Setting up a company involves a number of steps, including submitting your complete file to the Registrar of the Commercial Court.
For your application to be accepted, it must include a document of great importance: your company's articles of association.
This is a written legal document, either under private seal or notarized, which sets out the organization and operation of the company.
However, the drafting rules differ depending on the legal status of your company: SARL, SAS, EURL and SASU do not obey the same imperatives. Also, the complexity of the company to be created and the multiplication of clauses to be included can greatly complicate the task.
Explanations
Bylaws are to a company what the Constitution is to the State: they contain all the rules governing its day-to-day operation, organization and decision-making procedures.
The articles of association must be drawn up in writing, and it is on the basis of their existence that the company's legal status is established.
An ill-defined or incomplete clause could have consequences for the future of the company, and could potentially be exploited as a loophole by certain partners.
The main topics covered by the bylaws include the appointment of directors, approval clauses for salesor purchases of shares, the option of tax treatment (IR or IS ), and the social security system to which directors are subject.
You can entrust them to a professional, or write them yourself.
However, it only takes one imprecise reference to a clause for uncertainty to arise in the event of a dispute.
The articles of association contain compulsory information, and optional information on a case-by-case basis.
In the first case, the compulsory information is :
- Company name: this includes all the basic information needed to identify your company (company name, SIRET and SIREN numbers, identification of the director, etc.).
- The registered office address: this is a particularly important element, designating the company's official address for determining nationality, country of taxation or jurisdiction in the event of a dispute. It may be located at the director's home, in a business premises or in a domiciliation company.
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Your legal status needs to be carefully chosen. It needs to be carefully chosen according to your project and your objectives in terms of taxation, assets, transfer of ownership, etc.
- The amount of share capital
- Cash, in-kind or industrial contributions made by shareholders/partners.
- The life of the company, limited to 99 years.
Among the additional mentions, we can distinguish :
- Methods of appointing managers (majority required for appointment, etc.).
- Decision-making procedures, type of decision requiring the agreement of all associates
- Terms and conditions for transferring shares
- Procedure in the event of liquidation of the company
Lastly, one or more shareholders' agreements may be added to the above provisions.
Associates sometimes decide to draw up a set of internal rules to guarantee ethical and moral conduct.
They remain confidential and are not subject to any publicity obligation.
Company bylaws are not set in stone
They may be amended by decision of the associates at an Extraordinary General Meeting, in accordance with the majority stipulated in the bylaws.
It is possible to modify any information concerning the company, such as its registered office or the amount of its share capital, for example.
Other provisions, such as a change in the company's corporate purpose, sometimes require the company to be dissolved and a new one created.
The modification must be filed with the clerk's office of the commercial court within one month of the decision taken by the general meeting.
Your company's articles of association are of vital importance for its smooth operation, to avoid disputes between partners and to ensure its long-term survival. A company founded on unstable legal foundations cannot prosper properly, and will sooner or later be confronted with harmful legal ambiguities.
Written by our expert Paul LASBARRERES-CANDAU
March 26, 2019
