FRELA provides comprehensive assistance in creating Real Estate Investment Trust (REIT) and drafting their articles of association.
Company Law: The REIT (SCI)
The REIT (Real Estate Investment Trust) or Real Estate Management Company is a civil company in which the partners (owners) hold shares in the company. The real estate properties are purchased by the REIT and are owned by the company.
An REIT is a company whose purpose is real estate. To create an REIT, it is necessary to establish the company like any other business in France.
The REIT offers advantages for the purchase of real estate properties that are shared among multiple family members or a group. All partners of the REIT will have voting rights based on their shares for the management and future tax optimization of the company.
The REIT allows, with the drafting of an appropriate bylaw, to stipulate the rights of each partner concerning the real estate property and the terms of sale. The REIT also enables the optimization of the taxation of the acquired property, including maintenance and renovation costs, future rental income, as well as during successions and donations.
Note: An REIT that engages in commercial activities (such as furnished rentals or regular real estate trading) will become subject to corporate tax.
FRELA assists you in the development and legal review of your REIT creation:
- Drafting the articles of association
- Registration of the articles of association with the CFE (Center for Business Formalities)
- Publication of the legal notice in a JAL (Journal of Legal Announcements)
- Registration with the Commercial Court Registry
- Tax advice regarding the choice between corporate tax or income tax
The articles of association of Real Estate Investment Trusts (REIT) must be carefully drafted.
Real Estate Investment Trusts (REIT) are companies whose purpose is to manage real estate assets. The articles of association of the REIT must be drafted with care to precisely define the corporate purpose, management procedures, and operating rules of the company.
Here are the key elements to include in the articles of Real Estate Investment Trusts of association in France:
Corporate name: The articles of association must specify the corporate name of the REIT, which must be unique and not already used by another company in France.
Corporate purpose: The articles of association must specify the corporate purpose of the REIT, which should be limited to the management of real estate assets.
Registered office: The articles of association must specify the registered office of the REIT, which is the address where the company is domiciled.
Duration: The articles of association must specify the duration of the REIT, which can be limited or unlimited.
Share capital: The articles of association must specify the amount of the share capital of the REIT, which can be variable or fixed.
Shareholders: The articles of association must specify the number of shareholders of the REIT, as well as their names and contributions.
Transfer of shares: The articles of association must specify the rules applicable to the transfer of shares, such as sales procedures, shareholders’ preemption rights, etc.
Management: The articles of association must specify the procedures for appointing and revoking the manager(s) of the REIT, as well as the powers conferred upon them.
Decision-making: The articles of association must specify the procedures for decision-making within the REIT, including the majority rules applicable to shareholders’ votes.
Annual accounts: The articles of association must specify the procedures for preparing the annual accounts of the REIT, as well as the rules for profit distribution.
Collective resolutions: The articles of association must specify the procedures for convening and holding general meetings of the shareholders of the REIT.
Special provisions: The articles of association may also contain special provisions, such as approval clauses, clauses for the exclusion of shareholders, preference clauses, etc.
In summary, the articles of association of Real Estate Investment Trust in France must include specific provisions regarding the corporate purpose, share capital, shareholders, management, decision-making, annual accounts, collective resolutions, and special provisions. It is essential to engage a real estate transactions lawyer who will draft clear and comprehensive articles of association to facilitate the management of the company and limit the risk of disputes between shareholders.
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