when company comes to the end of his term, it is necessary to make a decision as to whether to continue its existence. This is called the extension of the company's mandate. Here are the rules to keep in mind: how to extend the life of a company ? What are the formalities to respect ? The following companies are affected: SARL, SAS, EURL et SASU.
Set the duration of a SARL, EURL, SAS or SASU
The statutes of a SARL, EURL, SAS or SASU must define the duration of existence of the company. It is determined by:
- The application of a period of time,
- The precise indication of a data,
- The occurrence of a moment specific,
- The disappearance or fulfillment of the company mission.
In any event, the duration is determined according to the rules set by the partners who know that it cannot be older than 99. It begins to run from the date of registration of the company in the Trade and Companies Register (RCS) (except for companies which were incorporated before April 1, 1967, for which the starting date is the date indicated in the statutes (usually the date of the signature of the statutes).
At least one year before the date ofexpiration of the company, the partners must be consulted to make a decision on the extension of the company.
Decree extending the duration of a company (SARL, EURL, SAS, SASU)
La prorogation leads to modification of the articles of association of the company and must therefore be voted on by an extraordinary general meeting (AGE) or, where applicable, under certain conditions, by a written consultation.
The conditions for the extension of the duration of the company
The partners have the possibility of choosing the new duration of the company, the duration being able to be higher than 99 years. The duration of a company can be extended in this way. be extended several times. However, any provision of the articles of association allowing an implicit renewal at each expiry of the existence of the company is considered as unwritten.
Furthermore, from a tax and legal point of view, the extension does not lead to the creation of a legal entity in its own right (the same legal entity remains).
The decision to extend the duration of an LLC
In the case of SARL incorporated until August 3, 2005 which did not adopt the new quorum and majority rules, the extension of duration is made by the partners, who met in assembly or in writing, bringing together at least three quarters of the shares.
In SARLs incorporated after 4 August 2005, the decision provides for the representation or presence of at least one quarter of the shares at the first call, and an approval at the majority of two-thirds of the shares held by the partners represented or present (unless the requirement of a higher quorum or majority is required by the articles of association). If the statutes allow it and if the statutes allow it, the extension of the deadline could be decided by an act signed by all the partners.
The decision to extend the duration of an SAS
The extension of the deadline is not in the list of choices that must be made by the shareholders. However there is a consultative meeting shareholders is essential. In case the statutes of the association do not contain any mention to this subject, the requirements of the Civil Code apply: the extension is only determined by the shareholders unanimously. It is strongly recommended that the statutes of the association describe the procedure for consulting shareholders and the majority required to make this type of decision.
Formalities related to the extension of the duration of a SAS or SARL
The news of the extension of the company's term
To be enforceable against third parties for the purpose of protecting third parties, the business term extension must be published in the journal of legal announcements (JAL) which covers the department in which the company's head office is located. This is a notice of extension of term. Notification of extension of term. To be legal, the notice must contain certain mandatory information .
The registration of the deed determines the extension
The minutes relating to extensions of the company's duration must be recorded with the tax authorities before December 31, 2020. The company had to pay a fixed price EUR 350 or EUR 500 (for companies with at least EUR 250). The report has been issued to the tax authorities.
The finance law for 2020 abolished, from January 1, 2020, the fixed duty on an act which is a simple extension of an organization. In the end, this formality is indeed free for the majority of business extensions. The finance law for 2021 abolished the registration formality. From now on, it is no longer necessary.
Files are submitted to the business formalities centre.
Then, it is necessary to constitute the whole of the dossier then send it to the business formalities center (CFE). It is composed of the following parts:
- A copy, with the original reference to the tax office registration, of the EGM minutes which reflected the company's term extension resolution, certified by the legal representative.
- A copy of statutes most recent signed by the legal representative.
- Le M2 form must be completed and signed
- A certificate of publication in a newspaper of legal announcements ;
- and and to the order of the clerk of the court for the settlement of formalities.
Refusal to extend the life of a company
If the partners do not grant an extension to the company, it will be dissolved at the end of its term. There dissolution of a company follows a liquidation period with the exception of certain cases.
The method to follow depends on the legal structure of the company:
- Dissolve et liquidate a SASU / Dissolve et liquidate an SAS.
- Dissolution et liquidation of an EURL / Dissolution and liquidation of an LLC
Continuation of operation in the absence of extension .
Any company is dissolved on the date of its creation and retroactivity cannot be accepted in terms of extension. However, the dissolution has no initial effects since it is not published (it cannot be enforceable against third parties). However, anyone who knows that the legal deadline has expired can use it to prove the claim that the company is dissolved.
From July 21, 2020, shareholders who are not consulted within the stipulated time may request the president of the commercial court, within one year from the expiry date of the company, to allow the holding a new consultative meeting in order to “regularize” the situation within three months. In this respect, the president can appoint a lawyer to initiate the consultation and then call a meeting, for example.
If a company reaches the end of its mandate, it can be extended or dissolved. In both cases, the specific formalities must be completed.
- The cost of a modification of the statutes
- The capital increase of a company
- Le change of corporate purpose of a company
- Le company name change
- Change of director of a company
- Le transfer of the registered office of a company
- Le change of business address
- A declaration for the transfer of the registered office of a company
