When a company is set up, it declares its registered office address. This determines the nationality of the company and the law to which it is subject, as well as being its administrative, legal and tax center.
As a company grows, it is likely to open other establishments across France, or even around the world, to extend its business into new territories. In most cases, these establishments will be considered as secondary establishments, requiring certain formalities to be carried out.
According to article R.123-40 of the French Commercial Code,"a secondary establishment is a permanent establishment, distinct from the registered office or the main establishment and managed (...) by a person with the power to enter into legal relationships with third parties".
First and foremost, a principal place of business is defined as the place where the company's commercial operations are carried out. In most cases, the principal place of business is the same as the registered office, but this is not always the case. In fact, it may be located at a different address, whether or not in the same jurisdiction as the company's registered office.
An establishment is therefore said to be secondary if you open a permanent establishment in France, located in a jurisdiction other than that of the registered office or principal place of business, and whatever its name (branch, boutique, store, agency, office...). On the other hand, if you open a new establishment in the same jurisdiction as the registered office or principal place of business, but at a separate address, it is considered a supplementary rather than a secondary establishment.
Please note: if you open a secondary establishment abroad, you do not need to complete any special formalities in France.
The opening of a secondary establishment entails a secondary registration for the company, separate from that of the registered office.
This application for registration of the secondary establishment in the Trade and Companies Register (RCS) must be made to the clerk of the Commercial Court in the area where the new establishment is located, within one month before or after its opening.
The head of the company or new establishment then registers the new secondary establishment with the local registry. The"secondary" registry then notifies the"main" registry that an establishment has been opened within its jurisdiction.
The procedure for registering a secondary establishment remains simple
All you need to do is fill in an M2 declaration form, provide supporting documents (including an Extrait Kbis and an original power of attorney from the legal representative if he or she has not signed the M2) and pay a fee of €114.12 (indicative rate from the Clerk's Office of the Paris Commercial Court).
Please note: the opening of a supplementary establishment, i.e. a new establishment in the same jurisdiction as the head office or main establishment, will also require registration in the RCS of this establishment. The procedure will be the same as for a secondary establishment, but at a lower cost of €71.11, according to the Paris Commercial Court Registry.
Finally, if you fail to register a secondary establishment, you risk up to 3 years' imprisonment and a €45,000 fine, as recalled by the Criminal Division of the Court of Cassation in a ruling dated March 28, 2017 (n°16.81-944).
Now that you know all about secondary establishments, don't forget to register them!
Written by our expert Maxime Ravier
October 4, 2017
