Limited businesses in France such as EURL or SARL have to abide to specific legal framework or rules for their registration as well as for their closure. In this article I have summarised the steps that will need to be taken in order to close a French limited company down. I would strongly recommend you to ask your accountant to handle the EURL or SARL closure for you. This should cost between 1,500 euros and 1,800 euros.
The closing down of a SARL or an EURL can be due to the loss of equity, i.e. more than half of the working capital, to legal procedures (liquidation judiciaire) or the wish from the shareholders to end the business. Here are the steps to close your SARL down:
Step 1. Decision to close down your SARl or EURL
The dissolution of a SARL is a resolution of shareholders or justice who decide the end of the company and order its liquidation. When the initiative comes from the shareholders, they must meet in extraordinary general meeting called Assemblée Générale Extraordinaire (AGE) to deliberate on the request of a dissolution. The adoption of this proposal is subject to a majority of three-quarters of the shares.
The dissolution has to be published in a legal paper and will mark the end of the activity, i.e. trading. The legal entity entité morale which refers to the liability of the limited company will carry on until the closure process is complete.
For that same meeting, a person has to be designated as liquidateur, i.e. the official person handling the dissolution. That person, usually a shareholder or most likely an accountant will handle the steps listed below and deal with your creditors and debtitors. If the dissolution takes place following a court order or liquidation judiciaire, the liquidator is appointed by the same decision.
The decision to close down a SARL or EURL down has to be:
- Published in a legal paper journal d’annonces legales to confirm the appointment of the liquidator
- Recorded with the tax office Impots
- Recorded with Greffes du Tribunal de Commerce
- Recorded on Registre du Commerce et des Societes at the Chamber of Commerce
The legal fees involves for these legal publications may amount to 200 euros. This will leave the liquidator up to three months so complete the books, pay debts, collect money, value and settle the net asset, complete the profit and loss account (bilan) and settle the net result.
Step 2. Liquidation and closing down of the SARL or EURL
Once the liquidation is completed, the liquidator will prepare the accounts. The shareholders are convened for a new extraordinary general meeting to approve the final accounts. For this meeting, the liquidator will discharge the management and discharge himself of his own mandate, and confirm the closure. This meeting takes place no later than 3 years after the decision to dissolve the company. The decision to close the SARL or EURL has the effect of ending the legal entity personnalite morale of the company and the role of the liquidator.
More advertising formalities have to be done to complete the dissolution, including:
- Publication of the decision in a legal gazette (the same as for the appointment of liquidator)
- Record the decision with the tax office
- Record a copy of the decision with Greffes du Tribunal de Commerce
- De-registration from the Registre du Commerce at the Chamber of Commerce
These publication will incur extra taxes (about 200 euros).
After this process, the SARL or EURL business in France is officially closed down. The Chamber of Commerce will issue you will an official document for the radiation. It is then best to send a copy to your bank manager to close the professional bank account. It is also best to send a copy to RSI.