All you need to know about the family SCI

A Société Civile Immobilière (non-trading property company) is a group of people who come together to buy a property and make a profit from it.

It has its own registered office, a minimum capital, requires at least two individuals or legal entities to set it up, and its operation is defined in its articles of association.

There is a wide range of SCI types to suit all your projects. For example, a rental SCI enables you to rent out a property and manage it, while avoiding the problems generated by joint ownership.

SCI de jouissance à temps partagé allows the time during which each partner can live in a property to be divided pro rata to his or her capital contribution to the company, although the risk of disputes between partners is high.

Finally, there is the SCI de construction-vente, or the SCI d'attribution, which are additional forms to choose from according to your needs.

The family real estate investment company (SCI familiale)optimizes the management and transfer of property within the family circle.

It enables several members of the same family to share the ownership of a property through a company, up to the amount of their share.

This makes it possible to optimize taxation at the time of transfer to heirs.

This is just one of the many advantages offered by the SCI familiale.

Why set up a family SCI?

In addition to enabling several members of the same family to purchase a property and share ownership, the SCI familiale also makes property management much simpler and more transparent.

The company's bylaws must specify the appointment of one or more managing directors.

This mode of operation often avoids many quarrels between members of the same family, since important decisions must be debated and voted on at the general meeting by the majority set down in the articles of association.

How do you set up a family SCI?

The first step is to build a solid project between the future partners. The next step is to find a competent person to draw up the articles of association for the SCI.

They can be complex to draw up, so it's advisable to consult a professional.

The articles of association must include the following information:

• The number ofpartners at the time of creation (minimum two);
• Registered office address;
• Life of the company (99 years maximum) ;
• The family ties uniting each partner ;
• Contributed capital (no minimum capital requirement).

Once you have drafted your decision, it is up to you to publish it in an approved legal gazette.

This will enable you to file your complete application with the Centre des Formalités des Entreprises or the Greffe du Tribunal de Commerce. The Greffe du Tribunal de Commerce will provide you with a Kbis extract certifying your company's legal existence.

What are the advantages of this type of company?

The appointment of a manager to administer the property is certainly one of the most important advantages, as the partners are not obliged to do this themselves. Although the most important decisions are taken by the partners at a general meeting, it is the manager who manages the property on a day-to-day basis.

Above all, this legal form allows you to optimize your assets at the time of transfer.

With a family real estate investment company (SCI familiale), you don't have to divide your assets, which remain in their entirety within the company.

This ensures that all assets are retained in the event of the death of one of the partners.

What are the partners' obligations?

Each partner is indefinitely liable for the company's debts, regardless of the amount of their share.

Their liability is not limited to their contributions to the company, and their personal assets can be used directly to recover the SCI's debts.

This reinforces the need to use a trusted manager, as a failure to manage the business can have serious consequences.

Nevertheless, it is possible toadapt the liability of associates in the Articles of Association, by allocating losses without necessarily corresponding to the share or distribution of profits.

However, no partner can have totally limited liability, even if he or she is a minor.

Family SCIs are one of the most popular types of SCI in France, thanks to their many advantages for acquiring and managing property, organizing joint ownership and reducing gift costs.

Before you ask yourself "When should I set up a family SCI?", ask yourself "Why?

It is highly likely that this legal form will meet your needs and those of your family.