The legal forms make it possible to classify the different companies. This classification is made according to 9 levels defining the large families of legal forms, subdivided into 45 levels defining legal categories in relation to the fundamental legal criteria of the law, themselves subdivided into 268 levels allowing the legal category to be specified taking into account the specificity of the legal provisions concerning the units concerned.

The first 9 levels are :

  • Sole proprietor
  • Private law grouping without legal personality
  • Legal person under foreign law
  • Legal person governed by public law subject to commercial law
  • Commercial company
  • Other legal entity registered with the SCR
  • Legal person and body subject to administrative law
  • Specialized private organization
  • Private law grouping

Definition of levels and some of the most common legal forms

  • Sole proprietor : A sole proprietor manages a business alone, which has no legal entity, although it is sometimes listed in the trade directory (for craftsmen) or the RCS (for traders and industrialists). It is not necessarily a business that has no employees.

  • Artisan-merchant: groups together companies whose activity is charcuterie, bakery, bakery-pastry, pastry, baking of bakery products.

  • Craftsman: According to the law of 5 July 1996 on the development and promotion of trade and crafts, "natural persons and legal entities employing no more than 10 employees and carrying on an independent professional activity as a main or secondary occupation in the production, processing, repair or provision of services relating to crafts and appearing on a list drawn up by decree in the Council of State must be registered in the register of trades". Under certain conditions, companies wishing to do so may remain registered in the register of trades above the threshold of 10 employees (known as "droit de suite"). Only persons with the required qualification can claim the status of craftsman or master craftsman from their customers. The number of craft enterprises does not coincide with the number of craftsmen, as several craftsmen may be associated within the same enterprise.

  • Trader : In French law, a trader is a natural or legal person who carries out acts of commerce and makes it his usual profession.

  • Liberal profession : A liberal profession is any profession exercised on the basis of appropriate qualifications, in a personal capacity, under its own responsibility and in a professionally independent manner, offering intellectual (lawyer, doctor,...) and conceptual services in the interest of the client and the public.

  • Farm Operator : A farm operator is a person who is responsible for making management decisions for a farm operation. This can be the owner or tenant of the operation, or a committed manager, including those who are responsible for making management decisions about certain aspects of the operation - seeding, harvesting, raising livestock, marketing and sales, and the purchase of capital assets and other financial matters.
    • Managing Partner of the Partnership: Partner in a venture capital management company who has unlimited personal liability for the debts and commitments of the limited partnership and has the right to participate in its management
    • Private law grouping without legal personality
    • Indivision between natural persons: Properly managed jointly by at least two persons holding shares in the company, one of whom may not transfer his shares without the agreement of at least 66% of the other holders. In this case, the transfer of the share of the applicant will therefore be submitted to a judge who will take the decision.cIn general, this legal form is used in the case of a succession.
    • De facto created company: the de facto created company is a situation in which people act as if they were associated without being fully aware of it and without having agreed to it in a solemn act. This is what jurisprudence calls the appearance theory. De facto partnerships are common in family situations. It exists, therefore, only if two or more persons establish that they intended to join together for the purpose of a joint venture by making contributions and agreeing that each of them will share in the profits and contribute to the losses of the business. The rights and powers of a de facto company are limited compared to a de jure company. 

The de facto corporation cannot participate in the legal life, acquire, sell, borrow, hire personnel or enforce its rights in court.

Partners who have presented themselves to third parties in the name of the partnership are obliged to fulfil the commitments they have entered into.

  • Legal person under foreign law : Foreign company not registered with the RCS: A foreign natural person who wishes to carry out an activity may opt for the status of auto-entrepreneur or create a sole proprietorship or a company. A foreign legal entity wishing to set up a business in France may set up a Liaison Office. Registration with the Trade and Companies Register (RCS) is not mandatory. A declaration of existence may be requested from the Centre for Business Formalities (CFE) of the Chamber of Commerce and Industry, which is however not required to grant this request. The declaration leads to the registration of the liaison office in the National Directory of Enterprises and Establishments, which gives rise to the issue of the SIREN and SIRET identification numbers intended to facilitate its relations with administrations and public bodies. Furthermore, this structure is not subject to the authorization procedure for foreign investments in France, and is not considered as a taxable entity for tax purposes.

In summary: A foreign company not registered with the RCS is a liaison office of a foreign company wishing to work in France without residing there and not carrying out any commercial activity. Represented by an agent or an office manager employed by the foreign company. This type of legal form is tax-free

  • Foreign commercial company registered with the RCS: A foreign company that plans to set up in France to carry out a commercial activity can opt for two types of establishments subject to registration with the RCS:
    • The subsidiary is a genuine company under French law, with legal personality (allowing it to conduct business in its own name), of which more than half of the capital is held by the parent company. It is subject to French regulations regarding possible legal forms and their tax and social consequences, business premises and formalities (registration, etc.) ;
    • The branch manages a business that is distinct from the main establishment through its own installation and material organisation. However, this structure does not have legal personality and therefore does not have patrimonial autonomy. The "agency" is synonymous with "branch", but generally represents an establishment of lesser importance (lighter material structures or limited powers of its management).

A foreign company that sets up a branch or agency must file two certified copies of its articles of association translated into French and, within fifteen days of opening, register it and complete all legal, administrative, tax and social formalities (in the case of hiring employees) incumbent on merchants with the Centre de formalités des entreprises (Business Formalities Centre). The manager of the branch is usually an employee of the foreign company, but may also be an agent.

The subsidiary and the branch have tax status and will be treated as French companies, subject to corporate income tax. A convention signed by France and the home state of the parent company may adjust the tax regime in order to avoid double taxation of profits.

When hiring employees, the head of the representative or liaison office, subsidiary or branch must comply with all the formalities incumbent on employers.

In summary: A foreign commercial company registered with the RCS is a branch or subsidiary of a foreign company wishing to work in France with residence and carrying on a commercial activity. Represented by an agent or salaried office manager of the foreign company. This type of legal form is taxable.

  • Legal person governed by public law subject to commercial law :A public establishment of an industrial and commercial nature (or EPIC) is a legal person governed by public law whose purpose is the management of a public service activity. The activity of the establishment is limited to the public service that it is responsible for managing (decision of the Council of State of 19 June 1961). Thus, it may not use its property and assets for other activities, unless they contribute, even indirectly, to the public service entrusted to it. Similarly, it may only accept donations corresponding to its mission.
    • Some examples of structures :
      • National Audiovisual Institute: INA
      • National Consumer Institute: INC
      • Régie Autonome des transports parisiens : RATP
      • The Union des groupements d'achats publics : UGAP
      • Société nationale des chemins de fer français: composed of three EPICs: SNCF, SNCF Mobilités and SNCF Réseau…
  • Commercial company

    A company is commercial by its form (legal form) and its object (the activity of the company).

    This is the level with the most legal forms, divided into 7 sub-categories:

    Special Business Cooperative Society (SCOP):

    Under French law, a Scop is a commercial company incorporated as a public limited company, limited liability company or simplified joint stock company, which differs from traditional companies in that the majority of the capital and decision-making power is held by the employees.

  • General partnership (SNC) :  The SNC is a commercial company. It is relatively uncommon, a victim of the success of the SARL and the SA, but it has certain advantages:
    • the partners are very effectively protected against any acquisition of a third party's shareholding: transfers of shares require the unanimous agreement of the partners.
    • it is used to build complex legal arrangements by groups of companies wishing to form a holding company
    • it makes it possible to attract creditors because that form of company is very protective of their interests: SNC's shareholders are liable indefinitely and jointly and severally for the company's debts [...].
    • it is the only commercial company under French law that is not subject to publication of its accounts regardless of the amount of its turnover or profits (unless all partners are legal entities); it is therefore appreciated by those seeking a certain degree of discretion.

Legal form: SNC and SNCC (Société en nom collectif coopérative) ...

  • Limited liability company (SARL) :

A limited liability company (SARL) is a commercial company where liability is limited up to the amount of the contributions, and which has the characteristics of a partnership (2 to 100 persons), in particular because the shares held in the capital are not freely accessible without the agreement of all or part of the partners. Nevertheless, there are single-person limited liability companies which operate in the same way as a multi-person limited liability company.

The advantage of the SARL is obviously the limitation of liability: the assets of the partners, and of the manager, are protected. The only condition for the manager's patrimony to be committed is the management fault.

The SARL can be declined in various complementary forms, depending on the activity carried out and the partners concerned, which can bring various advantages from a tax point of view. The most widespread being the classic SARL.

Example of legal form: SARL, SARL Immobilière de gestion, SARL Coopérative artisanale

  • Public limited company 
  • A public limited company (SA) is a capital company, so called because its corporate name does not reveal the names of the shareholders, whose identity it may even be unaware of when the company's securities are in bearer form. Its status partially protects its shareholders in the event of bankruptcy. The joint-stock company can be divided into two branches :
    • Public limited company with a board of directors: The SA is administered by a collegial body called the board of directors, represented by its president. The board of directors is made up of a minimum of three and a maximum of 18 directors chosen from among the shareholders or not.

Example of legal form: national public limited company with a board of directors, public limited company union of cooperative societies with a board of directors, real estate public limited company for trade and industry (SICOMI) with a board of directors ...

  • Public limited company with a management board :

The management board is the body in charge of managing the company, in S.A.'s constituted in the form of a management board and a supervisory board. It is made up of one to five members, who may or may not be partners but must be natural persons. Its members are appointed by the supervisory board for a term of 2 to 6 years. 150,000, the management board may be composed of a single person who will then be the sole managing director.

Example of legal form: SA with a management board, national SA with a management board, SA de crédit immobilier with a management board ...

  • Simplified joint stock company : The SAS is both a capital company, which makes it similar to a public limited company, and a partnership, which makes it a mixed company. It differs above all from the public limited company by the great freedom that is left to the partners. This lightening of constraints, and in particular the fact that the internal functioning of the SAS is essentially defined by the articles of association, i.e. by the will of its members, and not by the law, is indeed at the origin of the creation of the SAS form and makes it a privileged management instrument for large groups, in particular multinationals. The main feature of the SAS is that it makes it possible to dissociate capital from power. In short, a partner can enjoy prerogatives independent of his share of capital.

Example of legal form: SA, SA with sole shareholder ...

  • European Company  : A European Company or European Business, is a company which can operate in all Member States of the European Union under a single legal form common to all those States, as defined by Community law.

Single legal form: European Company

  • Other legal entity registered with the SCR : This category mainly includes civil societies and agricultural SCOPs.

  • Civil Company : Civil company is "the area of organised civil social life that is voluntary, largely self-sufficient and autonomous from the State". Civil company includes all non-governmental and non-profit-making associations. It is therefore the self-organisation of company, outside any administrative or commercial institutional framework.

Example of legal form: Mutual insurance company, Caisse d'Épargne et de Prévoyance, Economic Interest Grouping (GIE), SCP de médecins, Société civile immobilière (SCI)...

  • Agricultural Cooperative Company : An agricultural cooperative society is a cooperative enterprise with sui generis status, i.e. it is neither civil nor commercial. It is set up by farmers in order to provide joint insurance: the use of tools for the production, packaging, storage, marketing or processing of the products of their farms; their supply of fertilizers and other inputs.

Example of legal form: Agricultural Cooperative Society, Cooperative for the Joint Use of Agricultural Equipment (CUMA).

  • Legal person and body subject to administrative law : This category mainly represents public institutions, state administration and local authorities.

Example of legal form: Constitutional authority, Ministry, Commune and new commune, Collectivité et territoire d'Outre-Mer, Établissement public local d'enseignement, Groupement d'intérêt public (GIP), Établissement d'hospitalisation, Communauté de communes ...

  • Specialized private organization : This category includes social protection schemes with compulsory membership (Social Security, Supplementary Pension Scheme, Unemployment Insurance Scheme, etc.), mutual benefit organisations, works councils, professional organisations and pension organisations with non-compulsory membership (provident institutions, etc.).

  • Private law grouping : This category represents owners' associations, associations under the law of 1901 and similar (registered associations, employer groups, etc.), foundations and other legal entities under private law.