Finding the type of SCI that best suits your project can sometimes be harder than you think... That's why SeDomicilier.fr is here to give you an overview of the possibilities!
There are many possible forms for an SCI, and this article will help you discover them easily and in a few words.
First of all, we need to define SCI
SCI definition: The Société Civile Immobilière (SCI) is a non-trading company with a real-estate object, formed by a minimum of two people. The SCI is in fact the best legal tool currently available for purchasing and managing real estate.
In fact, the purpose of creating an SCI is to ensure that co-owners of a property do not have to deal with problems of indivision. The SCI is a legal entity created by the union of at least two natural persons who are partners.
In this way, it is the company, divided into shares among the associates, that owns the real estate and not an individual.
This type of ingenious legal arrangement has therefore rapidly won its spurs today.
However, the SCI is never used for commercial purposes, and this is prohibited by law. It is therefore theoretically impossible to buy real estate and then resell it through an SCI.
When setting up an SCI, you have two choices
You can choose whether your company has fixed or variable capital.
If the SCI is a fixed-capital company, the amount of share capital decided at the company's inception is stated directly in the articles of association. Consequently, any change to this initial share capital, to the distribution of shares between associates, or to the group of associates itself, requires a meeting of the general meeting and the publication of a legal announcement. It will then be necessary to draw up new articles of association and have them recognized by the Registrar of the Commercial Court and the tax authorities.
The security that this type of non-trading property company provides for its partners is highly appreciated, and it's hardly surprising that it's currently the most widespread. However, it should be noted that freeing up the capital of an SCI, and thus transforming it into an SCI with variable capital, also offers significant advantages.
For example, the adoption of variable capital will avoid all the administrative formalities required in the case of the changes mentioned above. This is because the articles of association of such a company are drafted in such a way as to provide for a minimum and a maximum capital threshold. So, for example, changing the breakdown of capital will not require a revision of the articles of association.
What's more, in an SCI with variable capital, the names of the partners do not appear in the articles of association. This means they remain anonymous, unlike the partners of a fixed-capital SCI.
Finally, the variable-capital SCI is taxed less on its profits than the fixed-capital SCI. Since the capital is paid up at the time of contribution, the profits (on the portion below 38,120 euros) of the SCI with variable capital are taxed at a rate of 15%, whereas those of the SCI with fixed capital are taxed at 33.3%.
In practice, SCIs can take many different forms, and choosing the type of capital is not the only thing you'll have to do when setting up your company.
The SCI de location, as its name suggests, is created between different partners wishing to manage a property and rent it out.
Like all SCIs, it avoids joint ownership problems, as the rents or income from the business are divided between partners according to the number of shares they own.
What's more, it in no way implies giving up certain legislative advantages that are theoretically reserved for private individuals, such as the Robien scheme.
Within a family context, the SCI can be used to transfer real estate.
In fact, passing on shares in a company is more advantageous from a tax point of view than passing on a property directly.
In this case, the SCI allows for a degree of tax optimization.
The SCI de jouissance à temps partagé is based on the idea of "Time Share".
In other words, each partner is entitled to a period of occupancy of the SCI property calculated on the basis of the shares he or she owns.
This arrangement is often used for second homes in particular.
The purpose of an SCI d'attribution is to build or acquire a property, the division of which is already provided for in the articles of association, according to the shares held by each partner. Once the property has been built/acquired, the company will be dissolved.
The SCI de construction-vente is an exception to the rule. Since its activity consists of building a property with a view to reselling it, it is similar to that of a developer, and therefore a commercial activity.
This type of SCI, like the SCI d'attribution, is generally dissolved once the intended purpose has been achieved.
Creating an SCI means creating your own formula!
Written by our expert Audrey Nouvel
August 31, 2017
