Non-profits

French law recognizes three types of not-for-profit (“NPO”) organizations: associations, foundations, and endowment funds. Each have their own legal framework.

Associations

Associations can be registered by any two persons for any purpose except for the “sharing of profits.” Founders register an association by declaring in the Journal Officiel, a daily government paper containing official declarations and information regarding new associations. Declarations may be done at the Préfecture or Sous-Préfecture levels, respective to where the association is to be located, or done online. Note that an non-profit association can operate undeclared in France. However, only declared associations may collect membership fees, fundraise, have an official bank account, etc.

To declare a new association, founders must provide:

• Name of the association (as well as any official abbreviation/acronym)
• Purpose of the association (to be published)
• Address of the main office, as well as that of the management office, if different (has to be physical address, not to be a P.O. box)
• Copy of the minutes of the meeting at which the association was established
• Copy of association’s statutes signed by at least two people (one administrator and one other signatory)

Other information required may include the: names, professions, addresses, and citizenships of its administrative team; website address, or a full list of association members (applicable to unions or federations).

Declaration requirements and procedure are different for associations registering in Alsace-Moselle, which does not fall under the 1901 Law of Associations. Associations with a head office in the Bas-Rhin, Haut-Rhin, or Moselle should send their declaration form to the magistrate’s court. Instead of publishing in the Journal Officiel, they should declare in a newspaper of legal advertisements. Other differences include:

• 7 people are needed to create an association
• Associations can be profit-making as long as they are not in direct competition with a business
• Profit making associations may be be subject to business taxes

Foundations

Foundations are created to manage the collection and irrevocable assignment of goods, rights, or resources to serving the “public interest,” which in France may refer to projects that involve philanthropy, education, science, social, humanitarian, sports, family, culture, art or environment; work towards the common good (in opposition to a limited sphere of private interests); and do not seek profit.

There are eight types of foundations:

• Public utility foundations
• Corporate foundations
• Sheltered foundations
• Scientific cooperation foundations
• University foundations
• Partnership foundations
• Endowment funds (see below)
• Hospital foundations

Establishing a foundation requires some level of starting capital (minimum amount conditional upon which type of foundation is being established), and a clear purpose that serves the public interest.

Endowments

Endowments are defined in the French Act for the Modernization of the Economy of 4 August 2008 as:

“a non-profit-making legal entity under private law that receives and manages, through capitalization, assets and rights of any kind that are contributed to it free of charge and irrevocably, and uses the income from the capitalization in order to carry out work or a mission of general interest, or redistributes this income to assist a non-profit-making legal entity in the performance of its work and missions of general interest.”

A fairly new type of not-for-profit entity in France, they have the legal status and tax benefits of foundations, but with the flexibility and simplicity of associations. Endowments can be created by registering articles with the Prefecture and declaring in the Journal Officiel. Management rules are very flexible. The only requirement is that the endowment have a managing board of directors with at least three members.

For-profits

There are over a dozen different kinds of business entities in France. Each incorporation type has its benefits, liability exposure, and starting requirements. The three most common types are SARL (similar to LLC), SAS (similar to joint stock company), and SA. To register, submit an M0 form with relevant documentation to the appropriate government agencies (a registered agent or lawyer may be helpful at this stage).

General documentation requirements:

• Unique name (not already trademarked by someone else)
• Purpose of the company
• Copy of the company formation announcement of company formation from the appropriate journal (e.g., Le Figaro, Le Monde), or a copy of the publication request made to said journal, along with its confirmation of acceptance
• At least two copies of the articles of incorporation (aka by-laws) signed by all shareholders; these must be in French for certain types of business entities (e.g., limited companies).
• Regarding directors and corporate officers:
  • Written nomination of the managing director (“MD”) (can be submitted as part of the articles of incorporation)
  • Passport copies
  • Signed declarations affirming the absence of criminal convictions
  • Affidavit stating name of parents
• Company address and proof (e.g. a copy of a lease or recent utility bill)
• Written statement from the MD if the company is to be set up in his residence for the first two years, and proof of his residence.
• Certificate from bank ascertaining that the amount of initial share capital has been paid by shareholders
• Certificate including names of shareholders, number of shares each, and amount of share capital paid by each

Sources

• Philanthropy Impact

  France: Charity Formation and Legal Framework

• French Law of Associations (1901), Art. 1

• Smart Expats

  Creating and Running a Non-Profit Association in France

• Service-public.fr (French)

  Declaring an Association (official forms)

• Fondation de France

  Create a Foundation

• French Act for the Modernization of the Economy of 4 August 2008, Art. 140

• International Journal of Not-for-Profit Law

  Endowment Funds: A New Development in the World of Philanthropy In France

• EuroStartEnterprises.com

  Guide on How to Open a Business in France

• JustLanded.com

  How to Register a Business in France