Invest in real estate via a French family SCI company: all you need to know.
A French family SCI company allows members of the same family to acquire and manage one or more properties.
The objective: is to mitigate the rigidity of joint ownership and optimize the owners’ asset strategy.
How does a family SCI work and what are its advantages? Here is everything you need to know before creating your family SCI.
What is a family SCI?
Family SCI: definition
A family SCI is a Civil Real Estate Company, formed by members of the same family. The family ties of partners may extend to the fourth degree and include ties by marriage. When a partner with no family ties joins the company, the SCI loses its family character.
What is the difference between a family SCI and a classic SCI?
Compared to a classic form, the major specificity of the family SCI lies in the family tie that unites its associates. This family character allows him to avoid assimilation to a professional status.
In fact, it benefits, among other things, from the advantages of the private lessor in the event of a rental (minimum 3 years instead of 6) and can also benefit from the pricing conditions reserved for individuals in the event of a loan.
How a family SCI works
How to create a family SCI?
To create a family SCI, you must:
Be at least two partners;
Deposit the share capital and open a bank account in the name of the SCI;
Draft (or have drafted) the statutes of the SCI;
Publish the legal notice (can be done online);
Assemble the file necessary for the registration of the company;
Submit the file to the Registry of the Commercial Court.
Creating a family SCI: how much does it cost? The cost of creating a family SCI varies from €1,000 to €3,500 depending on the professional who accompanies you (notary, lawyer, accountant). If you embark on this process alone, you will have to count 185€ for the costs of publishing a legal announcement and 88€ for registration costs (we do not recommend this route if you are not a French native and you are not familiar with legal aspects of French law). It is essential not to neglect tax or legal support to avoid any unpleasant surprises, future or immediate.
Why create a family SCI?
Most often, the family SCI is formed for the purpose of organizing the management of real estate (rented or inhabited by one of the partners). Whatever the purpose, the corporate purpose of the SCI is never commercial.
The importance of the articles of association and the shareholders’ agreement
In an SCI, it is the statutes that govern the operating rules. In some cases, the statutes of the SCI can be brief. In addition, a shareholders’ agreement may define the specific rules governing the relationship between the shareholders and the power of the manager. The shareholders’ agreement may, for example, contain a clause on the sale of shares, or a unanimous agreement clause for the adoption of certain decisions. This contract can be signed during the creation of the SCI on the sidelines of the statutes, or later if the need arises.
For example, the statutes of the family SCI can set the majority rules in the event of a general meeting or define the procedures in the event of the purchase or sale of shares.
💡 Good to know: to avoid any confusion or misunderstanding between family members, it is recommended to be accompanied by a legal real estate professional to establish them.
The liability of partners in a family SCI
In a family SCI, the partners are liable for the debts of the company up to their participation in the share capital (unless specifically specified in the partners’ pact). In practice, a creditor cannot, therefore, claim full settlement of a debt from a single partner.
When the SCI is created, the partners jointly appoint a manager. This manager-partner becomes the representative of the company in the eyes of third parties, but the major decisions remain decided collectively during a general meeting.
💡 Please note: a family SCI can also have several managers. This is often the case when the SCI is made up of the parents (who are both appointed manager-partners) and their children.
How to dissolve a family SCI?
To dissolve a family SCI, you must:
Organize a general meeting of dissolution;
Appoint a liquidator;
Write the minutes of dissolution;
Publish the notice of liquidation in the official journal;
Delete the SCI from the RCS.
The general meeting decides on the distribution of real estate owned by the SCI. They can be sold or distributed among the partners according to the valuation of their share.
How to create a family SCI without contribution?
To create a family SCI, a capital contribution of at least €1 is required. In other words, not much. Nevertheless, it is recommended not to present banks with too little share capital. This indicator is often judged as revealing the financial stability of the partners.