Professional Civil business (PCS): What you need to know
Verified 16 October 2024 - Directorate for Legal and Administrative Information (Prime Minister)
Professional Civil business (PCS) allows the joint pursuit of a liberal profession. This structure is governed by rules specific to each profession, taking into account the specific characteristics of their activity.
Professional civil business (SCP) is a form of civil business between natural persons wishing to to practice jointly the same regulated liberal profession, or even several of them.
CPC thus allows for the establishment of a fee-sharing group firm, maintaining the independence of each partner and the freedom of choice of clients.
FYI
Any partner can only be a member of a single SCP and must carry out its activity only within this business (unless otherwise specifically provided for certain professions).
Associates of CPC, at the minimum number of 2, are obligatory natural persons. Legal persons (e.g. associations, other businesses) are excluded.
In principle, the number of partners is unlimited. However, the specific regulations for certain activities often provide for a maximum number of partners in order to maintain the personal and liberal nature of the exercise of the profession concerned.
Example :
The number of associate nurses is limited to 10 while the number of massage therapists is limited to 6.
Moreover, this social form is not open only to certain liberal professions whose members have been expressly authorized by Order in Council to group into PCS.
Judicial administrators and liquidatory agents | c. com., Articles R814-109 to R814-144 |
|---|---|
Architects | decree no. 77-1480 of 28 december 1977 |
Lawyers | decree no. 2024-872 of 14 august 2024 |
Lawyers at the Conseil d’État and the Cour de Cassation | decree no. 2024-876 of 14 august 2024 |
Medical biologists | c. health advertising, items L6223-1 and R6223-11 to R6223-61 |
Dental surgeons | c. health advertising, items R4113-26 to R4113-101 |
Auditors | c. com. R822-71 to R822-96 |
Commissioners of Justice | decree no. 2024-874 of 14 august 2024 |
Industrial property advice | c. intell own, items R422-12 to R422-40 and L422-7 |
Agricultural, land and forestry experts | c. rural, Articles R173-1 to R173-53 |
Accountants | ord. no. 45-2138 of 19 september 1945, art. 7 |
Expert surveyors | decree no. 76-73 of 15 january 1976 |
Registrars of the Commercial Court | c. com., articles R743-81 to R743-119 |
Nurses | c. health advertising, items R4381-25 to R4381-88 |
Physical therapists | c. health advertising, items R4381-25 to R4381-88 |
Doctors | c. health advertising, items R4113-3 and R4113-26 to R4113-101 |
Notaries | decree no. 2024-873 of 14 august 2024 |
Veterinarians | c. rural, Articles R241-29 to R241-93 |
CPC may perform the acts of a particular profession only through one of its members qualified to practice that profession.
Please note
Before you perform your registrationHowever, CPC must have registered with the professional association to which it belongs or have received the approval of the competent authority (e.g. certification of an accredited body for the real estate diagnostic).
Formation of share capital
The amount of the share capital shall be determined freely by the partners (€1 minimum) and divided into equal parts.
The share capital may be constituted by contributions of cash (money) and contributions in nature (goods: equipment, machinery, buildings, customers, etc.).
Contributions in kind must be fully released when the business is set up. In other words, the goods brought in must be made available to the business as soon as it is created.
On the contrary, cash contributions may not be fully paid up at the time of payment. The rules specific to each profession lay down the conditions under which release takes place.
Example :
- Release of half : auditors, lawyers and industrial property consultants are required to pay half the nominal value of the shares subscribed. The surplus must be released within two years.
- Release Third Party : architects must pay a sum of at least 1/3 of the nominal value of the shares. The surplus must be released within three years.
- Release of the watch : notaries must pay a sum representing at least 1/4 of the nominal value of the shares. The surplus must be released within five years.
Contributions in industry (know-how, competence) are also permitted in CPC. In practice, they can allow a young member without resources to become a partner in a CPS.
These contributions to industry do not contribute to capital formation but give rise to the allocation of opening shares right to profit-sharing. In return, the industrial supplier must contribute to the losses.
Financial liability of members
Each partner of CPC shall be indefinitely, i.e. on its entire assets, the business' debts to third parties (e.g. monthly loan payments, orders placed with a supplier).
However, the payment of debts is primarily the responsibility of the business who is liable for them from his own assets. It is only in the event of business failure that the partners are called to account for the debts of the business.
Management body
Professional Civilian business (PCS) Stewardship is freely organized by the statutes (appointment, dismissal, remuneration, term of office).
In principle, all partners have the quality of managers however, the articles of association may provide that management shall be entrusted to one or more members.
Please note
If the articles of association do not specify, the manager is appointed and dismissed by a decision of the members representing more than half of the shares.
In relations between partners, the manager is vested with the most extensive powers to act in all circumstances on behalf of the company (e.g. subscribing to professional insurance, sending of invitations to meetings, payment of social security contributions, etc.).
It is also necessary to refer to the regulations specific to the profession to know the mission of the manager.
Example :
In a physician PCS, the manager must prepare, after the close of each financial year, the annual accounts of the business, a report on the results of the financial year and the proposals for their allocation.
In dealing with third parties (outside management), the manager engages the business by acts within the scope of thesocial object.
Statutes may limit the powers of the manager and provide that the conclusion of such or such an act will require the prior authorization of the members (e.g. subscription of a bank loan, assignment of a building of the business).
In the case of a plurality of managers, the statutes may also determine the powers of each, and therefore, for example, share among themselves the burden of administering the business by specializing their powers.
Collective decisions of the members
Decisions which exceed the powers conferred on the manager are taken by members. In principle, each member has with one voice no matter how many shares he holds. The rules specific to each profession or the statutes of the business may lay down special provisions.
Example :
In the PCS of doctors, nurses or veterinarians, the articles of association may assign a reduced number of votes to partners who practice only part-time. In veterinary PCS, the same applies where the shares have not been fully released.
The decree specific to each profession determines the method of consultation of the partners as well as the rules of quorum and majority required for the validity of their decisions.
Quorum is usually met if the 3/4 of partners are present or represented. If this quorum is not reached, the partners are called again and the meeting then regularly deliberates if at least 2 partners are present.
As regards the majority conditions, the ordinary decisions (approval of accounts, appointment or dismissal of the manager...) shall, in practice, be taken by a majority of the votes of the members present or represented.
The decisions amending the statutes (increase in capital, transfer of registered office, merger, etc.) are taken by a majority of 3/4 of the votes of all the members.
Proceedings in meetings shall result in the establishment of a report signed by the partners present. The minutes shall be drawn up on a special register quoted and initialed by a representative of the professional association concerned or by the registrar of the judicial or commercial court according to the details of the decrees of application specific to each profession.
The revenue of the business consists of remuneration (i.e. fees) received and pooled by the partners in the course of their professional activity within the business.
Since CPC is subject to the business regime, outcomes are determined at the business level and imposed on behalf of each member as non-commercial profits (NBC).
Thus, each partner is personally liable to income tax (IR) for the share of the social benefits corresponding to his rights in the business.
In principle, the distribution of profits between members is fixed by the articles of association and is not necessarily proportional to their capital contribution. In the absence of specific statutory clauses, the benefits are divided equally between partners.
Please note
The remuneration granted to the manager under his social mandate shall not be not deductible from income tax business.
Professional Civil business (PCS) may opting for thebusiness tax (IS) from its inception or in the course of social life.
In this case, the amount of business tax (SI) is calculated from the outcome of the last completed fiscal year. The tax rate is 25% on the amount of tax profit or loss (reduced rate to 15% on the share of profits up to €42,500, subject to conditions).
The option must be notified to the company Taxation Service (SIE) before the end of 3e the month of the fiscal year in which CPC wishes to be subject to business tax (SI).
Who shall I contact
This option can be revoked up to 5e fiscal year following the year in respect of which the option was exercised. After this period, the option is irrevocable.
The Manager of Professional Civil business (PCS) reports to the self-employed scheme (or self-employed persons) in respect of the remuneration paid to them as managers.
He is therefore insured under the general social security scheme as a self-employed worker for sickness and maternity insurance. For old-age and disability-death insurance, liberal professionals are affiliated to one of the professional sections of the Cnavpl: titleContent or, for lawyers, at the CNBF: titleContent.
Please note
You can consult our dedicated card the social protection of the liberal professions.
If the manager is not remunerated, he is still affiliated to the self-employed scheme from the moment he pursues a self-employed activity within the business.
The contributions of the self-employed managing members of a professional civil business (SCP) shall be calculated on their share of the profit accruing to them and on the remuneration paid by the business for their management duties.
Each partner is personally responsible for the professional acts he performs.
Where a member commits a fault in the course of his professional activity, he shall be required to pay the damages the victim (a client or a patient), by means of his personal assets.
Example :
- A dental surgeon injures his patient during dental care.
- A public accountant makes errors in the bookkeeping and in the tax returns of his client, who is then subject to a tax adjustment.
- A notary does not check the validity of the title of the seller of a property. It may be liable to the purchaser who discovers that the property is encumbered with a mortgage or a bondage.
In this situation, the business is jointly and severally liable with him. This means that the victim of the harm can sue the business or the professional who committed the fault. If it is pursued, the business can then go back to the partner for reimbursement.
Accordingly, CPC and its individual partners are required to subscribe to a professional indemnity insurance (CPR). This insurance must be taken out even before exercising, a certificate of subscription may be required at the time of registration with the Order.
PII provides support in finding an amicable solution, covering legal and procedural costs, and compensating for damage.
Authorization of members
Within CPC, the shares are freely transferable between associates. On the other hand, transfers of shares to third foreigners to the business are subject to approval procedure.
In other words, the shares cannot be transferred to third parties with the consent of the majority of the partners representing at least 3/4 of the voices. The statutes may require a larger majority or unanimity of members.
In the case of an assignment subject to approval, the proposed assignment shall be notified to the business and to each of the partners. The business must give notice of its decision within 2 months from the notification. In the absence of a reply within that period, consent to the assignment shall be deemed to have been given.
The statutes may, by unanimity of the members, lay down the principles and procedures applicable to the determination of the value of the shares. The value of the shares may take into account a value representative of the civilian clientele.
If the business refuses to consent to the transfer, the members shall, within six months of such refusal, to acquire or cause to be acquired the sharesat a price fixed by an expert appointed for that purpose.
Declaration of assignment
Assignment established by an act
Assignments of social rights established by an act shall be subject to the formality of registration within the period of 1 month from the date of the act.
The deed of assignment must be deposited on the spot or by post, in 2 copies and accompanied by the payment of fees (by check or transfer) to the department in charge of the registration of the domicile of one of the parties or of the residence of the notary if the assignment is made by notarial act.
Who shall I contact
Assignment not established by an act
Assignments of social rights which are not not established by an act must be declared within the 1 month from the date of transfer:
- or by means of the online service available on impots.gouv.fr in your professional area, under Actions > Assignments of social rights
Impots.gouv.fr professional space
- or by means of Form No 2759, to be filed with the registration department on which one of the parties is dependent.
Assignment of social rights not established by an act to be declared obligatorily (form No 2759)
Who shall I contact
Payment of the registration fee
The transfer of shares shall give rise to the payment of a registration fee to the tax administration.
Payment of this fee shall, in principle, be at the expense of the purchaser. Nevertheless, the assignment may provide that the payment of this fee is to be borne by the assignor or shared between the two parties.
This duty shall be fixed at 3% and calculated on the transfer price less one abatement equal to €23,000 reduced to percentage of the number of shares transferred in social capital.
Example :
A partner disposes of 50 shares of a CPC whose capital is divided into 400 shares. It transfers its shares to the purchaser for a value of €50,000.
The amount of the registration fee to be paid by the purchaser is calculated as follows: - (23,000 x Number of shares sold ÷ Total shares in the business) x 3%.
Applied to our example, this would result in: 50,000 - (23,000 × 50 ÷ 400) = 47,125 × 3% = €1,414 the registration fee to be paid to the tax authorities.
The rate is 5% for businesses with a predominance of real estate, i.e. businesses where more than half of the assets are made up of buildings not used for his professional purposes.
The amount of the registration fee may not be less than €25.
PCS | SELARL | SELAS | SELAFA | |
|---|---|---|---|---|
Number of partners | Minimum 2 | 2 to 100 | Minimum 2 (or 1 partner in SELASU) | Minimum 2 |
Leader | Manager(s) | Manager(s) | President + Directors-General | Chairman + Board of Directors or Executive Board |
Share capital | Free | Free | Free | €37,000 minimum |
Allowed Inputs | Currency, nature and industry | Currency, nature and industry | Currency, nature and industry | In cash and in kind only |
Release of cash contributions | Specific to the profession exercised by the business | At least 1/5 from creation | At least 1/2 from creation | At least 1/2 from creation |
Financial liability of members | Indefinite | Limited to inputs | Limited to inputs | Limited to inputs |
Taxation of profits | Income tax (IR). Possible option for SI | Business tax (IS). Possible option for IR | Business tax (IS). Possible option for IR | Business tax (IS). Possible option for IR |
Social security of the director | Self-employed person (SST) | TNS if majority management, treated as employee in other cases | Assimilated employee | Assimilated employee |
Corporate securities | Shares | Shares | Actions | Actions |
Eligible for trading on a regulated market | No | No | No | No (unlike traditional SA) |
Transmission of securities | Majority of partners representing at least 3/4 of the votes | Majority of 3/4 of partners practicing in SELARL | Majority of 2/3 of partners practicing in SELAS | In accordance with the procedures laid down in the statutes of SELAFA |
Registration fee | 3% of the sale price after a reduction of €23,000 | 3% of the sale price after a reduction of €23,000 | 0.1% of the transfer price | 0.1% of the transfer price |
System of professional civil businesses (Articles 5 to 37)