Business creation: Complete legal procedures 2026

Introduction

Setting up a business in France is a structured legal process that requires a thorough understanding of administrative and legal procedures. Whether it involves a sole proprietorship (auto-entreprise), an SARL, or an SAS, each legal form entails specific obligations regarding the drafting of the articles of association, registration with the trade and companies register (RCS), and the tax regime. Since the single window (guichet unique) managed by the INPI came into effect on January 1, 2023, formalities have been digitized, profoundly changing the process. This pillar guide details all the legal steps, the pitfalls to avoid, and the tax implications for each structure, in order to secure your entrepreneurial project from the outset.

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

The choice of legal form determines the entire regime applicable to the business: the director's liability, taxation, social security regime, and governance. Article 1832 of the Code civil defines a company as a contract, which requires rigorous drafting of the articles of association for commercial companies (SARL, SAS, SA).

The articles of association must state the company name, corporate purpose, registered office, duration (maximum 99 years), share capital, and operating procedures. For an SAS, article L. 227-1 of the French Commercial Code allows for great statutory freedom, making it possible to tailor the powers of the chairman and the governing bodies. Conversely, the SARL is more strictly regulated under articles L. 223-1 et seq.

Drafting requires particular attention to approval clauses, pre-emption clauses, and exit clauses (drag-along, tag-along) that protect the shareholders. A common mistake is underestimating the importance of the shareholders' agreement, a document that complements the articles of association but is essential for governing relations between partners. Engaging a lawyer or an accountant is strongly recommended to avoid costly disputes down the line.

2. Registration and formalities with the trade and companies register

Since January 1, 2023, all business creation formalities are carried out via the INPI's single window (article 1 of the PACTE law of May 22, 2019). This platform replaces the former CFEs (Business Formalities Centers).

The RCS registration file must contain: the signed articles of association, the certificate of deposit of funds (for companies with share capital), the certificate of publication in a legal announcements journal (JAL), the director's declaration of no conviction, proof of registered office address, and the legal representative's identity document. Article R. 123-53 of the French 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, the official document proving legal existence, is issued within 24 to 48 hours after validation. For regulated activities (lawyers, doctors, real estate agents), additional registration with the professional body or obtaining a professional license is required beforehand.

3. Tax regime and reporting obligations

The tax regime depends closely on the chosen legal form. Sole proprietors (auto-entrepreneurs) benefit from the micro-tax regime with a flat-rate allowance (71%, 50%, or 34% depending on the activity) and can opt for the final withholding payment of income tax (article 151-0 of the French General Tax Code).

SARLs and SASs are by default subject to corporate income tax (IS) at the reduced rate of 15% up to €42,500 in profits, then 25% above that (article 219 of the French General Tax Code). An option for income tax (IR) is available for family-owned SARLs or SASs for a maximum of 5 years.

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

Practical use cases

Case 1 - Independent consultant as a sole proprietor (micro-entreprise): Marie, an HR consultant, sets up a sole proprietorship to invoice her services. Projected revenue: €60,000. She benefits from the VAT exemption (below €36,800, exceeded progressively) and a 34% tax allowance. Procedures: online declaration via the INPI single window in 15 minutes.

Case 2 - Setting up a family-owned SARL (restaurant business): Three partners set up an SARL with €15,000 in share capital to open a restaurant. They opt for income tax (IR) over 5 years since it is a family-owned SARL. Articles of association are drafted with a reinforced approval clause. Total registration cost: around €230 (JAL + INPI).

Case 3 - Startup as an SAS raising funds: A tech startup chooses the SAS structure in order to bring in investors. Custom articles of association with preferred shares, BSPCE stock options for employees, and a detailed shareholders' agreement. Initial capital of €10,000 with liquidation preference clauses.

Legal compliance and references

Business creation falls within a dense legal framework. The French Commercial Code (articles L. 123-1 to L. 123-11) governs registration and the RCS. The Code civil (articles 1832 to 1844-17) regulates the company contract. Directive (EU) 2019/1151 on the use of digital tools has accelerated digitization. For regulated professions, the lawyers' code of ethics (decree no. 2005-790) imposes specific obligations, particularly regarding professional confidentiality (article 226-13 of the French Penal Code). ISO 9001 standards may be used to structure the quality of internal legal services.

Frequently asked questions

From what point does the company legally exist?

From its registration, not from the signing of the articles of association. Commitments made before that date are made in the name of the company being formed, and they must be expressly ratified by the company once it is registered. Failing such ratification, the founder who signed — a lease, a supplier contract, a subscription — remains personally and permanently liable for it.

Is a minimum share capital required?

No amount is required for the most common legal forms: one euro is legally sufficient. But a symbolic share capital has two concrete effects — financial partners take it into account, and a clear inadequacy in relation to the planned activity can be held against the director if the company proves unable to meet its commitments. The legal minimum is not the reasonable minimum.

Can the articles of association be signed electronically?

Yes, and the filing is done in digital form. One exception remains: when a contribution involves real estate, the deed must be executed in notarized form. The key point of caution concerns not so much the signature as the retention — the articles of association may be requested throughout the company's entire lifetime, and the signed version must remain verifiable years later.

Is the director's personal assets protected?

In principle, yes, in a capital company, but three common exceptions exist: a personal guarantee required by a bank or landlord, mismanagement that contributed 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.

Can the legal form be changed later on?

Yes, through conversion, without creating a new legal entity — the company retains its identity, its contracts, and its seniority. That said, the consequences are not neutral: the director's social security regime, taxation, and majority voting rules. Anticipating likely changes as early as the initial drafting of the articles of association costs far less than modifying them under pressure later on.

Conclusion

Setting up a business requires a methodical approach combining a strategic choice of legal form, precise drafting of the articles of association, and scrupulous compliance with registration formalities. Digitization via the single window has simplified the procedures, but tax and social complexity remains. Support from a business lawyer or accountant remains a worthwhile investment to secure the project. Anticipate future developments of your structure (fundraising, growth, sale) as early as the initial drafting of the articles of association to avoid costly restructuring later on.