SCI bylaws: definition and importance

A Société Civile Immobilière (SCI) is a legal structure designed for the collective management of real estate assets and the sharing of profits between associates. Before getting started, it's essential to understand what an SCI is, how it works and its specific features. The main purpose of an SCI is to enable the acquisition and management of real estate assets by several partners, thus facilitating joint decision-making and the sharing of profits.

The SCI's Articles of Association serve as a binding contract between the partners, defining the company's operating rules. They set out the organization and management procedures, which are essential to ensure the structure's long-term future.

Poorly drafted articles of association can have damaging consequences, compromising the management of the SCI and leading to potentially costly disputes. To avoid these pitfalls, it is essential to draw up precise articles of association that comply with legal requirements.

Mandatory information in SCI articles of association

To be valid and legally recognized, the articles of association of a société civile immobilière (non-trading real estate company) must include a number of compulsory details.

Here are the essential elements to include:

This information is essential to structure the company and clearly define its scope of activity, as well as to ensure the company's legal compliance.

Corporate purpose

The corporate purpose of an SCI is a fundamental statement that defines the activities the company may engage in. It is crucial to formulate it precisely to avoid any risk of nullity of the contract.

A well-drafted corporate purpose clearly defines the SCI's scope of action and ensures that its activities comply with the legal framework.

Company name

The corporate name is the SCI's identity. It must be unique and not give rise to confusion with other entities.

The company name is also mentioned in the articles of association and plays a crucial role in the legal recognition of the company.

Head office

The SCI's registered office must be located in France, and must be mentioned in the articles of association. This makes it possible to determine the competent commercial court in the event of a dispute, which is essential for dispute resolution.

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Essential clauses in SCI articles of association

The clauses of an SCI's articles of association are crucial in anticipating and overseeing all aspects of the company. They establish management protocols, including the distribution of shares and day-to-day operations. Management conditions can be freely set by the partners, allowing great flexibility and adaptation to the specific needs of the project.

It is important to avoid clauses that disproportionately favor one or more partners. The articles of association must include clear procedures for the transfer of shares, to protect the interests of all partners.

By carefully drafting the articles of association, associates can prevent potential conflicts and ensure that everyone's interests are respected. The articles of association must be adopted by all associates at the founding general meeting.

Management

The managers of an SCI are responsible for administering the company and representing it legally. They can be natural persons or legal entities, partners or not, offering considerable flexibility in management.

Associates' rights

SCI partners enjoy rights proportional to their share in the company's capital, particularly with regard to the distribution of profits. They must obtain the agreement of the other partners before selling their shares, which protects the interests of the company.

Partners are also indefinitely liable for the company's debts, in proportion to their share in the share capital. The Articles of Association may include specific provisions for shares in the event of a partner's death.

General meetings

General meetings are key moments in the life of an SCI. Ordinary General Meetings (AGMs) and Extraordinary General Meetings (EGMs) enable important decisions to be taken. The manager convenes these meetings, and the procedures for convening them, as well as quorum and majority rules, may be specified in the bylaws.

Decisions taken at an Ordinary General Meeting require a simple majority, while decisions to amend the Articles of Association require an Extraordinary General Meeting.

How to draw up the articles of association of an SCI?

Drafting the articles of association of a non-trading property company is a crucial step in organizing relations between partners and reducing the risk of conflict. Precise drafting of the articles of association minimizes disagreements and ensures harmonious management of the SCI. It is essential to comply with a number of compulsory provisions defined by law, as detailed in the French Civil Code.

The use of model articles of association can be a valuable aid in understanding and drafting the necessary documents. Many digital platforms offer free templates, making it easy to draw up articles of association. However, it is often advisable to consult a notary or lawyer to avoid costly mistakes and ensure legal compliance.

Using a template

The use of online templates for SCI statuts makes drafting much easier, by providing references and guaranteeing legal compliance. These templates can be adapted to meet the specific needs of the SCI, offering a practical and cost-effective solution for SCI creators.

Customize status

It is important to personalize the articles of association of an SCI so that they are adapted to the project and the specific situation of the partners.

For example, the dismemberment of shares enables the sharing of rights of use and income, which can be particularly useful in certain family or professional configurations.

Modification of SCI bylaws

The articles of association of an SCI can be amended at any time to adapt the operating rules to the needs of the partners. Any amendments must be approved by the partners at a general meeting and registered with the relevant authorities. This process may entail additional costs, but it is essential to maintain the relevance and effectiveness of the articles of association.

Amending the articles of association may be necessary to reflect major changes such as adding new associates, modifying the corporate purpose, or changing the registered office. Each modification must comply with strict formalities to be valid and avoid future disputes.

Why set up an SCI?

Creating an SCI offers a number of advantages, not least the collective management of real estate assets, enabling partners to make decisions together and reduce conflicts. An SCI also facilitates the organization and management of property holdings, offering greater structure and clarity.

What's more, the SCI simplifies the transfer of assets. Shares can be inherited, avoiding conflicts between heirs and facilitating gifts. It also protects assets from forced sale, and offers greater flexibility than other forms of ownership, such as joint ownership.

The SCI also offers attractive tax advantages for inheritance and property income.

How much does it cost to draw up SCI articles of association?

The cost of drafting the articles of association for an SCI varies considerably depending on the approach chosen. Here are the different options:

  • If the partners draw up the articles of association themselves, this may be free of charge.
  • Calling in a professional such as a lawyer or notary can cost between 1,500 and 2,500 euros.
  • Using an online legal platform is a more economical option, costing around 200 euros.

Each option has its advantages and disadvantages, so it's important to choose the one that best suits your needs.

Associates can save on drafting costs if they have legal skills, but it is often advisable to consult a professional guide to avoid costly mistakes and ensure legal compliance.

In a nutshell

In short, the articles of association of an SCI are essential for structuring the company, defining its objectives and establishing management rules. Well-drafted articles of association help prevent conflicts between partners and ensure the long-term survival of the SCI. Mandatory information such as the corporate object, company name and registered office must be clearly defined to guarantee the validity of the articles of association.

Setting up an SCI offers many advantages, particularly in terms of collective management, asset transfer and asset protection. However, it is crucial to draw up the articles of association properly, and to amend them as the company's needs evolve. Don't hesitate to use free templates and consult professionals to ensure that your articles of association are complete and comply with legal requirements.