What is an SCI?

The corporate purpose of an SCI is to acquire and manage real estate assets.

A definition of SCI

A société civile immobilière (SCI) is a legal entity with legal personality. The purpose of an SCI is to achieve objectives related to the management of real estate assets.

Setting up an SCI requires a minimum of two partners. There is no maximum limit to the number of partners who can join the SCI. Partners may be related, depending on the nature of the SCI.

The SCI offers partners the opportunity to separate their personal assets from those managed by the company. There is one important difference. Unlike commercial companies, partners are liable for the debts of the SCI to the extent of their contributions to the share capital. Should the SCI fail, the partners' assets are exposed and may be called upon to repay the debts.

The difference between a société civile immobilière and a société commerciale

A société civile immobilière is not a commercial company. It cannot carry on a commercial activity. It cannot specialize in the purchase and resale of real estate. The activities of property dealers are prohibited.

The SCI is not to be confused with the SCPI, or société civile de placement immobilier. The essence of an SCPI is to collect money from investors with the aim of acquiring and managing real estate assets for rental. The investor's management style is more passive than that of an SCI.

Liability of SCI partners and managers

In its articles of association, the SCI specifies how the manager is to be selected. The manager's duties are as follows:

  • be the legal representative of the SCI ;
  • manage accounting ;
  • tax management ;
  • sign contracts for leases, purchases, services, etc;
  • acting as an intermediary with tenants, etc.

In most cases, the manager is appointed by the partners at an ordinary or extraordinary general meeting.

Partners are indefinitely liable for the debts of the non-trading property company. In the event of default, they share in the SCI's debts to the extent of their personal contributions.

What are the different types of SCI?

An SCI can take several forms:

Why is it important to choose the right type of SCI?

The content of the articles of association is likely to vary according to the type of SCI. The articles of association set out the internal operating rules of the non-trading property company. They specify the company's corporate purpose. Before setting up an SCI, it's essential to choose the right type for your property management project.

Study the different types of SCI carefully to find out whether they are compatible with your objectives. It's important to ask yourself the right questions: Do you need to exempt your descendants from inheritance tax? Do you simply want to manage a property portfolio as a family, or rent out the property to several partners? Are you looking for rental income or a second home for your vacations?

How to set up an SCI?

Setting up an SCI requires you to follow precise procedures. SeDomicilier can help you with your plans, thanks to dedicated experts.

Drafting the SCI's articles of association

The drafting the articles of association is an essential and fundamental step in the creation of a non-trading property company (société civile immobilière). They specify how the SCI will operate. You can draw up the articles of association yourself, or enlist the help of the experts at SeDomicilier.

The articles of association contain the essential elements for the operation of your SCI:

  • legal status;
  • corporate purpose ;
  • company name ;
  • registered office address ;
  • the amount of share capital ;
  • the length of the SCI's existence;
  • the identity of the founding partners and the value of their contributions;
  • how shares are distributed ;
  • subscription conditions for shares ;
  • the conditions for appointing the SCI manager.

A lawyer is qualified to help you draw up these articles of association. Take advantage of SeDomicilier's expert legal advice.

    Create an SCI online
 

Publication of a notice of incorporation in a legal gazette

It is essential to publish a notice of incorporation in a legal gazette. Your notice must contain the following information:

  • the corporate name of the SCI ;
  • corporate purpose ;
  • registered office address ;
  • the amount of share capital ;
  • the length of the SCI's existence;
  • information about the manager.

Deposit of the SCI's share capital

The partners of an SCI must deposit the share capital with a bank. The bank holds the funds in a blocked account until the company is registered. Alternatively, you can call on the expertise of a notary.

SCI registration

Theregistration of a société civile immobilière is carried out at the Institut national de la propriété industrielle (INPI), via the Guichet unique. The latter centralizes all requests for the creation of companies or sole proprietorships.

Domiciliation of an SCI's head office

An SCI must domicile its registered office at a specific address. The manager's home is often the preferred choice. However, disadvantages may arise in terms of privacy and confidentiality.

A domiciliation company offers a number of advantages for domiciling your SCI's head office:

  • Mail management: reception, scanning, forwarding.
  • Physical and telephone reception.
  • Legal and accounting advice.
  • Rental of coworking spaces or serviced offices.
  • Rental of meeting rooms with audiovisual equipment.
  • Internet connection, printers, etc.

SeDomicilier offers addresses in prestigious neighborhoods in Paris and other major French cities.

What are the advantages of SCI?

The SCI offers a number of advantages in terms of taxation and the transfer of assets.

What is the tax regime for an SCI?

The choice between income tax and corporation tax

A société civile immobilière (SCI) is subject toincome tax (IR) by default. Partners may opt for corporate income tax (IS). Opting for income tax simplifies your accounting. There's no need to call on the services of a chartered accountant.

Corporate income tax offers the advantage of depreciating property to reduce taxable income. SCI partners can deduct expenses such as management fees and notary fees.

The micro-foncier system

If your annual income is less than €15,000, you can opt for the micro-foncier system.

To be eligible, you must be a homeowner:

  • an income-generating property with taxation linked to a specific tax regime: Sellier, Borloo, Pinel, etc;
  • a property rented under an ANAH agreement;
  • of a bare-owner property;
  • a building located on a site classified as a remarkable heritage site;
  • a historic monument.

If you are making a rental investment, the micro-foncier scheme applies to the following bare rentals: houses, apartments, cellars, parking lots, land and business premises. Under the micro-foncier scheme, SCI owners benefit from a flat-rate deduction of 30%.

Actual regime

The régime réel is the second option for taxing property income. It applies when the taxpayer's gross annual property income exceeds €15,000. The "régime réel" (real estate tax regime) gives the right to use the "déficit foncier" (property deficit) in the event of a precarious situation for the SCI.

Deductible SCI expenses

Tooptimize the profitability of your SCIinvestment, you can deduct certain expenses.

To deduct your expenses, it's essential to keep receipts for payments relating to deductible expenses. They must be produced in the event of a tax audit.

Take advantage of SeDomicilier's expertise to avoid disputes with the public administration:

  • differentiate between rental expenses and deductible expenses;
  • comply with applicable legal requirements;
  • keep your receipts for a specific period of time.

Passing on your real estate assets under a non-trading property company (SCI)

The transmission of life

The non-trading property company (SCI) is a highly advantageous legal status when it comes to passing on assets. Your shares can be passed on to your children tax-free, as long as you meet the €100,000 threshold every 15 years. No gift tax applies.

Passing on after death

In the event of death, the heirs receiving the shares must pay inheritance tax. These are calculated on the basis of assets, after taking into account debts at the time of death.

Inheritance tax is applied on the basis of the income tax scale:

To limit the tax impact of inheritance, parents or grandparents can transfer shares gradually.

 

The exemption from transfer duties applies according to the degree of kinship at the time of the donation:

 

The SCI offers a number of advantages for people wishing to manage a property as a family or in a specific context (vacation home, rental investment, agricultural development, etc.). The société civile immobilière offers real flexibility in terms of management. It is also ideal for transferring property assets.