What are the most common forms of companies?
The limited liability company (SRL)
The limited liability company (LLC) is generally considered to be the most appropriate legal form of company for a small or medium-sized business.
An LLC may be formed by one or more persons.
The LLC has its own legal personality that is distinct from that of the shareholders or the sole shareholder. It also has its own assets.
It is in principle a private company: the shares are in principle registered (the owner is named, so it is possible to identify him) and the possibilities of transferring these shares are limited unless otherwise provided for in the articles of association.
It is a limited liability company: the shareholders only commit themselves up to the amount of their contribution. In the event of bankruptcy of the company, creditors cannot make any claim on the shareholders’ own assets. However, there are exceptions to this principle for the founders.
The articles of association must be drawn up by notarial act.
There is no minimum requirement for initial equity, but it must be sufficient in light of the proposed activity.
The public limited company (SA)
The joint stock company is a form of company mainly chosen by large companies, but it is also used by SMEs. It is preferable in case of important needs in capital, because it can call upon new external capital or launch itself in public savings. It therefore allows a rapid growth of the company.
The joint stock company is a form of company that is mainly based on the contribution of capital by the shareholders.
This form of commercial company has the advantage of offering a complete distinction between the company and its shareholders. Their liability is therefore limited to their contribution. The shares are, as a rule, easily transferable and without limitation. It is therefore a form of company that is less family-oriented.
This form of company must be established by notarial act. It requires a minimum capital of 61,500 euros, but few entrepreneurs have this amount at their disposal at the start of their activity. Moreover, the administrative management of such a company is relatively heavy for small structures.
The cooperative society (SC)
The SC is a form of company which is constituted by a minimum of three founders. The SC offers a limited liability: the shareholders are only responsible for the amount of their contribution. In addition, if the business project is part of the social economy sector, the cooperative form is the only one that allows the application for a “social enterprise” approval, provided certain conditions are met.
More information on cooperative societies.
General partnership
A general partnership is a partnership.
The law does not set a minimum capital.
Its existence is linked to the fate of the partners.
This form of company requires few formalities.
The partners remain jointly and severally liable for the company’s commitments.
The limited partnership
The limited partnership consists of general and limited partners.
The general partners are responsible for management.
The limited partners are financial backers but cannot intervene in the management.
The law does not set a minimum capital.
Only the general partner is indefinitely and jointly and severally liable on his own assets for the debts and losses of the Company. The limited partner is only liable for the amounts he has promised to contribute, unless he has become involved in the management of the Company.
