Business Creation: Complete Legal Procedures 2026

Introduction

Setting up a business in France involves a structured legal process that requires a thorough understanding of the administrative and legal procedures. Whether it is a sole trader, a limited liability company (SARL) or a simplified joint-stock company (SAS), each legal form entails specific obligations regarding the drafting of articles of association, registration with the Trade and Companies Register (RCS), and tax regime. Since the single-window system managed by the INPI came into force on 1 January 2023, the formalities have been digitised, radically changing the process. This Pillar guide details all the legal steps, the pitfalls to avoid, and the tax implications for each structure, to ensure your business venture is on a sound footing right from the start.

1. Choosing a legal form and drafting the articles of association

The choice of legal form determines the entire regulatory framework applicable to the company: directors’ liability, taxation, social security arrangements and governance. Article 1832 of the Civil Code defines a company as a contract, which requires the articles of association for commercial companies (SARL, SAS, SA) to be drafted with great care.

The articles of association must specify the company name, the corporate purpose, the registered office, the duration (maximum 99 years), the share capital, and the operating procedures. For an SAS, Article L. 227-1 of the Commercial Code offers considerable freedom in drafting the articles of association, allowing the powers of the chairman and the management bodies to be tailored. Conversely, the SARL is more strictly regulated by Articles L. 223-1 et seq.

Drafting requires particular attention to be paid to the approval, pre-emption and exit clauses (drag-along, tag-along) that protect the partners. A common mistake is to underestimate the importance of the partnership agreement, a document that complements the articles of association but is essential for governing relations between partners. It is strongly recommended that you consult a solicitor or a chartered accountant to avoid costly future disputes.

2. Registration and formalities with the Companies Register

Since 1 January 2023, all business incorporation formalities have been carried out via the INPI’s one-stop shop (Article 1 of the PACTE Act of 22 May 2019). This platform replaces the former CFEs (Business Registration Centres).

The application for registration with the RCS must contain: the signed articles of association, proof of deposit of funds (for companies with share capital), proof of publication in a legal gazette (JAL), a declaration that the director has no criminal convictions, proof of registered office, and the legal representative’s identity document. Article R. 123-53 of the Commercial Code specifies the documents required.

Registration results in the allocation of a SIREN number by INSEE, a SIRET number and an APE code. The Kbis, an official document certifying legal existence, is issued within 24 to 48 hours following validation. For regulated professions (lawyers, doctors, estate agents), additional registration with the relevant professional body or the obtaining of a professional licence is required beforehand.

3. Tax regime and reporting obligations

The tax regime depends closely on the chosen legal form. Self-employed entrepreneurs benefit from the micro-tax regime with a flat-rate allowance (71%, 50% or 34% depending on the business activity) and may opt for the flat-rate income tax payment scheme (Article 151-0 of the French General Tax Code).

SARLs and SASs are, by default, subject to corporation tax (IS) at the reduced rate of 15% on profits up to €42,500, and 25% on profits above that amount (Article 219 of the General Tax Code). Family-owned SARLs or SASs may opt for income tax (IR) for a maximum of five years.

VAT is applied under three schemes: the basic exemption scheme (2024 thresholds: €36,800 for services, €91,900 for sales), the simplified scheme, or the standard scheme. Reporting obligations include the annual tax return, VAT returns (monthly or quarterly), and the CFE (Business Property Tax).

Real-world use cases

Case 1 – Self-employed consultant in a micro-enterprise: Marie, an HR consultant, sets up a sole trader business to invoice for her services. Projected turnover: €60,000. She is exempt from VAT (< €36,800, a threshold that is gradually being raised) and benefits from a 34% tax allowance. Procedure: online registration via the INPI one-stop shop in 15 minutes.

Case 2 – Setting up a family-run limited liability company (catering): Three partners set up a limited liability company (SARL) with €15,000 in capital to open a restaurant. They opt for the income tax scheme over five years as it is a family-run SARL. Drafting of the articles of association with a reinforced approval clause. Total registration cost: approximately €230 (JAL + INPI).

Case 3 – SAS start-up raising funds: A tech start-up opts for the SAS (simplified joint-stock company) structure to attract investors. Tailor-made articles of association with preference shares, BSPCE (stock option plans) for employees, and a detailed shareholders’ agreement. Initial capital of €10,000 with preferential liquidation clauses.

Legal compliance and references

Setting up a business is subject to a complex legal framework. The Commercial Code (Articles L. 123-1 to L. 123-11) governs registration and the Trade and Companies Register (RCS). The Civil Code (Articles 1832 to 1844-17) governs the articles of association. Directive (EU) 2019/1151 on the use of digital tools has accelerated the digitisation. For regulated professions, the Code of Ethics for Lawyers (Decree No. 2005-790) imposes specific obligations, particularly regarding professional secrecy (Article 226-13 of the Criminal Code). ISO 9001 standards may be used to structure the quality of in-house legal services.

Frequently Asked Questions

When does a company come into legal existence?

Upon registration, not upon signing the articles of association. Commitments entered into prior to this date are made on behalf of the company in the process of being formed, and must be expressly taken over by the company once it is registered. If they are not taken over, the founder who signed — a lease, a supplier contract, a subscription — remains personally and permanently liable for them.

Is a minimum share capital required?

No specific amount is required for the most common forms: one euro is sufficient in law. However, a symbolic capital sum has two practical effects — financial partners take this into account, and a clear shortfall in relation to the planned business activity may be held against the director if the company proves unable to meet its commitments. The legal minimum is not the reasonable minimum.

Can articles of association be signed electronically?

Yes, and the filing is carried out electronically. There is one exception: where a contribution relates to immovable property, the deed must be in authentic form. The key consideration relates less to the signature than to the retention of records — the articles of association are required to be retained for the entire life of the company, and the signed version must remain verifiable years later.

Is a company director’s personal assets protected?

In principle, yes, in a limited company, but there are three common exceptions: a personal guarantee required by a bank or landlord; mismanagement contributing to a shortfall in assets; and liability for certain tax and social security debts. The separation of assets protects the prudent director, not the negligent one.

Is it possible to change the legal form at a later date?

Yes, by way of conversion, without creating a new legal entity — the company retains its identity, its contracts and its length of service. However, the implications are far from negligible: the director’s social security status, tax treatment and majority voting rules. Anticipating likely changes when first drafting the articles of association is far less costly than amending them under duress.

Conclusion

Setting up a business requires a methodical approach combining the strategic choice of legal form, the precise drafting of the articles of association, and scrupulous compliance with registration formalities. Digitalisation via the one-stop shop has simplified the process, but the complexity of tax and social security matters remains. Seeking guidance from a commercial lawyer or a chartered accountant remains a worthwhile investment to safeguard the project. Anticipate future changes to your structure (fundraising, growth, sale) right from the initial drafting of the articles of association to avoid costly restructuring.