PACTE : Simplify Business Creation

Enacted on May 22, 2019, the Law on the Action Plan for Business Growth and Transformation aims to simplify the legal framework for economic activities.

Its goal is to release productive forces by removing unnecessary regulations and restricting useful regulations to the strict minimum.

Administrative Procedures

Creation of a single, dematerialized point of contact for business creation (article 1) – The administrative simplification focuses on the implementation of an electronic centralization platform replacing from 2021 onwards the 7 networks of Centres de Formalités des Entreprises - Business Formalities Centres (hereinafter BFC) – and from which any creation, modification and termination of a business must be declared regardless of its form and activity with the objective of reducing the time limits from 1 month to 1 week thanks to centralization and dematerialization.

The platform will centralize all the required documentation and will serve as a direct interface between the entrepreneur and all the recipient organizations.

The advantages of such a device are numerous. It :

  • channels the procedures to a single contact person;

  • standardizes the documents to be provided (information, supported documents);

  • facilitates the distribution of these documents;

  • reduces processing costs;

  • accelerates the process.

The one-stop shop will be based on the “” model created in 2009 from a grouping of several BFC networks. Since 2013, this platform has allowed entrepreneurs to create companies in a completely dematerialized way.

However, only 6% pf business creation files go through it. This is mainly due to a lack of information from entrepreneurs. It will be up to the BFCs to guide them during a transition phase from 1 January 2021 to 1 January 2023. A system of support and assistance by consular bodies and the new platform has yet to be defined by a governmental decree.

Creation of a single, dematerialized business register (article 2) – A business register will replace the Registre du Commerce et des Sociétés - Trade and Companies Registry, the Répertoire des Métiers - Employment Repertoire – and the Registre des Actifs Agricoles – Agricultural Assets Register.

The government is empowered to establish this register by order within 24 months after the PACTE entered into force. The aim is to centralize the 8 current registers – and the 800,000 registered companies – on a digital platform serving as a general register for :

  • facilitating access to information;

  • harmonizing filing formalities;

  • simplifying document control;

  • reducing processing costs;

  • speeding up the registration process.

It remains to be seen who will effectively control the transmitted elements, whether the legal value given to them will remain unchanged (opposability, presumption of commercial status, attribution of legal personality, etc.), whether the old registers will be maintained under the new register or whether they will be deleted.

Electronic Legal Publications (Article 3) – The objective is to modernize, simplify and reduce the cost for companies of legal and judicial announcements. The creation of a company is accompanied by an obligation to publish a notice of incorporation by an authorized press service. Until then, only printed newspapers were allowed to do so.

Invoiced per line, this service cost about 200 euros. According to the evolution of practices, the law opens the field of authorizations to digital press services.

Authorization will only be granted to newspapers, in which ads represent less than 50% of the content.

The government’s determination of flat rates, particularly for incorporation announcements, ensures that the price of dematerialized announcements will be lower. Nevertheless, this reduction will be spread over 5 years, in order to give current advertisers time to adapt their offers.

In addition, digitization will enable remarkable progress to be made in the dissemination of information on companies, particularly since the sanctions imposed by the Directorate-General for Competition, Consumer Affairs and Prevention of Fraud (DGCCRF) for non-compliance with payment deadlines will be systematically published.

Entrepreneurs’ Obligations

Removal of the obligation for craftsmen to do a training period to prepare for installation before being able to register in the Employment Repertoire (Article 4) – This is to restore equal treatment with traders, as registration in the Trade and Companies Registry is not subject to any obligation to do so, to reduce cost (about 400 euros) and to accelerate the creation (by approximately 1 month). While it is always recommended to follow installation training (reduced to 194 euros), especially for micro-entrepreneurs, it is no longer an obligation.

Removal of the obligation to open a professional bank account for micro-entrepreneurs with less than 10,000 euros of annual revenue (Article 39) – This results in a reduction of creation and processing costs (about 240 euros per month) for a majority of micro-entrepreneurs (51% of them realize less than 10,000 euros of annual revenue). The obligation only becomes effective if the threshold of 10,000 euros is exceeded over two consecutive financial years.

Unfortunately, this will complicate the online declaration of annual revenue micro-entrepreneurs have to establish in order to determine their corresponding social contributions; as well as the accounting of the book of professional receipts they received. This measure goes hand in hand with the exemption from property tax for companies with less than 5,000 euros of annual revenue.

Simplification of the Limited Liability Sole Proprietorship (hereinafter LLSP) regime (Article 7) – It is now permitted to set up a LLSP company with separate assets, even if no property, right, obligation or security is affected to it. The subsequent constitution of these assets may vary on simple entry or withdrawal in the accounts of an asset allocated to the professional activity.

The variation will become enforceable as from the publication of the accounts, when they are filed in the register. In the same vein, the minimum capital requirements for the creation of commercial companies tends to disappear and the determination of their assets evolves according to their balance sheet.

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