France: Operating a Business

In this page: Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labour | Management of Human Resources

Legal Forms of Companies

Sole propietorship ("entreprise individuelle"): Number of partners: 1 person only.
Capital (max/min): No minimum capital required.
Shareholders and liability: Unlimited liability.
Limited liability company (SARL): Number of partners: Between 1 and 100 partners/shareholders maximum.
Capital (max/min): Minimum: EUR 1
Shareholders and liability: Limited to the amount of capital contributed.
Private limited company under sole ownership (EURL): Number of partners: 1 person only (legal or natural).
Capital (max/min): Minimum: EUR 1
Shareholders and liability: Limited to the amount of capital contributed.
Public limited company (SA): Number of partners: Minimum 2 shareholders (7 for listed companies)
Capital (max/min): EUR 37,000, of which half as to be paid-up at the moment of incorporation.
Shareholders and liability: Limited to the amount of capital contributed.
Simplified joint-stock company (SAS).: Number of partners: Minimum 1 natural person or legal entity with no maximum.
Capital (max/min): No minimum capital required.
Shareholders and liability: Limited to the amount of capital contributed.
General partnership (SNC).: Number of partners: Minimum 2 partners
Capital (max/min): No minimum capital required.
Shareholders and liability: Liability is joint and indefinite.
Limited joint-stock partnership (SCS): Number of partners: 2 partners: the active partners and the silent partners
Capital (max/min): No minimum required.
Shareholders and liability: The active partner: joint and indefinite;
The silent partner: limited to the amount of capital contributed.

Business Setup Procedures

Setting Up a Company	France	OECD
Procedures (number)	5.00	5.21
Time (days)	4.00	9.47

Source: The World Bank - Doing Business, Latest data available.

The Competent Organisation: The Portal for the Company Formalities Centres
The Register of Commerce
For Further Information: Consult the Doing Business Website, to find out about procedures to start a Business in France.
Registry of the Tribunal de Commerce de Paris, in French.

Financial Information Directories

Dun & Bradstreet - Worldwide directory with financial information on businesses

Infogreffe - Certified financial information on companies

Manageo - French companies directory

Societe.com - Company directory in France.

Verif.com - Financial information on French companies

Recovery Procedures

Principle: In the framework of the safeguard scheme, two legal decisions are generally made:
- being put into receivership, a state where payment stops, it is impossible to face the liabilities due with the current assets.
- compulsory liquidation, a persistent state where payment stops and receivership is manifestly impossible.
Since the law of July 26, 2005, it is possible for a buyer to make a takeover bid for a company once the safeguard or receivership procedure has begun.
Minimum Debt-to-Capital Ratio Triggering Liquidation: No minimum
Bankruptcy Laws: The Commercial Code
Reorganization and Rehabilitation Laws: The economic initiative Act 2003-721 of 1 August 2003
Company safeguard scheme: Commercial Code art. L. 626-1 et seq. and R. 626-1 et seq. (in french)

The Active Population in Figures

	2018	2019	2020
Labour Force	30,438,691	30,385,859	30,033,626

Source: International Labour Organization - ILOSTAT, Latest data available.

	2017	2018	2019
Total activity rate	71.60%	72.01%	71.82%
Men activity rate	75.66%	75.90%	75.44%
Women activity rate	67.64%	68.22%	68.30%

Source: International Labour Organization - ILOSTAT, Latest data available.

For Further Statistics: INSEE statistics on work
For Further Information About the Labour Market: ILO, International Labour Organisation
Studies and research of the Ministry of Employment

Working Conditions

Opening Hours
Legal Weekly Duration: 35 hours
Maximum Duration: Maximum duration : 10 hours per day and 48 hours per week.
Night Hours: Between 9pm and 6am.

Working Rest Day: The weekly rest day of at least 24 hours is Sunday; this day must be observed but permanent dispensations may be granted for particular activities.
Paid Annual Vacation: 2 and a half working days of paid vacation a month; working days are all weekdays except Sunday and public holidays.
This equals 30 days or 5 weeks vacation a year.
Retirement Age: 67 years of age, but as soon as the employee has paid enough into the compulsory retirement scheme, she/he can leave her/his job any time after age 62.
Child Labour and Minimum Age For Employment: 16 years old
Informal Labour Market: About 6% of the population say they have worked without being declared every year. For further information consult the European Commission's study of undeclared work.
Undeclared work is above all made up of hours of work only partially declared or undeclared overtime.

The Cost of Labour

Pay

Minimum Wage: In 2022, the minimum gross monthly wage is € 1,603.12 according to Service Public (lastest available data).
Average Wage: In 2020, the average net annual wage reached € 29,070 according to INSEE (latest available data).
Other Forms of Pay
Pay For Overtime: Between the 36th and 39th hour an increase of 25%.
Between the 40th and the 43rd hour an increase of 25%.
From the 44th hour an increase of 50%.
Pay For Rest Days Worked: According to the collective agreements, except May 1 which is increased by 100%.
Pay For Night Hours: For one hour of night work if it is for less than 25 nights a year: an increase of 25%
For one hour of night work if it is for more than 25 nights a year: 10%
Pay For Overtime at Night: The same as for overtime.

Social Security Costs

The Areas Covered: Health insurance (medical care, maternity, disability, death), retirement pensions, family allowances, unemployment benefit.
Contributions: Contributions Paid By the Employer: Employer contribution varies depending on the size, type and location of businesses to about 50% of gross pay.
Contributions Paid By the Employee: About 20% of the gross wage
Competent Organization: URSSAF

Management of Human Resources

Recruitment

Method of Recruitment: More and more applications are made via Internet. The method of recruitment in France is by face to face interview.
Recruitment Agencies: The ANPEis the official employment agency.
There is also a specialized agency for managers, the APEC.
Recruitment agencies: Michael Page, Expectra, Robert Walters etc.
Agencies specialized in temporary work: Randstad, Adecco, etc.
Recruitment Websites: Monster
Indeed

The Contract

Type of Contract: The permanent contract (CDI) is the type of contract which is most often used.
The fixed-term contract (CDD) makes it possible to employ temporary workers.
The Contrat Nouvelle Embauche (New Hiring Contract) is a new form of CDI where the rules for breach of contract are more flexible for employers during the first two years in exchange for the payment of a 10% indemnity for the employee.

Breach of Contracts

Retirement: There are several ways of retiring: early retirement, automatic retirement and official retirement.
Dismissals: The employer initiates dismissals:
- redundancy is either individual or mass redundancy
- dismissal for professional misconduct
Other Possible Methods: Resignation; this is initiated by the employee.
Labour Laws: Labour Code
Juritravail, an information website on the labour law
Consult the Doing Business Website, to obtain a summary of the labour regulations that apply to local entreprises.

Dispute Settlement

Conciliation Process

Cases of Dispute: Physical violence (7%), moral harassment (7,7%), sexual harassment (1,5%), working conditions, etc.
Legal Framework: Submission to the council: this is the filing of the request for the procedure of settling work disputes.
Arbitration: conciliation between the parties is achieved. In case of non-conciliation, the procedure is referred to the judgment bureau.
Judgment: the case is judged by the councilors of the industrial tribunal (Conseil des Prud'hommes).
Remedy at law: the case can be submitted to the appeal court (cours d'appel) and this can review the decision of the industrial tribunal.
Procedure: Defined in the Labour Code

Judicial Structures

Legal Framework: Defined in the Labour Code
Competent Legal Body: The Industrial Tribunal ( Conseil des Prud'hommes)
The occupational safety and health administration (Inspection du Travail)

Social Partners

Social Dialogue and Involvement of Social Partners: In France negotiations take place at the national, sectorial and company levels. French labour law provides an extensive institutional role for employee representatives and for organised labour. Strikes are common in France and are part of the social fabric.
Unionisation Rate: Today 8% of French employees belong to a union (5% in the private sector and 14% in the public sector). That is twice as few as 25 years ago, yet the unions remain strong and active.
Labour Unions: The CGT, general labour confederation
The CFDT, French democratic labour confederation
FO, workers' union
The CFTC, French Christian workers' confederation
The CFE-CGC, management confederation-general confederation of managers
The UNSA, national union of autonomous unions
Regulation Bodies: The Ministry of Labour, Employment, Professional Training and Social Dialogue

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