SCI d'attribution: everything you need to know

A Société Civile Immobilière (SCI) (Real Estate Civil Company) is designed for buying and managing a portfolio of real estate assets with multiple people. Popular among many French investors and families, it has several significant advantages: flexible management, real ease in securely transferring your assets, adaptable governance, etc.

There are several types of SCI: standard, family, etc. The Real Estate Civil Company of Attribution is one of them. Indeed, it contributes to the same objectives, but has its own particularities.

Let's explore this legal status that's highly valued by many French people.

What is an attribution SCI?

The mission of an 'SCI d’attribution' is to acquire or construct one or more properties to generate income and resell them.

Once the company has been formed, the partners can benefit from the real estate acquired in three ways:

• Full ownership: Ownership is shared between the different partners in the SCI, based on the number of shares each person holds.
• In usufruct: we distinguish between the partner who has the right to enjoy the asset (such as living in it or renting it out) and the one who owns it.
• In bare ownership: the person owns the property but cannot enjoy it.

Intuitively, you need to have at least 2 partners to create an SCI. You don't have to allocate share capital when you create it. However, you do need to invest enough money to buy or build one or more properties.

How to manage an attribution SCI?

Real estate companies (SCI) benefit from relatively flexible governance rules. The partners who own its capital meet at least once a year in a General Meeting.

All the items on the agenda are discussed and put to a vote by the partners.

Everyone has a voting right, the importance of which is weighted according to the number of shares they hold in the SCI's capital. It is possible to modify this rule (except for a leonine clause) by drawing up an amendment to the SCI's articles of association.

An SCI must have at least one manager, who does not necessarily have to be a partner. They represent the company to the relevant authorities and can commit it to third parties. The extent of their powers is defined in the company's articles of association.

What is the applicable tax system for an SCI d'attribution?

Real estate companies (SCI) are taxed under the income tax (IR) system. In other words, the partners are taxed on the income tax on the profits generated, based on their marginal tax bracket.

The taxable amount attributable to each partner is determined based on the number of shares they hold in the SCI's capital.

How to create an attribution SCI?

The first step is to draft the articles of association, choose the registered office and gather the capital contributions of the company.

The following information must appear in your articles of association:

• The legal structure, in this case a SCI (Société Civile Immobilière)
• The company's purpose
• The company name
• Head office address
• The amount of capital contributions (in cash, in kind or in industry)
• The lifespan of the SCI, which is 99 renewable years

The registered office of the SCI corresponds to its place of residence. It must be mentioned on all official documents emanating from the company. There are various options when it comes to choosing the address of the registered office: at the manager's home, in commercial premises, or via a domiciliation company.

Next, you need to publish a notice of formation of the SCI in an approved legal announcement journal. Without the publication notice in a legal announcement journal, you won't be able to register the SCI.

The final step is registering your company by submitting your incorporation documents to the relevant CFE (Centre de Formalités des Entreprises - Business Formalities Center). Here's a list of the documents to provide:

• The M0 form for civil society, which corresponds to the declaration of incorporation, duly completed and signed.
• A copy of the articles of association signed and certified by all the partners
• Proof of publication in a legal announcement newspaper
• Proof of identity for partners and moral and physical managers

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