A SCI family (real estate company) allows members of the same family to be owners, in different proportions or not, and manage one or more real estate together, for a non-commercial purpose.
What is SCI family?
An SCI is a company in which members of the same family, who so wish, contribute a portion of a building they own, and it is then the company which becomes the owner, each contributor recovers shares in return, which correspond to its contribution. SCIs are regulated by the provisions, which are common to all companies, set by articles 1832 and following of the civil code, as well as by articles 1845 and following.
Indeed, it often happens that several people, who did not choose this at the beginning, become owners of the same property (e.g. in case of an acquisition under the separation estate system, in case of a divorce or legal separation, in the event of death…). This is when the rules of joint ownership apply. All the owners of the building must then learn to manage the aforementioned building together and agree to make mutual decisions.
However, everyone is free to leave this joint ownership at any given time: this often results in selling the aforementioned property. Otherwise, disagreement put down roots and leads to a dead end. It is therefore strongly advised to plan the constitution of a real estate company, to avoid these issues.
How does SCI work?
Two people are enough to establish an SCI.
The law does not set a maximum or a nationality condition, like in certain other forms of companies. It is even possible for a minor to be associated in an SCI because it does not have a commercial vocation.
Its lifespan is 99 years, at the most.
The statutes govern its operation. These must be drafted by a legal professional. One is usually given free rein, when it comes to the drafting, but it is important to include certain clauses relating to these, for example the extent of the manager's mandate, the majority rules during voting at meetings, at times limiting the right to vote to parents only, providing specific regulations in the event of a sale or exchange of shares, providing approvals in the event of entering or exiting the company…
Who manages the SCI?
A manager is appointed to deal with current affairs, the most important decisions being generally taken at a meeting, according to the majority set by the statutes.
In a SCI family formed only between parents and children and where the parents are co-managers, the duration of their mandate is generally not specified and terminates on their death or at the end of the SCI’s existence.
How to establish a SCI?
It shall initially be advisable to approach our usual notary to have the statutes of your SCI drawn up and this, in order to avoid any issues, as drafting these is rather sensitive. The notary will take care of all the required formalities for you: registering their constituent instrument, legal publicity, registration at the Business Formality Center…).
It should be remined that its constitution is not only reserved for the management of a family patrimony but can also be used to carry out a building construction operation, manage a professional patrimony or benefit from tax advantages.