An SCI (Société Civile Immobilière) is a company contract by which several people decide to pool one or more properties in order to share the profits or take advantage of any savings that may result. It offers a number of advantages.
The partners of an SCI share in its profits, but also undertake to contribute to losses vis-à-vis creditors.
An SCI is a legal entity with its own legal identity. There are many different types of SCI, but their object is exclusively real estate. However, SCI partners often decide to part company for a variety of reasons.
It is therefore appropriate to proceed with its dissolution and liquidation.
Depending on the particular case, this type of procedure can present a number of specificities that need to be mastered in order to bring the operation to a successful conclusion, in accordance with the rules laid down by law.
The law identifies 8 official grounds for dissolution of an SCI (article 1844-7 of the French Civil Code).
One of them must be invoked to justify your will
A distinction is therefore made between :
-
Early dissolution at the discretion of the partners. This decision must be formalized at a general meeting. Partners have the right to dissolve an SCI at any time.
-
Achievement of the corporate purpose. If the purpose for which the company was created has been achieved, then it no longer has any reason to exist and is dissolved.
-
The expiry of the period for which the company was incorporated. Each SCI is created for a period of 99 years, renewable by a vote of the shareholders at the AGM at the end of the period. If the vote does not result in renewal, the company is automatically dissolved.
-
A judge's decision to dissolve the company if a partner hinders the company's activities, in the event of total paralysis of the company's operations, etc.
-
In the event of major economic difficulties. If the SCI is no longer able to honor its debts or function properly, a judge may order its dissolution.
-
Cancellation of the partnership contract if the partners repeatedly break the law. In this case, the contract binding the partners is invalid, and the partnership does not respect the reasons for which it originally existed.
-
Legal dissolution if the company no longer has enough partners. A company must have at least 2 partners. If one of them dies (without descendants), all the assets are in the hands of a single partner. The law gives the partner one year to find a new partner. Otherwise, the SCI will be dissolved.
-
Any other reason provided for in the company's articles of association (e.g. if the company's results show a deficit for several years, if the number of assets to be managed proves insufficient, etc.).
To successfully dissolve an SCI, it is essential to follow a number of essential steps.
The decision must be formalized by the signing of a procès-verbal of dissolution at a general meeting.
The SCI appoints a liquidator, who must notify the commercial court clerk's office. Finally, it must submit its closed accounts to this same body in order to obtain an effective deletion of the SCI from the Trade and Companies Register (RCS).
These 3 steps are essential to ensure compliance with the law at all times.
The liquidation of the SCI takes place after the company's closing accounts have been drawn up.
If there is a surplus (known as a liquidation bonus), it is distributed among the partners on a pro rata basis according to the number of shares held. The State levies a 2.5% tax on this transaction.
Otherwise, if losses are incurred (known as liquidation losses), the partners are obliged to repay their debts. As their liability is unlimited, their personal assets may be involved. Once again, each partner assumes his or her share of the debt, calculated pro rata to the shares he or she holds in the SCI's capital.
The dissolution and liquidation of an SCI is not a complex procedure, provided you know how to proceed.
Be rigorous and follow each step carefully to avoid breaking the law.
Written by our expert Paul LASBARRERES-CANDAU
November 5, 2018
