THE SCI
- What is SCI?
The Société Civile Immobilière (SCI) is a french private limited company. Its main purpose is to facilitate the acquisition, management and transfer of real estate. It is used in the family context as in the professional context to carry out a real estate construction operation. Its creation requires only 2 partners.
The SCI is a viable and sustainable solution to make real estate investments in a family or professional way. This allows you to buy a property with several while distributing the shares of each to the extent of the contribution invested in the property .
It is a sustainable and easier way to be able to share wealth with your family. In a professional way this makes it possible to give a share to each of the partners without imposing amounts because ultimately each contributes to the extent of his means.
These contributions, most often in kind or in cash, give entitlement to shares in the SCI which correspond to the shares in the share capital. Thus, the partners share the profits and losses.
This is the ideal legal form if you want to acquire and manage real estate.
To create a real estate company, you must :
There are 6 types of SCI: the Family SCI, the rental SCI, the allocation SCI, the shared enjoyment SCI, the construction-sale SCI (SCCV)
The SCI is a viable and sustainable solution to make real estate investments in a family or professional way. This allows you to buy a property with several while distributing the shares of each to the extent of the contribution invested in the property .
It is a sustainable and easier way to be able to share wealth with your family. In a professional way this makes it possible to give a share to each of the partners without imposing amounts because ultimately each contributes to the extent of his means.
These contributions, most often in kind or in cash, give entitlement to shares in the SCI which correspond to the shares in the share capital. Thus, the partners share the profits and losses.
This is the ideal legal form if you want to acquire and manage real estate.
To create a real estate company, you must :
- draft the articles of association indicating the manager and the registered office of the company
- publish a notice of creation in a legal announcement journal
- Register the company in the Trade and Companies Register (RCS) at the registry of the Commercial Court.
There are 6 types of SCI: the Family SCI, the rental SCI, the allocation SCI, the shared enjoyment SCI, the construction-sale SCI (SCCV)
2. How to buy and sell in SCI?
The articles of association provide that the power to sell or buy property in SCI lies with the general meeting.
The manager must submit the resolution to the ordinary general meeting held annually, or call an extraordinary general meeting.
Sell in SCI:
To invest in SCI , no minimum share capital is required. Must:
The manager must submit the resolution to the ordinary general meeting held annually, or call an extraordinary general meeting.
Sell in SCI:
- Vote on the decision
- Collection of the tenant's approval when the property sold is rented
- Signature of a sales agreement
- Repeat of the sale by signing the final authentic deed
To invest in SCI , no minimum share capital is required. Must:
- Drafting the statutes alone or having them drafted via a notary, lawyer
- Deposit the share capital of the SCI (via a contribution or a loan), which requires opening a bank account in the name of the company
- Publish an advertisement in a legal journal
- Iregister the SCI and file it with the Registry of the Commercial Court. The registration fee is 66,88 € TTC.
3. Buy in SCI or Indivision?
Owning a property with several is more commonly done through the regime of indivision. The regime of joint ownership applies ex officio, especially in the case of a succession where the heirs are multiple.
Under the regime of indivision, each owner, each co-owner, holds a share but his rights extend over the entire property.
On the contrary, in the context of a real estate company, each partner holds shares to which his rights are limited.
4. How to declare an SCI for tax purposes? Who pays the taxes?
An SCI that carries out an industrial and commercial activity must be taxed for corporation tax in its own name. It cannot be taxed through its partners according to the share they hold in the SCI.
If the partners of individuals, companies covered by the NBC regardless of the tax regime, or those subject to the micro-BIC or BA package:
If the partners are industrial, commercial, craft or agricultural companies or enterprises covered by a real profit regime:
A savoir :
> As soon as it rents a furnished property, your SCI must file a declaration n ° 2065 and its annexes.
> The SCI must file a declaration each year no later than the second working day following May 1 N.
> The SCI subject to income tax does not pay tax directly. It is the partners, in their personal capacity, who pay taxes on the share of land income received.
If the partners of individuals, companies covered by the NBC regardless of the tax regime, or those subject to the micro-BIC or BA package:
- Each partner must declare, for his share, the income relating to this activity as property income on his declaration n ° 2044 attached to his overall declaration of income taxable to income tax.
If the partners are industrial, commercial, craft or agricultural companies or enterprises covered by a real profit regime:
- each partner must declare, for his share, the income relating to this activity according to the rules applicable to the tax regime for the taxation of his profits on his income statement (IS, BIC or BA);
A savoir :
> As soon as it rents a furnished property, your SCI must file a declaration n ° 2065 and its annexes.
> The SCI must file a declaration each year no later than the second working day following May 1 N.
> The SCI subject to income tax does not pay tax directly. It is the partners, in their personal capacity, who pay taxes on the share of land income received.
5. What can be deducted in SCI?
In an SCI, the main deductible expenses are:
- Maintenance and repair expenses (defective pipe or insulation work)
- Insurance premiums
- Recoverable charges not reimbursed (expenses incurred by the owner on behalf of the tenant and for which he has not been reimbursed)
- Provisions for condominium fees (deducted from property income for the year of payment and subject to regularization the following year)
- Improvement expenses (boiler replacement, etc.)
- Interest on loans
- Property tax with the exception of the household waste collection tax
- Management fees related to the administration of the building, the remuneration of the concierge, etc. Attention: Management fees for the purpose of renting the property are not deductible
- Relocation and eviction indemnity from a commercial lease
The SCI mainly rents empty rentals. It carries out a civil activity or furnished rentals carry out a commercial activity. Thus, by definition, SCI and furnished rentals are not compatible.
For an SCI to be able to rent furnished, it must be in one of the following situations:
For an SCI to be able to rent furnished, it must be in one of the following situations:
- Be an SCI at the IS for furnished rentals (In the case of furnished rentals, the SCI at the IS sees all its profits taxed under corporate tax. There is no distinction between rental income from an empty property and that from a furnished property)
- Limit rental income from furnished rentals (The amount of income from furnished rentals must not exceed 10% of the total amount of income generated by the SCI)
7. How to close an SCI?
Closing an SCI can result from a simple desire to stop the activity, a retirement or a dispute between partners.
In several cases, the SCI is automatically dissolved :
To dissolve an SCI, you must :
> The address of its registered office
> The day, time and place of the EGM ;
> The partners' decision to close the SCI
> Voting procedures
> Number of votes for or against
> Reminder that the company subsists for the purposes of liquidation and until its liquidation
> The identity of the elected liquidator, his obligations and powers
> Certificate of publication of the notice of dissolution
> Deed relating to the appointment of the liquidator, as well as a declaration of non-conviction and a certificate of filiation of the liquidator
Once the Société Civile Immobilière is cancelled, the partners share the remaining assets of the SCI, once the company's debts have been cleared.
In several cases, the SCI is automatically dissolved :
- The end of the duration of the SCI
- The lack of willingness of the partners to continue the activity
- The achievement or extinction of the corporate purpose of the SCI
- The dormancy of the company for 2 years
To dissolve an SCI, you must :
- Convene an extraordinary general meeting (EGM). The agenda concerns the vote on the dissolution of the SCI without activity and the appointment of a liquidator.
- Write a report of dissolution of the SCI. It must mention:
> The address of its registered office
> The day, time and place of the EGM ;
> The partners' decision to close the SCI
> Voting procedures
> Number of votes for or against
> Reminder that the company subsists for the purposes of liquidation and until its liquidation
> The identity of the elected liquidator, his obligations and powers
- Publish a notice of dissolution of the SCI in a journal of legal announcements within one month from the date of dissolution.
- File a file of dissolution of SCI on the site of the single window for transmission to the registry of the commercial court. The file must contain:
> Certificate of publication of the notice of dissolution
> Deed relating to the appointment of the liquidator, as well as a declaration of non-conviction and a certificate of filiation of the liquidator
Once the Société Civile Immobilière is cancelled, the partners share the remaining assets of the SCI, once the company's debts have been cleared.
8. SCI and inheritance tax (inheritance)
The SCI is an economic alternative to transmit assets, provided that the succession is anticipated.
In SCI the property is divided into shares. By using the principle of successive allowances, SCI partners can pass on their assets during their lifetime in order to avoid inheritance tax to the heirs.
The SCI is all the more interesting in the context where the value of all the shares of SCI is lower than the value of the building if it was held in joint ownership.
In SCI the property is divided into shares. By using the principle of successive allowances, SCI partners can pass on their assets during their lifetime in order to avoid inheritance tax to the heirs.
- Every 15 years, parents can give their children assets of up to 100,000 euros, without paying gift tax.
- When the building has a value greater than 100,000 euros, the donation can be made in tranches, each time with a maximum value of 100,000 euros, until the total transfer of SCI's shares.
- At the time of inheritance, the property already belongs to the children: the parents have not paid gift tax, the children do not pay inheritance tax.
The SCI is all the more interesting in the context where the value of all the shares of SCI is lower than the value of the building if it was held in joint ownership.