Joint Venture Company Registration Process France
Joint Venture Company Registration Process France
Normally there are some reasons why some companies or corporations would want to enter into a joint venture. Some of them are-
- To expand their markets to a new area or country
- To increase its business turnover or sales
- To access new technologies offered by a potential partner
- To go after new product development
Before setting up a joint venture company anywhere in the world, there are a few points to consider first. They are –
- Choice of business – Where will the partners decide to do this business? Will there be any special allocations as to the territory each of the joint venture partner will have?
- Targets and intentions – Have both the joint venture partners agreed on the targets and intentions? Is there any consensus on the initial budgets?
- Termination of the Joint Venture Company – How long will this business partnership last? Is there any agreed date as to when the Joint Venture company will be terminated?
- The type of company – Has the type of company to be set up been determined?
- Shareholding structure – Which of the business partners will have more say in the Joint Venture company?
Once the above has been decided and agreed upon by the Joint Venture partners, obviously a joint venture agreement would need to be signed. After that the process to register a company can take place.
Registering a Joint Venture (JV) company in France
There are basically two types of joint venture companies that can be set up in France. They are –
- Contractual – This is a joint venture set up normally for a specific purpose or a short term goal such as a completion of a certain project.
The JV agreement can be prepared in a foreign language other than French; However the Articles of Association of the company must be in French and must be filed with the French Registry of the Commercial Court or Greffe. ‘
The JV agreement must also comply with French contract law.
- Corporate JV – There are some more commonly incorporated companies for corporate JVs than others. Some of the commercial type of companies used are –
- A) Societe a Responsabilite Limitee (SARL) – also known as a limited liability company. It can be formed with a minimum of two person either individuals or a corporate company. The minimum paid up capital is EUR1 but as before it is recommended to have a minimum of EUR7, 500. This must preferably paid up in full upon incorporation of the company.
A statutory auditor must be appointed for this type of company if the following criteria are met-
- a) total number of employees exceed 50 persons
- b) balance sheet of the company shows an amount more than EUR1,550,000
- c) turnover of the company is more than EUR3,100,000
- B) Societe Anonyme (SA) – also known as a joint stock company. In order to incorporate this type of company there must be a minimum of seven shareholders. These shareholders can be individuals or companies. However it is mandatory that at least one of the shareholders must be an individual.
The minimum paid up capital is EUR37.000 of which 50% must be paid upon registration of the company. The balance can be paid within 5 years. It is also compulsory that a statutory auditor be appointed at the time of registration of the company.
- C) Societe par Actions Simplifies (SAS) – or known as a simplified joint stock company. Minimum shareholder requirement is only one person. While the minimum share capital for this type of company is EUR 1, it is highly advisable to start with a capital of EUR 37,000.
The condition of appointing a statutory auditor will depend on certain conditions. The appointment of the auditor is compulsory if the following conditions are met –
- a) the company has more than 20 employees
- b) the company has a turnover of more than EUR2,000,000
- c) the company’s balance sheet exceeds EUR1,000,000
The most commonly used company to set up a joint venture is the Societe par Actions Simplifiee (SAS) as it is the most flexible in terms of corporate governance and the limitations on the transfer of shares.
Process to register your company in France
- The most important aspect of setting up a company is coming up with the company name. For a joint venture company it will normally be a reference to the type of business that the JV company is doing or a joint names of the shareholders.
- After you have come up with the name, you need to check if there is a company with the same name already registered. This can be done online at Institut National de la Propriété Industrielle (INPI) (National Institute of Industrial Property) website. It is free of charge and doesn’t take long to check. If your company name is distinctive and there are no other companies currently using it, a certificate of reservation will be issued. You can then proceed with the registration process.
- It is preferable that you have a registered address in France. This is so that your company has an initial mailing address.
- You would then need to open a bank account. This is for you to deposit the share capital. A certificate or proof of deposit must be issued for the next step in the registration process.
- You would then need to register at the Centre de Formalités des Entreprises (CFE) (Business Formalities Centre). To do this the company’s representative must file a request for registration together with the necessary documents such as the certificate of reservation, the proof of deposit for the paid up capital, the type of company and its purpose.
After this process the CFE will send this information to other relevant government authorities and bodies and the registered company will receive different types of numbers.
- The final step is that the company is obligated to purchase special accounting books from Commercial Court or authorized shops.
Once the JV company is set up, it is normally registered with the French Trade and Companies Registry.