Business Creation: Complete Legal Steps 2026

Introduction

Starting a business in France is a structured legal process that requires a thorough understanding of administrative and legal procedures. Whether it’s a sole proprietorship, an SARL, or an SAS, each legal structure entails specific requirements regarding the drafting of articles of incorporation, registration with the Trade and Companies Register (RCS), and tax status. Since the single-window system managed by the INPI took effect on January 1, 2023, the formalities have been digitized, profoundly changing the process. This Pillar guide details all the legal steps, pitfalls to avoid, and tax implications for each structure, to ensure the success of your entrepreneurial venture from the very beginning.

1. Choosing a Legal Structure and Drafting Articles of Incorporation

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

The articles of incorporation must include the corporate name, the corporate purpose, the registered office, the term (maximum 99 years), the share capital, and the operating procedures. For an SAS, Article L. 227-1 of the Commercial Code provides considerable flexibility in drafting the articles of incorporation, allowing for the customization of the powers of the president and the management bodies. In contrast, the SARL is more strictly regulated by Articles L. 223-1 et seq.

Drafting requires particular attention to the approval, preemption, and exit clauses (drag-along, tag-along) that protect the partners. A common mistake is to underestimate the importance of the partners’ agreement, a document that supplements the articles of incorporation but is essential for governing relations between partners. Consulting an attorney or a certified public accountant is strongly recommended to avoid costly future disputes.

2. Registration and formalities with the commercial registry

As of January 1, 2023, all business formation formalities are handled through the INPI’s one-stop shop (Article 1 of the PACTE Act of May 22, 2019). This platform replaces the former CFEs (Business Formalities Centers).

The application for registration with the RCS must include: the signed articles of incorporation, proof of capital deposit (for companies with capital), proof of publication in a legal gazette (JAL), a declaration of no criminal convictions for the executive, proof of registered address, and the legal representative’s identification document. Article R. 123-53 of the Commercial Code specifies the required documents.

Registration results in the assignment 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 after validation. For regulated professions (lawyers, doctors, real estate agents), additional registration with the professional association or obtaining a professional license is required beforehand.

3. Tax Regime and Reporting Requirements

The tax regime depends closely on the chosen legal structure. Self-employed individuals under the “auto-entrepreneur” status benefit from the micro-tax regime with a flat-rate deduction (71%, 50%, or 34%, depending on the business activity) and may opt for the lump-sum income tax payment (Article 151-0 of the General Tax Code).

By default, SARLs and SASs are subject to corporate income tax (IS) at a 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 5 years.

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

Real-world use cases

Case 1 - Independent Consultant in a Micro-Enterprise: Marie, an HR consultant, sets up a sole proprietorship to bill for her services. Projected revenue: €60,000. She qualifies for the VAT exemption (< €36,800, which is gradually phased out) and a 34% tax deduction. Procedure: Online registration via the INPI one-stop shop in 15 minutes.

Case 2 - Setting Up a Family-Owned LLC (Food Service): Three partners form an SARL with €15,000 in capital to open a restaurant. They opt for the 5-year income tax deferral because it is a family-owned SARL. Drafting of articles of incorporation with a strengthened approval clause. Total registration cost: approximately €230 (JAL + INPI).

Case 3 - Startup organized as an SAS that has raised funds: A tech startup chooses the SAS (simplified joint-stock company) structure to attract investors. Customized articles of incorporation with preferred shares, BSPCE stock options for employees, and a detailed shareholders’ agreement. Initial capital of €10,000 with preferential liquidation clauses.

Legal compliance and references

Starting a business operates within a complex legal framework. The Commercial Code (Articles L. 123-1 through L. 123-11) governs registration and the Trade and Companies Register (RCS). The Civil Code (Articles 1832 through 1844-17) governs the articles of incorporation. Directive (EU) 2019/1151 on the use of digital tools has accelerated the digitization. For regulated professions, the Code of Professional Conduct for Attorneys (Decree No. 2005-790) imposes specific obligations, particularly regarding attorney-client privilege (Article 226-13 of the Penal Code). ISO 9001 standards may be applied 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 incorporation. Commitments made prior to this date are made on behalf of the company in formation, and they must be expressly assumed by the company once it is registered. If such commitments are not assumed, the founder who signed—a lease, a supplier contract, or 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 under the law. However, a symbolic amount of capital has two concrete effects—financial partners take it into account, and a clear insufficiency relative to the projected business activity may be held against the executive if the company proves unable to meet its obligations. The legal minimum is not the reasonable minimum.

Can articles of incorporation be signed electronically?

Yes, and the filing is done electronically. There is one exception: when a contribution involves real estate, the deed must be submitted in authenticated form. The key consideration is less about the signature and more about preservation—the articles of incorporation are required throughout the company’s existence, and the signed version must remain verifiable years later.

Is a company executive’s personal assets protected?

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

Can a company change its legal form at a later date?

Yes, through a transformation, without creating a new legal entity—the company retains its identity, contracts, and length of existence. However, the consequences are far from negligible: the executive’s social security status, tax implications, and majority voting rules. Anticipating likely changes when initially drafting the articles of incorporation is far less costly than amending them under duress.

Conclusion

Starting a business requires a methodical approach that combines strategic choices regarding legal structure, precise drafting of articles of incorporation, and scrupulous compliance with registration formalities. Digitization through the one-stop shop has simplified the process, but tax and social security complexities remain. Seeking guidance from a business attorney or a certified public accountant remains a worthwhile investment to ensure the project’s success. Anticipate future changes to your structure (fundraising, growth, sale) from the very beginning of drafting the articles of incorporation to avoid costly restructuring.