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Registration
of SCIs
A law of
15th May 2001
obliged all unregistered civil companies to register
by
1st November 2002
. The
consequence of non-registration is the loss of the legal status as a
company (la personnalité morale). This
issue is relevant to those owning or purchasing real estate property in
France due to the fact that the SCI (société civile immobilière), a
specific type of French property holding company, comes within the field
of application of this law.
It
remains possible to register a company that has not been registered by the
above date limit of
1st November 2002
but the loss of legal status as a company would
already have automatically occurred.
If
an SCI has not been registered, the result of the loss of legal status as
a company is potentially highly significant.
The loss of legal status as a company is automatic and the property
owned by the SCI will thereafter be owned by the shareholders as
individuals. Consequently, if
the SCI was established precisely to avoid this (for example, to
circumvent one of the rules of French inheritance law), the fact of
non-registration removes the advantage originally sought.
In this situation, the real estate property could remain owned by
the shareholders as individuals. In
order to achieve the original desired outcome, it would be necessary to
register the company and then to transfer the property back into the
company’s name. This would
involve a new notaire’s deed and registration (thus fees).
Any
purchaser using an SCI should ensure that the same is registered upon
creation. Any person who owns
property through an SCI should check whether the company has been
registered and if not immediately seek to rectify the situation.
12/05/2003
- Legal update
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