What does the law say about company domiciliation?
In France, an entrepreneur wishing to domicile his company has four possibilities or options in accordance with the rules of the Commercial Code. Firstly, you can set up your company's registered office in your own home. This must, however, be permitted by your rental agreement. Similarly, you will need to obtain the authorization of the union council if the property is governed by condominium regulations. Domiciliation is limited to a maximum of 5 years.
Apart from this option, the French Commercial Code also allows you to domicile your company in a business incubator. Another option is to lease commercial or professional premises as your company's headquarters. You must, however, ensure that the property is intended for commercial or professional use. A lease contract must then be signed on behalf of the company if it is a tenant.
You can also domicile your company with a domiciliation company.
A domiciliation contract for a minimum of 3 months must be signed and attached to the company's registration file, in compliance with the French Commercial Code. Use SeDomicilier to obtain a prestigious address for your company's domiciliation.
Domiciliations that do not comply with the law or the French Commercial Code can take a number of different forms. In general, the person setting up the company declares a fictitious registered office to ensure that the company benefits from certain tax or social security advantages.
This may involve using a completely fictitious postal address, renting a company box, or providing the address of a relative's premises or place of residence. Whatever form it takes, false domiciliation should be avoided for the sake of the company, the person running it and the tax and social security system.
False domiciliation: the consequences of this practice contrary to the French Commercial Code
If you don't respect the rules of the French Commercial Code during the domiciliation procedure, you damage the company's image. You also expose the company to a wide range of legal and tax penalties.
Legal and tax implications
From a legal standpoint, the consequences of a domiciliation that does not comply with the law can be varied and far-reaching. False domiciliation is considered a criminal offence. The offender is liable to up to 3 years' imprisonment and a fine of up to 45,000 euros.
Companies whose registered office has been incorrectly declared may be struck off the commercial register. The tax authorities may also impose a tax reassessment. In this case, your company faces substantial financial penalties.
Consequences for the company's image
If a domiciliation does not comply with the law, customers, partners and investors lose confidence in the company and its management. They perceive this practice, which is contrary to the French Commercial Code, as an attempt at fraud or deception.
It can also create a feeling of legal and fiscal insecurity among stakeholders, thereby damaging commercial and financial relations with your company.
The consequences of not registering your company in accordance with the law can be crippling. You need to make the right decisions and choose the right people to define your company's registered office. With SeDomicilier, you're sure to have a good domiciliation address that complies with the French Commercial Code.
Written by our editorial expert
August 2, 2023
