To build, establish, or even acquire a construction company in France requires being well-advised on the subject.

To optimise and secure the various operations of your project it is essential that a French lawyer who specialises in construction intervenes, as only such a lawyer will be prepared to handle the dangers and difficulties associated with this sector.

This attorneys role is then to advise you in order to help you navigate the French market and culture, turning any potential pitfalls into steps towards success.

The following are major catagories to consider:

• those issues related to the contract signed between you and the architect: the latter will often try to limit his role and his contractual responsability,
• those issues created when confronting the “French bureaucracy” (city hall, DDE, Bâtiments de France...), namely when asking for a demolition permit, subdivision permit, building permit…
• tension or disputes with construction companies,
• difficulties related to the application of French law regarding sub-contracting
• problems generated by construction costs as well as by garanties offered by different contributors,
• difficulties linked to the nature of public procurment in certain construction markets,
• the underlying risks involved in acquiring real estate.

However, these examples are only a few among many. This list does not include social issues, fiscal issues, or those concerning corporate management in creating or transfering business, all potentially problematic areas that merit consideration.

Therefore, the lawfirm of Gerard PICOVSCHI, masters of French culture and experienced in oral argumentation, litigation, and judicial matters, can advise you on ways to simplify your projects and lead you to ultimate success.

Optimising your tax and strategic options for your company– why pay more when you can pay less?

• Companies in France often bear the burden of paying a substantial amount of taxes for their employees’ accounts when conducting business in France. Our firm reduces the charges of social security taxes from 60% to 20% for company managers, partners and certain categories of personell, while maintaining the same quality of social protection and coverage.
• This can render the activity of a company in France more competitive, and ultimately paves the path to a much greater chance of success.

Optimise the choice of legal structure for your company:

We give advice on the most suitable legal structure for your company, allowing you to sell goods and services in France by creating the strongest company with limited responsibility. The risk related to the activity of your company is therefore substantially reduced.

Securing the commercial relationship

• Due to our knowledge of legal drafting, you and your company can maintain a contractual relationship with your contractors, such as agents or distributors, free of risks. For example:
• avoid being deprived of the your property rights regarding your commercial activity (for instance, having your commercial contacts and know-how appropriated by a commercial agent),
• exclude “client risks” (such as insolvability of clients, bearing the responsibility of wrongful acts committed by clients…),
• create a real commercial “process” allowing your company to succeed.

Transfer of companies

Our firm accompanies you in all negotiations and drafting of legal documents related to the acquisition of companies established in France or in the European community. It assists in making the best financial and legal choices when taking over a business and helps optimise the operation in all tax, employment and company matters.

Protecting industrial property

• We protect art, designs, and other industrial property by filing trademark, patent, and design applications.
• We prosecute all acts of infringement upon your intellectual property rights and file actions against all unfair competition activities damaging your business in France, both before the legal institutions for the protection of intellectual property or before courts.
• Our firm negotiates, secures, and drafts all agreements related to the protection and transfer of technologies.

What is a franchise contract?

A franchise contract is an agreement between two independent companies, the franchiser and the franchisee, by which the franchisee offers to its clients the sale of the goods or services of the franchiser.

The franchiser transfers his trademarks, copyrights, trade dress, technologies,  know how and technical assistance to the franchisee, and in return the franchisee pays royalties to the franchiser. The franchisee must also cover all investments necessary for the exploitation of it’s business.

Targeted companies:

Foreign and multinational companies wishing to enter the French and European market without incurring substantial costs or obligations. 

The advantages of franchising:

• Quick development of franchiser’s trademarks and minimal costs and responsibilities in French and European territory
• Cutting down on costs of publicity in the territory.
• Obtaining a competitive edge by creating a large number of franchising contracts.
• Controlling all franchising activities.

Risks to avoid with proper legal assistance:

• The franchising contract may be qualified as an employment contract or as a proxy or exclusive representation contract.
• The choice of a franchiser can be abolished by the court if it is discriminatory.
• A franchisee may transfer the franchise to any other company without prior authorization of franchiser. 
• Negotiating royalty prices and their means of payment, determining the terms of use of franchiser’s intellectual property rights, know how and technical assistance, as well as defining publicity investments, level of service and the territory and way of use of the franchise within France and the European community, are subject to special French and European laws as well as market practice.
• Any exclusivity or quasi exclusivity franchising contracts can be cancelled by court if the franchisee is not informed by the franchiser of the scope of the franchiser’s business in a manner that conforms to particular French legal procedures, or if the franchise is not limited in time. Furthermore, ending such contracts should be done in a timely manner according to special French and European rules and procedures.
• The clients of the franchisee can be qualified as its clients and not as those of the franchiser, thus preventing the latter from freely transferring the franchise to a different franchisee.

Mecanisms:

• Careful drafting of franchising contracts taking into account all aspects of the commercial context and the aims of the franchiser.
• Application of French and European laws and regulations concerning company, distribution and competition law; all methods that the law firm of Gérard PICOVSCHI has mastered.

The targeted people

• Sellers of companies: senior executives and / or partners
• Buyers of companies

Taking advantage of the situation

• To ensure the legal security of the operation
• For the seller: tax and social optimization to increase the EBIT (Earning Before Interest &

• Tax) and the business value in order to facilitate the operation
• For the seller: exoneration of capital gains (with the occasional exception)
• For the buyer: acquisition of an optimized firm from both a tax and a social point of view
• Opportunity for the buyer and the seller to avoid taxation by using Madelin contracts
• which may allocate extra pension by capitalization
• Possibility for the seller to sell his company and eventually invest the selling price,
• for instance, in a life insurance contract, which may rid the seller of inheritance
• taxes
• Possibility for the buyer to finance an acquisition by using a bullet loan linked with a
• capitalization contract

Mecanisms

• From a legal standpoint
• They are built on a perfect knowledge of tax, social and business law

The weight of demography: in 10 years, more than 450,000 French companies, representing about 2.5 million jobs should be controlled by other executives for exclusively demographic reasons. According to the INSEE, 700,000 French C.E.O.’s are 50 years old or more, representing one third of the total senior executives in France.” Enjeux – January 2003

The targeted people:

• Executive managers: chairmen and managing directors of public companies, wage-earning chairmen of certain public companies, minority or majority managers of private companies…
• Groups of employees, for example: sales force, senior managements, independant workers…
• Any employee or category of employees whom you wish to favour.

Aims

• Reduce the rate of social security costs applied to employees by about one third,  meaning from 60% to 20%.
• Example: for a certain category of employees which cost the company an “annual global cost” of 136,000 euros, the total social security costs would amount to 26,900 euros per year.
• In  reducing these costs, you can maintain social security coverage :
  • “illness / maternity” benefits are maintained.
  • “foresight” benefits are practically identical.
  • “retirement” benefits from mandatory pension schemes are theoretically dimished; the money made on social contributions will allow you to pay an annual contribution to complementary tax-deductible pension schemes.

Mechanisms:

• Change of social status within the company
• Application of tax, labour, and business law methods which the law firm of Gérard PICOVSCHI has mastered.