How do you terminate a SARL in France?

by | Jul 16, 2024

How do you terminate a SARL in France?
A Société à Responsabilité Limitée (SARL), or limited liability company, is a popular business structure in France. Terminating a SARL can be a complex process that requires careful adherence to legal procedures. In this blog, I describe the conditions and step-by-step procedure to dissolve a SARL in France.

Conditions for the Dissolution of a SARL

Before you can initiate the dissolution of a SARL, certain conditions must be met:

  • Decision of the Shareholders: The decision to dissolve the SARL must be approved by the shareholders at an extraordinary general meeting. A majority of two-thirds of the votes is required, unless the Articles of Association provide otherwise.
  • Reasons for Dissolution: A SARL may be dissolved for a variety of reasons, including achievement of its stated objective, expiration of its term, a decision by the shareholders, or a court order.
  • Liquidation of the SARL: After dissolution, the SARL must be liquidated, which means selling all assets and paying off debts.

Steps for Dissolving a SARL

Here is a detailed guide to terminating a SARL in France:

1. Hold Extraordinary General Meeting

.
Organize an extraordinary general meeting of shareholders. Vote on the dissolution of the SARL. Document the decision in the minutes of the meeting.

2. Appointment of a Liquidator

.
A liquidator must be appointed at the general meeting. This can be a shareholder, a third party, or a professional liquidator. The liquidator is responsible for handling the liquidation, including selling assets and paying debts.

3. Publish Notice of Dissolution

.
Publish a notice of dissolution in an official publication for legal notices (Journal d’Annonces Légales). The publication should include the name of the liquidator, the date of dissolution, and the legal entity of the SARL.

4. Registration with the Trade Register

.

  • Submit the resolution of dissolution and the appointment of the liquidator to the Centre de Formalités des Entreprises (CFE) or the Chamber of Commerce.
  • The documents you must submit include:
    1. Form M2 (notification of change in legal situation)
    2. A copy of the minutes of the general meeting
    3. A copy of the publication in the Journal d’Annonces Légales

5. Liquidation process

  • The liquidator sells the assets of the SARL and pays the debts.
  • The liquidator prepares a balance sheet and liquidation account and submits them to the shareholders for approval.

6. Holding Closing Meeting

  • Organize a closing meeting of the shareholders to approve the liquidation account and confirm the conclusion of the liquidation.
  • Draw up minutes of the closing meeting.

7. Final Record of Liquidation

.

  • Publish a notice of the conclusion of the liquidation in the Journal d’Annonces Légales.
  • Submit Form M4 (Notice of Termination) to the Trade Register, along with the minutes of the closing meeting and the approved liquidation account.

8. Erasure of the SARL from the Commercial Register

.
After the registration is completed, the SARL will be officially deleted from the Commercial Register.

In conclusion

Terminating a SARL in France requires meticulous planning and compliance with legal procedures. By following these steps, you can ensure that the dissolution process goes smoothly. It is always advisable to seek legal advice or hire a professional to ensure that all steps are carried out correctly.