The creation of a holding company represents a complex legal system. The realization of such a project depends on the type of company. If this is your project then you should be aware of the cost of creating such a company. Discover in this article, the cost of forming a holding company.
The Cost of Forming a Holding Company: What Are the Unavoidable Costs?
You must take into account costs related to registration, share capital, legal publication and drafting of the articles of association, which are a necessary step for your activity. The Articles of Association define the functioning of the company. The cost varies depending on the degree of risk and what you are willing to accept.
After you have drafted and signed the Articles of Association, you need to proceed with the registration of the holding company. Particularly mandatory step for the following companies: SARL, EURL, SASU, SAS. Its purpose is to bring your company into existence legally.
Three steps should be followed:
- deposit of share capital;
- Proceed with the publication of a declaration in a JAL: newsletter of legal declarations of the location of your holding company;
- Formation of the registration file is to be sent to the Registry of the Commercial Court of your registered office.
The price depends on the type of company. In the case of a sole proprietorship whose purpose is commercial, calculate an average of 25.34 euros for registration in the Register of Businesses and Companies (RCS) for those not covered by the micro-social regime. For a craft business, the price depends on the departments. Calculate an average of 130 euros for registration in the business directory (RM).
In case of a full-fledged company like EURL, SARL, SNC, Civil Companies, SA, SASU, SAS: The cost of registration with RCS is 37.45, which includes filing of documents. Whereas it costs RM 45€ on average.
Cost of publication of legal notice
In 2022, the pricing for publication of legal declarations in the context of the Pact law was changed. The price depends on the legal form of the company at the time of incorporation, dissolution, winding up of the company, as well as the place of publication of the declaration for certain forms of the company. Publication can be done online or in hard copy. The goal is to make public and accessible important tasks related to your company’s life.
|package excluding VAT
Except Mayotte and Reunion
|package excluding VAT
Mayotte and Reunion
|Other Civil Companies
Formation of sole proprietorship is exempted from publication of notice of creation.
The share capital of a holding also depends on the legal form chosen. This is the amount that you as a partner allocate to the share capital of the holding company. If your resources are limited, you can choose either the minimum amount (in case of SAS/SARL and SASU/SAS).
Depositing your company’s share capital with banks: Free (but lengthy) service with traditional banks, as opposed to online business accounts. Prices vary between 69 and 100 euros excluding taxes (HT).
The advantage of depositing capital online is to be able to complete the processes easily and quickly. You can also use a notary’s paid service who may charge either a flat rate or a percentage of the amount of time you spend on your file. of value greater than or equal to 100 EUR HT, as the latter can also advise you regarding your methods, the project to be installed.
The possibility of making deposits into deposits and consignment funds was offered before June 1, 2021. The service has now been discontinued.
Summary Table of Total Cost of Forming a Holding Company
For legal forms like capital companies, SNC, civil companies, here is a summary table
|From €1 (€37,000 for SA)
|0 to 100€
|legal notice fee
|€138 to €387 depending on condition
|€39.42 (RCS) to €45 (RM)
|Accompanying fees (including drafting methods)
|From 0€ (alone) to 2000€ (lawyer) depending on the project and level of support
How to reduce the cost of forming a holding company?
In addition to the costs mentioned for the construction phase, which you can reduce by using an online business creation site (LegalTech), there is also the question of the contribution you can make to the holding company. Three possibilities to create a holding company in this context without breaking the bank.
selling shares to an incorporated holding company
You have to first form a holding company in which you will sell your equity securities held as a partner or shareholder of an existing company to the parent company.
This process requires a low registration fee of 3% for the transfer of securities to the holding company. However, once the legal system is in place, the partners will have to pay higher tax in case of capital gains.
An additional obstacle lies in the fact that this possibility is offered to you on condition that you get the approval of all your colleagues.
Contribution of securities from operating companies to the holding company
Unlike the first solution, it involves using equity securities of companies in the group. Therefore, taxation on capital gains will be done only after making legal arrangements. This means that the holding company will not be subject to taxation until it has transferred the securities, i.e. has not resold the company’s shares.
Let’s take an example: you form a company 1, with a share capital of 20,000 euros, well-done activity. You decide to form a holding company. You must contribute to the parent company created using the company’s securities. To this end, a contribution auditor will intervene to assess your company and determine its value. In our case, an estimated 200,000 euros. Therefore you will earn a capital gain of 180,000 euros. This amount will be put on hold for resale. For example, when the parent company decides to resell Company 1 for €600,000, it would realize a capital gain of €420,000. It is at this point in time (resale of Company 1 by the holding company) that you will pay tax on your capital gains of 180,000 EUR.
You can also take advantage of semi-exemption of capital gains from the sale of securities of a subsidiary by benefiting from the parent-daughter regime of approximately 88% (Article 219-I, one-quick of CGI).
Proceed with spin-off of operational activity
In this context the helper has been highlighted. Instead of selling securities to your holding company, you have to bring all your assets into it. As a result, the transfer of assets would create a new company incorporated for the occasion. In the case of a subsidiary from below, which involves transfer to another company formed wholly for the purposes of operating the branches of the activity of an already existing company, a partial contribution of assets is possible. In the case of a top-down subsidiary, that is, the transfer of the shares of the partners in the holding company to the company created for operations, the latter will become a subsidiary of the previous company.
Therefore, you will be able to avoid certain taxes: corporate tax, VAT, provided that you favor a preferential arrangement for mergers, allowing you to neutralize the tax consequences, but also the accounting consequences of the merger.
Annual operating cost of a holding company
You need to consider your accountant’s costs, social charges, if you have employees in the company, administration costs, but also bank fees and more. This is why it is advisable to have a minimum share capital sufficient to form a holding company.
Pay taxes: Corporation tax (IS) if it is a capital company subject to IS, tax costs as well as annual costs related to your company’s accounting. Other costs may also apply, including costs related to holding a general general meeting. Every year the holding company has to pay CFE, which is the financial contribution of the companies. The price varies according to the municipalities or departments.
questions to ask
Is the creation of a holding company necessarily expensive?
The legal system can be complex. In addition, there are several annual costs of running a holding company. However, it is quite possible to reduce the cost of setting up a holding company by following certain rules.
Is there a minimum budget for forming a holding company?
The budget depends on the legal form chosen. A holding company is above all a company in itself whose corporate objective is characterized by the holding of equity securities.