What is a family SCI?
Definition of an SCI
What is an SCI? An SCI is a non-trading property company. This legal structure is made up of a minimum of two people, who are partners in the management of one or more properties. The property is held by the SCI. The partners own shares in the company in proportion to their contributions.
The partners of an SCI appoint a manager whose role is to ensure the day-to-day management of the property. The manager's powers of management are tightly circumscribed, but give him or her enough autonomy to act without continually seeking the approval of the partners.
An SCI has its own articles of association that define how it operates. The drafting the articles of association is essential to establish the decision-making framework: majority or unanimous decision of the partners. The purpose of the SCI is also clearly identified: to generate profits or not.
- The purpose of a non-profitable SCI is to manage one or more properties jointly. The partners thus avoid the rules of joint ownership.
- A non-trading property company (SCI) that generates profits is more likely to manage the rental of property and the resulting income.
The characteristics of an SCI can be summarized as follows:
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Corporate purpose: The corporate purpose of an SCI is freely chosen by the partners. If it is of a commercial nature, it may involve renting out housing or purchasing real estate for resale.
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Registered office : Le registered office may be at the domicile of the designated manager, or at any other location identified in the articles of association.
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Share capital: The amount of share capital is set out in the bylaws.
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Partners: SCI requires a minimum of two partners. There is no single-person legal form. The status of partner is open to minors and protected adults.
An SCI between spouses or a family SCI
The details of a family SCI differ somewhat from those of a traditional SCI. Whether it's an SCI between spouses, or an SCI between several family members, the rules are the same. This legal form is of interest when members of the same family wish to optimize the management of a common property portfolio. Its operation is limited to the management of a property portfolio, with the option of letting it out. It cannot include buying for resale, as this is a commercial act.
Partners' liability is unlimited. Each partner is liable for the company's liabilities in proportion to his or her share in the SCI's share capital. This means that in the event of a default by the family SCI, the partners share the debt on the basis of their shareholdings. If a partner is unable to pay his or her share of the debt, creditors have no recourse against the other partners. SCI for couples depends on the matrimonial property regime and the joint assets acquired by the spouses.
When to set up a family SCI or an SCI between spouses?
There are three conditions for creating a family SCI.
Creating an SCI between cohabitants
A cohabiting couple is subject to joint ownership when acquiring a property. In the event of divorce or the death of one of the cohabitants, the continuity of the property is not guaranteed. In the event of the death of one of the partners, an SCI between spouses allows the surviving partner to inherit the property without having to pay inheritance tax.
Buying real estate as a family
The purchase of a property by members of the same family is an opportunity to create a family SCI. This could be a rental investment, or the purchase of a vacation home. Family members can acquire a principal residence and place its management in an SCI.
Following an inheritance
When a property isinherited, the beneficiaries have the option of setting up a SCI familiale (family non-trading property company), thus abandoning the undivided ownership regime. In terms of taxation and management, the family SCI is more attractive for owners of a family property. The heirs contribute a share of the property to the SCI, and in return receive shares in proportion to this contribution.
The advantages of setting up an SCI between spouses or within a family
For families wishing to bypass the constraints of joint ownership, the SCI familiale is an excellent solution. It offers a number of undeniable advantages, even between spouses.
Easier property management
The SCI between spouses or family gives members of the same family or household the opportunity not to directly manage the real estate assets and their technical aspects, which are entrusted to an appointed manager:
- tax and administrative procedures ;
- housing maintenance and renovation ;
- property management ;
- payment of utilities, etc.
The sole manager, appointed by the SCI family partners, carries out all the tasks associated with running the property. This reduces management conflicts within the family. As in a traditional SCI, the sole manager takes autonomous decisions to manage the property in the interests of the partners. The Articles of Association serve to limit his powers and provide a framework for his actions.
Ensuring a smooth transfer of property assets
The SCI between spouses or within the family offers real tax advantages in terms of wealth transfer. Parents benefit from tax allowances when making successive gifts to their children. Within the framework of a family SCI, donations between parents and children are subject to a tax allowance of 100,000 euros per transaction. Parents can gradually pass on their real estate assets to their children, while benefiting from an advantageous tax allowance. Thanks to the SCI familiale system, owners are exempt from transfer duties.
Easier ownership stripping
With a family SCI, it's easier to dismember the ownership of a property. Parents are able to pass on bare ownership and political rights to their children. What do these two elements mean?
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Nue-propriété is the right of a person to dispose of a property, as opposed to usufruitier, which implies only a right of use.
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Political rights are defined on the basis ofarticle 544 of the French Civil CodeProperty is the right to enjoy and dispose of things in the most absolute manner, provided that they are not used in a way prohibited by law.
Notwithstanding the transfer of political rights and bare ownership, the parents may converse the usufruct of the real estate. All these provisions must be set out in detail in the articles of association of the family SCI.
Guaranteeing the longevity of your property
An SCI between spouses or within a family allows you to preserve the integrity of your real estate assets over several generations. The SCI system rules out the forced sale of the property, which remains in joint ownership. A partner cannot force the other partners to sell the property. If a partner wishes to leave the family SCI, he or she can sell his or her shares to other partners or family members.
Written by our expert Editorial staff
April 16, 2024
