The Scop is a commercial business with variable capital that operates as a SARL, a SAS or a SA.

The employees are the majority shareholders of the Scop: they hold at least 51% of share capital and 65% voting rights. If not all employees are associated, all are destined to become so.

The share capital of the Scop is therefore majority owned by its employees. The law provides that a minimum share of 25% profits must be distributed to them. This strongly involves employees in the development and sustainability of the company.

The choice of legal form has consequences on the amount of share capital, the management of the business or the obligation to appoint an auditor. For more details, you can consult the Scop SA, SARL et SAS made available by the General Confederation of Scop.

To be recognized as a Scop, the business must apply for accreditation from the Ministry of Labor. Once accredited, it must provide the department with various documents on the monitoring of its activity each year. The Scop is also subject to a cooperative review.

Application for accreditation and inclusion on the Scop list

This request shall be sent by registered letter with acknowledgement of receipt to the Ministry of Labor, which shall forward it to the General Confederation of Scops for its opinion.

To make the request, you must provide the following documents :

• Statutes of the business
• List of members of the governing bodies and nature of the activity
• Nominal list of auditors or name of the body responsible for the cooperative review
• Fact sheet with the following:
  
  • Name and exact shape of the business
  • Address of its head office and, possibly, of its various secondary schools
  • Company identification number (Siren number)
  • Amount of share capital
  • Number of shares and nominal value
  • Number of partners employed in the business and the total number of their shares
  • Number of shares and the identity of the partner holding the most shares
  • List of non-employed partners, their identification, their number of shares and votes
  • List and amount of shareholdings in cooperative production businesses or in the capital of other businesses, whether cooperative or not
  • Modalities of distribution of profit
• Balance sheet, income statementand the Statutory Auditors’ notes and reports concerning the last accounting year or cooperative review. Where the date of the creation of the business does not allow for the provision of such documents, it is possible to submit a commitment to produce them within 6 months of the end of the first financial year.

This application for approval allows to obtain registration on the list of Scoppublished annually by the Ministry of Labor in the Official Journal.

Obligation to provide information and documents to the Ministry of Labor

Scop must transmit to the Ministry of Labor each year, within 6 months following the end of the financial year, the following documents:

• Accounting Documents
• Updated information sheet containing information on the name and exact shape of the business, the address of the registered office, the registration number Siret and the EPA code, the amount of the share capital, the number of shares and their nominal value, etc.

It must also send the following documents if the operations have taken place:

• Reporting of lease-management transactions
• Declaration of contributions to business
• Declaration of disposal of fixed assets to a non-cooperative business(s)
• Amendments to the statutes
• Changes in the composition of the management bodies

Cooperative Review Control

All Scops must conduct a cooperative review every 5 years. The statutes may, however, provide for a shorter period.

When Scop are organized as LLC and SASHowever, they are not required to have an External Auditor (IAC). They are then subject to a cooperative review annual.

This check is carried out by a reviewer approved by the Ministry of Labor who checks the conformity of the organization and operation of the Scop.

The approved reviewer shall establish a written report including the following:

• Characteristics of the controlled cooperative business, including its legal form, size, organization, statutes and nature of its activities, as well as the specific rules applicable to it
• Possible reservations on the operation of the cooperative
• Corrective Action Proposals
• Where appropriate, formal notice to comply with the principles and rules of cooperation.

In a Scop, social capital is variable. This means that it can vary either upwards or downwards without having to change the Scop's statutes. Employee partners can therefore easily enter and exit the business by making a contribution or withdrawing their contribution.

When the Scop is organized as a LLC or SAS : it must bring together at least 2 employee partners and the amount of the minimum share capital is €30 (or at least €15 per employee).

When the Scop is organized as a SA : it must bring together at least 7 employee partners and have a minimum share capital of €18,500.

Governing bodies

The directors are appointed by the shareholders' meeting. Depending on the type of business, the steering members are different. It may be a management, a general management, a board of directors, a management board or a supervisory board.

Any partner may be appointed to fill out steering functions everything in remaining employed of the Scop. Non-salaried members may also carry out management tasks but they may hold no more than one third of the mandates.

The terms of office of the directors shall be limited to the following periods:

• 4 years for the SARL manager or SAS executive (they can be re-elected)
• 6 years for the head of SA (he may be re-elected)

The functions of a member of the Board of Directors or the Supervisory Board shall not be not remunerated but they perceive compensatory allowances for the time spent administering the Scop. On the other hand, business expenses are reimbursed.

Decision-making

Each partner has an equal voting right, regardless of the capital held on the principle: one person = one vote.

There are 2 types of associates in a Scop:

• Employee partners : they must possess together at least 51% the share capital of Scop and 65% voting rights on the board of directors. The renunciation of the status of partner leads to the termination of the employment contract and, conversely, the termination of the employment contract (except retirement, economic dismissal and invalidity) leads to the loss of the status of partner. They participate in the company's strategic choices (major investors, allocation of earnings, etc.) during the the general assembly
• External partners "investors"also called non-cooperative partners : they do not work in the company and remain in the minority. They cannot hold more than 35% voting rights. In certain cases, the articles of association may provide that non-cooperative members have voting rights proportional to the capital they hold.

The conditions of quorum and most of the shareholders' meetings depend on the legal status of the Scop (SARL, SAS or SA)

For more information on voting procedures, please refer to the following sheets:

• Decision-making in a SARL
• Decision-making in a SAS
• Decision-making in a public limited company

Specific distribution of profit (or net operating surplus)

Profit (or net operating surplus) is divided into 3 parts:

• Company share : 15%at least profits shall be used for the establishment of the legal reserve, with at least 1% is allocated to the reserve a statutory so-called development fund. In general, the company share is 40%or 45% profits. Part of the reserves can be converted into an investment provision (PPI) when the Scop commits to invest in equipment within 4 years.
• Employee share : it is allocated to employees, whether they are partners or not, in addition to their remuneration. These employees must have 3 months of presence during the accounting year or 6 months of seniority. The employee share must be at least equal to 25% profits. In general, it amounts to 40%or 45% profits.
• Associated share called interest on shares: it is paid to members only if the articles of association so provide. It corresponds to 10%or 15% profits. It must be lower than the employee share and the company share.

Taxation of the Scop

The Scop is subject to thebusiness tax (IS) at the normal rate of 25% on the entire tax result.

Scop may deduct from its taxable income:

• The share of net profits that is distributed to employees
• The portion of the profits put into the special participation reserve when a participation agreement has been deposited and signed

The Scop benefits from the exemption of company property tax (CFE).

Scop's manager benefits from a special social protection scheme.

Indeed, he has the same social protection as an employee with unemployment insurance.