penalty, the articles of incorporation of a company must contain certain mandatory information.
As a contract, the statutes of the company represent a document with consequences and major issues, the drafting of which – delicate – must be meticulously considered. In this context, it is advisable to get closer to a professional: lawyer or lawyer, or accountant.
3 – Deposit funds and assess in-kind Contributions of Social Capital
Every company is identified, among other elements, by its social capital. It represents the amount of the contributions granted by the shareholders or the shareholders to the new legal person in exchange for shares or shares. Social capital can be made up of several types of contributions:
- Cash contributions – sums of money.
- Contributions in kind – goods.
At this stage of the formation of the company, the partners must deposit the funds corresponding to their contributions in cash to a bank.
He banking institution issues a certificate of deposit of funds – to be attached at the time of sending the file of creation of the company to the CFE (Center of Formalities of the Enterprises). Upon presentation of K-bis, once the company is incorporated, the entrepreneurs will have access to the company’s account.
Contribution in kind:
Where the share capital is made up of contributions in kind, the business creator must evaluate them. In SAS, shareholders must have recourse to an investment commissioner if the value exceeds half the share capital or that a contribution in kind exceeds $ 30,000.
4 – Publish a legal announcement of incorporation
Before registering the company to give it a legal existence, it is necessary to publish an advertisement in a newspaper of legal advertisements. The legal announcement contains the information of the company – social form, denomination, registered office, social capital. The legal notice journal invoices the publication on behalf of the company in training.
5 – Send the file of creation of the company to the CFE
Once the 4 previous steps have been completed, the business creator can prepare his CFE file. The business creation file required for the registration of the company includes:
The Cerfa M0 – P0 registration form in the case of a sole proprietorship, EURL or SASU – duly completed.
- A copy of the definitive articles of association signed.
- Certificate of deposit of funds.
- A copy of the notice of insertion of company creation / mute all in a legal notice journal.
- A declaration on the honor of non-condemnation, with mention of filiation.
- Copies of officers’ identity documents.
Once complete, the business creation file must be sent to the CFE for registration of the new company.
Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
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