Practical document: SCEA Statutes
The SCEA, or agricultural civil society, has the sole purpose of managing agricultural operations. It is aimed exclusively at farmers looking for the best legal form of partnership to collaborate and who generally hesitate between the EARL (Limited Liability Farm) and the SCEA. The latter offers numerous advantages for farmers, making it a preferred structure compared to other forms of companies.
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What is an AECS?
The SCEA is a civil entity with an exclusively civil purpose, meaning it must not have a commercial objective. Its goal is to enable the management and operation of agricultural and forestry activities, as well as the management of built and unbuilt land. The operating area is not limited. The duration of the company is 99 years but can be extended.
How many partners in an ECS?
A CEA must consist of at least two partners. There is no maximum number imposed by law. Unlike a CGAE (common agricultural exploitation group), two unmarried spouses can be partners. Additionally, it is possible to associate with SCEA:
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- partners who are not agricultural farmers;
- minor children;
- a legal entity (another company).
The CEA is often composed of members of the same family.
Share capital and contributions:
Unlike the EARL or GAEC, no minimum amount is required by the SCEA law regarding the share capital of the SCEA, which is freely established by the partners. It is divided into equal shares allocated to each partner according to their contribution. 20% of the capital paid in cash must necessarily be released at the formation of the company, with the balance to be paid within the following 5 years.
The company can have variable or fixed capital. The advantage of choosing variable capital lies in the ability to vary the capital between a minimum capital provided by partners and a maximum capital. This maximum capital is not enforceable and does not engage the partners’ liability to actually contribute to the amount. However, it allows them to vary the capital between these two amounts without having to undergo heavy formalities with the CFE and legal announcements of capital changes. It is therefore easy to attract new investors into the company’s capital.
Partners are required to make contributions. Three types of contributions are possible:
- in cash (money)
- in kind (farm, agricultural machinery, animals, provision of a lease, land, etc.)
- in industry (know-how, technical knowledge, etc.): does not enter into the company’s share capital.
In-kind contributions are not required to be evaluated by a contributions commissioner.
Why create an AECS?
Unlike the EARL, the partners’ liability is not limited to their contributions. On the contrary, they are jointly and severally liable for the debts of the CEA to third parties, indefinitely and in proportion to the shares held.
If a partner has contributed in industry, they are then liable in the same way as one who holds the smallest share of capital.
However, before proceeding against partners, creditors must have pursued the SCEA in vain.
But then, why choose this legal form for one’s agricultural business?
- The first advantage is free entry: unlike an EURL or a CGAEC, the minimum amount is not legally set, and businesses can even be established with €1 of starting capital;
- in-kind contributions, regardless of their value, do not have to be evaluated by a contributions commissioner;
- the capital is freely set by the partners;
- only two spouses can be partners,
- which is not possible when creating a CGAEC; the operating area is not limited and does not need to be clarified.
Of the three types of agricultural businesses that can be created, this is the simplest to establish.
How to create your SCEA file?
To create a CEA, you must follow the process below:
- Drafting the statutes: they must be written and include a series of mandatory mentions. As with any civil society, the content of the statutes is strictly regulated by law;
- Drafting the act of appointment of the manager(s);
- Signing the statutes;
- Depositing the funds (at least 20% of the capital) in the bank account opened in the name of the company; Publishing the incorporation notice
- in a legal announcements journal;
- Registration with the commercial court registry;
- Submitting the file to the CFE (Business Formalities Center) including the statutes, the certificate of deposit of funds, and the certificate of legal announcement.
Here is the list of documents and papers to be submitted in anticipation of registering an SCEA:
- Copy of a manager’s identity document and partners
- Original copy of the SCEA statutes
- Copy of the manager’s appointment certificate if not indicated in the statutes
- Certificate of non-conviction and lineage of the manager
- Copy of the approval from the prefecture of the registered office (mandatory for CGAEC)
- Report on the evaluation of in-kind contributions by an auditor
- M0 Agricultural Form
- M’BE Form designating the beneficial owners of the company
- Original power of attorney for the manager in case of signing for order
- Copy of the authorization issued by the regulatory authority, diploma, or title if the activity is regulated
- Certificate of domiciliation and proof of occupation of the premises (lease, invoice, …)
- Certificate of publication of the company creation notice in a legal announcements journal
- Certificate of registration and letter of acceptance from the designated auditor
- to the order of the register of the commercial court of the registered office
The cost of creation includes registration fees of €70
Is SCEA taxation advantageous?
Corporate profit tax
By default, the AECS is subject to income tax. Each partner is taxed on their share of the profits.
However, partners have the option to choose corporate tax. This option is irrevocable. This option is rarely exercised in practice as agricultural activity can be subject to significant fluctuations.
How does the leader get paid?
Managers of the ACE are called managers, they are the representatives of the company. They are not necessarily chosen by a partner. Their social system differs if:
- the management is exercised by a partner: the partner is considered a farmer, self-employed agricultural worker
- ; management is not exercised by a partner: if the partner receives a salary, they are then an employee of the farm and affiliated with the agricultural program managed by the central fund of the Agricultural Social Mutuality (MSA).
The manager is appointed by a decision of the partners representing more than half of the shares during the company’s duration.
The remuneration of the manager is freely set by the partners at the General Assembly. Unlike managers of EARL or GAEC, this is not regulated by law.
The transfer of SCEA shares
To transfer their shares, a partner must obtain the approval of all other partners. This condition of unanimity can be transformed into a majority condition by law.
Taxes apply to the sale of shares as well as registration fees equivalent to 5% of the value of the transferred shares.
Tag: agricultural civil exploitation company