France: Operating a Business

Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labor | Management of Human Resources

Legal Forms of Companies

Types of Companies and Capital (Max/Min)	Number of Partners/Shareholders and Liability
Individual businessman alone No notion of capital	1 person Liability for debts on his personal property.
Limited liability company (SARL) Minimum: EUR 1	1 to 100 partners. Limited to the amount of capital contributed.
Private limited company under sole ownership (EURL) 7,500 EUR minimum	1 to 100 person Limited to the amount of capital contributed.
Public limited company (SA) EUR 225,000 minimum if the company brings in public savings, EUR 37,000 otherwise	minimum 7 shareholders Limited to the amount of capital contributed.
Simplified joint-stock company (SAS). Minimum: EUR 1	minimum : 1 natural person or legal entity Limited to the amount of capital contributed.
General partnership (SNC). no minimum	minimum 2 partners Liability is joint and indefinite.
Limited joint-stock partnership no minimum	2 partners: the active partners and the silent partners The active partner: joint and indefinite; The silent partner: limited to the amount of capital contributed.
Non-trading company no minimum	minimum 2 partners Liability for registered debts.

Enterprises Federation: The government information website for SMEs
Net PME, the information website for SMEs
The Directorate-General "Enterprise and Industry" of the European Commission
The CGPME (General Confederation of Small and Medium Enterprises)
The MEDEF (Movement of French Enterprises)
Search a Company or a Financial Report: Société
Infogreffe
Verif.com, Financial and legal information.
Manageo.fr, Financial and legal information.

Business Setup Procedures

Setting Up a Company	France	OECD
Procedures (number)	5.00	5.60
Time (days)	7.00	13.80

Source: Doing Business.

For Further Information: Consult Doing Business Website, to know about procedures to start a Business in France.
Trade Register, in French.
Registry of the Tribunal de Commerce de Paris, in French.
The Competent Organization: The Portal for the Company Formalities Centers
The register of commerce

Recovery Procedures

Principle: In the framework of the safeguard scheme, two legal decisions are generally made:
- being put into receivership, a state where payment stops, it is impossible to face the liabilities due with the current assets.
- compulsory liquidation, a persistent state where payment stops and receivership is manifestly impossible.
Since the law of July 26, 2005, it is possible for a buyer to make a takeover bid for a company once the safeguard or receivership procedure has begun.
Minimum Debt-to-Capital Ratio Triggering Liquidation: No minimum
Bankruptcy Laws: The Commercial Code
Reorganization and Rehabilitation Laws: The economic initiative Act 2003-721 of 1 August 2003
Company safeguard scheme: Commercial Code art. L. 626-1 et seq. and R. 626-1 et seq.

The Active Population in Figures

	2010
Labor Force	28,210,000

Source: CIA - The world factbook

	2009	2010
Total activity rate	-	56.10%
Men activity rate	62.20%	-
Women activity rate	50.50%	-

Source: UN - United Nations

Employed Persons, by Occupation (% of Total Labor Force)	2005
Farmers	2.4%
Craftsmen	2.6%
Shopkeepers and similar	2.4%
Managers and higher intellectual professions	13.2%
Intermediate professions	20.8%
Employees	26.2%
Workmen	21.6%

Source: INSEE

For Further Statistics: INSEE statistics on work
For Further Information About the Labor Market: ILO, International Labor Organization
Studies and research of the Ministry of Employment

Working Conditions

Opening Hours
Legal Weekly Duration: 35 hours
Maximum Duration: Maximum duration:: 10 hours per day and 48 hours per week.
Night Hours: Between 9pm and 6am.

Working Rest Day: The weekly rest day of at least 24 hours is Sunday; this day must be observed but permanent dispensations may be granted for particular activities.
Paid Annual Vacation: 2 and a half working days of paid vacation a month; working days are all weekdays except Sunday and public holidays.
This equals 30 days or 5 weeks vacation a year.
Retirement Age: 67 years of age, but as soon as the employee has paid enough into the compulsory retirement scheme, he can leave his work any time after age 62.
Child Labor and Minimum Age For Employment: 16 years old
Informal Labor Market: About 6% of the population say they have worked without being declared every year. For further information consult the European Commission's study of undeclared work.
Undeclared work is above all made up of hours of work only partially declared or undeclared overtime.

The Cost of Labor

Pay

Minimum Wage: The minimum gross wage is EUR 9.00.
Average Wage: The average annual wage for men is EUR 24,446 and for women EUR 19, 818.
Other Forms of Pay
Pay For Overtime: Between the 36th and 39th hour an increase of 25%.
Between the 40th and the 43rd hour an increase of 25%.
From the 44th hour an increase of 50%.
Pay For Rest Days Worked: According to the collective agreements, except May 1 which is increased by 100%.
Pay For Night Hours: For one hour of night work if it is for less than 25 nights a year: an increase of 25%
For one hour of night work if it is for more than 25 nights a year: 10%
Pay For Overtime at Night: The same as for overtime.

Social Security Costs

The Areas Covered: Health insurance (medical care, maternity, disability, death), retirement pensions, family allowances, unemployment benefit.
Contributions: Contributions Paid By the Employer: 42% to 45% (the employer pays the contributions to be free of his commitments regarding sickness, retirement and unemployment).
Contributions Paid By the Employee: 22%
Competent Organization: URSSAF

Management of Human Resources

Recruitment

Method of Recruitment: More and more applications are made via Internet. The method of recruitment in France is by face to face interview.
Recruitment Agencies: The ANPE is the official employment agency.
There is also a specialized agency for managers, the APEC.
Recruitment agencies: Michael Page International, Hudson, etc.
Agencies specialized in temporary work: Vediorbis, Adecco, etc.
Recruitment Websites: Portal for on-line recruitment
Emploi.com
Monster

The Contract

Type of Contract: The permanent contract (CDI) is the type of contract which is most often used.
The fixed-term contract (CDD) makes it possible to resort to temporary workers.
The Contrat Nouvelle Embauche (New Hiring Contract) is a new form of CDI where the rules for breach of contract are more flexible during the first two years in exchange for the payment of an indemnity of 10%.

Breach of Contracts
Retirement: There are several ways of retiring: early retirement, automatic retirement and official retirement.
Dismissals: The employer initiates dismissals:
- redundancy is either individual or mass redundancy
- dismissal for professional misconduct
Other Possible Methods: Resignation; this is initiated by the employee.
Labor Laws: Labor Code
Juritravail, an information website on labor law

Dispute Settlement

Conciliation Process

Cases of Dispute: Physical violence (7%), moral harassment (7,7%), sexual harassment (1,5%), working conditions, etc.
Legal Framework: Submission to the council: this is the filing of the request for the procedure of settling work disputes.
Arbitration: conciliation between the parties is achieved. In case of non-conciliation, the procedure is referred to the judgement bureau.
Judgement: the case is judged by the councillors of the industrial tribunal (conseil des prud'hommes).
Remedy at law: the case can be submitted to the appeal court (cours d'appel) and this can review the decision of the industrial tribunal.
Procedure: Defined in the Labor Code

Judicial Structures

Legal Framework: Defined in the Labor Code
Competent Legal Body: The Industrial Tribunal ( Conseil des Prud'hommes)
The occupational safety and health administration (Inspection du Travail ): the contact details by region
For further information, click here (in French).

Social Partners

Social Dialogue and Involvement of Social Partners: In France negotiations take place at the national level, at the level of sectors of activity and at the company level. French labor law provides an extensive institutional role for employee representatives and for organized labor.
Unionization Rate: Today 8% of French employees belong to a union, that is twice fewer than 25 years ago. And yet the unions remain strong and active.
Unions: The CGT, general labor confederation
The CFDT, French democratic labor confederation (in French)
FO, workers' union
The CFTC, French Christian workers' confederation
The CFE-CGC, management confederation-general confederation of managers
The UNSA, national union of autonomous unions
The Solidaires trade union
Regulation Bodies: The Ministry of Employment

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