Investing in stone attracts millions of French people. And the number of entrepreneurs creating a real estate company is constantly growing. And for good reason, it’s a great way to have additional income but also to become an owner. A real estate project can only see the light of day when the creation of a business is carried out. On this, the SCI is the most chosen legal form. The latter confers many advantages in terms of transmission, operation, management of benefits, etc. Are you taking steps to create an SCI? Before choosing the legal status, let’s take a look at the advantages. Be aware, moreover, that it is not completely devoid of disadvantages.
The main advantages of the SCI
The creation of your SCI as a professional allows you to benefit from many advantages. First of all, we can cite the ease of asset management.
Ease of management
With an SCI, the procedures relating to the constitution, management and transmission of real estate assets are facilitated. The partners can all participate to raise the necessary funds to make the project a reality. The costs and fees relating to the acquisition of the property are borne by all the holders of the company. The SCI is also appreciated thanks to the ease of transmission. With this status, it is possible to make donations of shares every fifteen years. In other words, the heirs can become owners of the heritage after a certain time. Which is impossible in the case of direct possession of a building. In summary, legal tools meet the needs of SCI creators. their partners,
freedom of capital
Civil real estate companies are not required to provide a minimum share capital. In other words, SCIs can fix their capital. It can be a symbolic euro. If we consider this aspect of the law, we can say that the creation of an SCI can be without contribution. In practice, it is still necessary to provide cash capital. The amount contributed by all the partners must be able to operate the company. And above all, the personal contribution of the company must facilitate the obtaining of a bank loan. For an SCI without contribution, it will be difficult to obtain financing from banking organizations.
Once you have registered your SCI in the commercial register, you can adjust the status freely and flexibly. With regard to the decision-making processes, they must respect the conditions imposed by the regulations (majority and quorum). They can have different turns depending on the nature of the decisions that will be taken (ordinary or extraordinary). Namely, if a partner wants to transfer shares for a third party, he needs the approval of the majority of partners and shares. Between partners, this condition is not so firm. It is also the manager who is the legal representative of an SCI. He has all the powers to manage the company. On the other hand, these powers are clearly mentioned, defined and specified in the contract established between the partners.
Choice of tax regime
The civil real estate company also benefits from tax optimization. We are talking here about the possibility of choosing between the tax system. The SCI can opt either for the IR or the IS. In the first option, we are talking about income taxes. In the second, we talk about corporate tax. Furthermore, an SCI is also translucent. This means that there is no taxation at the company level. Taxation is directly related to the income earned by the partners. If there is a resale, the capital gain may be subject to tax exemption.
Separation of the real estate project from the professional activity
It is possible to split the professional activity and the real estate. This aims to protect the heritage from the problems that may arise from its exploitation. In case of debts, bankruptcies, creditors cannot seize the property. The latter remains the property of the SCI. Moreover, in the event of the sale of the company, the SCI is free not to include the balance sheet of the company. For the buyer, the cost will be reduced since the commercial value of the company will not be mentioned. This simplifies the transfer.
The disadvantages of SCI
The SCI undoubtedly has many advantages. We have just mentioned a few of them. Currently, it is the legal form most chosen by entrepreneurs who want to invest in stone. On the other hand, this legal form is not entirely devoid of disadvantages. Let’s name a few.
A complex creation process
Many steps and legal formalities must be completed when you create an SCI. The ideal is to inquire beforehand with the Trade Register to have all the details. And this, well before starting all the concomitant stages of business creation. So you won’t waste time.
Even if the operation of an SCI is more flexible, the holders of this company are bound by numerous administrative obligations. Accounting, cash flow and taxation must be kept rigorously. The declarations of results must be made and sent to the tax authorities each year. In addition, the partners must be convened annually for the GA. In short, to complete your real estate project, opt for the simplest legal form, the SCI. The lines above show you the advantages of creating this type of company.