A French company can pause its trading activity without immediately dissolving or liquidating the company. The French procedure is called mise en sommeil, or temporary cessation of activity. It can be useful when a foreign founder wants to preserve a French SAS (simplified joint-stock company), SARL (private limited liability company), SASU (single-shareholder SAS) or EURL (single-shareholder SARL) while a market, investment project or group structure is being reassessed. It is not a way to make the company disappear, and it is not a substitute for insolvency proceedings.

For an owner living outside France, the difficult part is usually not the decision to stop trading. The difficult part is selecting the correct legal route, filing the cessation through the INPI one-stop portal, proving the authority of the foreign signatory, preserving the registered office and handling the tax, social, accounting and contractual duties that survive the pause. The company keeps its registration in the RNE, the National Business Register, and remains a legal person. Its Kbis, the official company-registration extract, will show a modified situation rather than a clean closure.

This article explains how to put a French company on hold from abroad, how mise en sommeil differs from dissolution, what a foreign founder should prepare before filing, and how to manage the two-year risk of an administrative strike-off. It focuses on corporate companies and does not address an individual moving to France or buying property. For the wider incorporation and structuring context, see the firm’s French company formation and corporate structuring service.

I. Can a foreign founder put a French company on hold without moving to France?

A. What is mise en sommeil, and when is it preferable to dissolution?

Mise en sommeil is a temporary suspension of the company’s business activity. The company does not sell, invoice or actively operate during the declared period, but it continues to exist. The official INPI, the French National Institute of Industrial Property, describes the procedure as allowing a company to interrupt its activity for a limited period “sans être dissoute ni radiée”, meaning without being dissolved or struck off. The complete official explanation is available on INPI’s page on temporarily closing a company. This is the correct starting point for a foreign founder who needs a pause rather than an exit.

The legal effect is a declared cessation of activity, not a disappearance of the legal entity. Article R. 123-69 of the French Commercial Code expressly includes “La cessation totale ou partielle d’activité … même en l’absence de dissolution”. In English, that means a total or partial cessation must be declared even when the company is not being dissolved. Read the current text on Légifrance, Article R. 123-69 of the Commercial Code. This rule is why a founder should not simply stop issuing invoices and leave the Kbis unchanged.

The procedure is suitable when the company is solvent and the commercial pause has a credible explanation. Examples include a foreign group delaying a French launch, a founder waiting for a financing round, a seasonal or regulated business awaiting a licence, a temporary illness of a key manager, an internal reorganisation, or a project that may restart after a defined period. It can preserve the company’s name, history, contractual framework and registration while the shareholders decide what to do next.

The procedure is not appropriate when the company cannot pay its due debts with its available assets. Article L. 631-1 of the Commercial Code defines cessation of payments as “l’impossibilité de faire face au passif exigible avec son actif disponible”. The official provision is on Légifrance, Article L. 631-1. A foreign parent cannot protect a French subsidiary from creditors merely by filing a temporary cessation. If payroll, tax, rent, suppliers or bank debt cannot be paid as they fall due, the director must assess insolvency immediately.

The 45-day rule is equally important. Article L. 631-4 provides that a debtor must request the opening of a reorganisation or liquidation procedure within 45 days of cessation of payments, unless a conciliation procedure has been requested within that period. The official text is available on Légifrance, Article L. 631-4. A “pause” must therefore be preceded by a short solvency review: bank balances, due invoices, tax and social arrears, employee liabilities, loans, guarantees and disputed claims. If the review is negative, an insolvency lawyer and the competent court route take priority over the INPI form.

Dissolution and liquidation serve a different purpose. A voluntary dissolution is the shareholders’ decision to end the company’s life; the liquidator realises assets, pays creditors and distributes any remaining balance before the final radiation. A TUP, or transmission universelle du patrimoine, is a simplified transfer of all assets and liabilities to a sole corporate shareholder, subject to its own conditions and creditor-opposition period. The decision-tree article for a definitive exit is available here: How to close a French company from abroad. A company that may return to business should not use dissolution simply because the founder is abroad.

The distinction also protects directors against an inaccurate registry record. Article R. 123-66 states that a legal person must request a modifying registration through the single body within one month of an act or fact requiring a correction or addition to the registered information. The official text says: “Toute personne morale immatriculée demande … une inscription modificative dans le mois”. See Légifrance, Article R. 123-66. The deadline runs from the decision or event, not from the date on which the founder next visits France.

INPI’s public guidance states that the legal representative decides the temporary cessation, and that a shareholders’ meeting is optional unless the articles of association require one. That does not mean that a president or manager may ignore the shareholders’ agreement, a reserved-matters clause, a financing covenant or a group approval matrix. A foreign-owned SAS may have a board or shareholder consent requirement in its articles. A SARL may require a shareholder resolution under its governance documents. The safest record is a written decision that identifies the legal representative, the effective date, the commercial reason in neutral terms, the absence of cessation of payments and the authority to complete the filing.

The maximum period must be treated as a project deadline, not a vague target. For a company, the registry rules create a two-year horizon after the mention of total cessation. Article R. 123-130 provides that, after two years without a modifying entry recording a resumption, the registrar may, after notice by registered letter to the company’s registered office, proceed with an automatic strike-off. Its wording begins: “Lorsque le greffier … constate, au terme d’un délai de deux ans … l’absence de toute inscription modificative relative à une reprise d’activité”. The official provision is on Légifrance, Article R. 123-130. The legal representative should calendar the two-year date on the day the filing is made.

The public INPI explanation also warns that the company may be struck off if no step is taken at the end of the period. That risk is not a convenient administrative shortcut. Strike-off can complicate bank access, contracts, tax correspondence, asset transfers, litigation, recovery of receivables and a later restart. It may also cause a foreign parent to discover that a French entity has disappeared from a registry when the group is preparing a financing or acquisition. A planned dissolution is cleaner when the business will not return.

French case law confirms that dormancy is not identical to a legal impossibility to operate. In Cour de cassation, Commercial Chamber, 23 March 2010, docket no. 08-22.073, the Court rejected reasoning that did not establish “l’impossibilité pour la société de fonctionner normalement”. The decision matters for a foreign founder because a company in sleep remains an entity with a manager, assets, creditors and governance duties. The filing does not itself prove that the company is dead, and it does not itself justify a dissolution order.

A second decision illustrates the cost of confusing temporary suspension with termination. In Cour de cassation, Civil Chamber 2, 17 November 2016, docket no. 15-24.271, the Court held that expenses caused by a forced temporary suspension could be a loss connected to the underlying event and “ne se confondait pas avec la perte de valeur de la société”. The case concerned compensation, not a foreign-founder filing, but it reinforces the practical point: temporary cessation has its own costs and legal consequences; it is not the same as liquidating the company’s value.

B. What must the foreign founder decide before filing the temporary cessation?

The first decision is whether the French entity itself is stopping, or only one establishment. A company may have a principal establishment in France and one or more secondary establishments. “Establishment” means a business location or operational unit, not a separate legal person. The INPI instructions state that an active secondary establishment may need to be closed before the company’s temporary cessation can be validated. Check the RNE record, the Kbis, leases, tax registrations, licences and the actual activity of every site. A French branch of a foreign company follows a different logic from a French subsidiary, so the parent’s structure must be identified before the form is opened.

The second decision is the effective date. The date should correspond to the last day on which the company genuinely stopped the declared activity, or to a future date when the decision is clearly prospective and the company will continue trading until then. Do not choose a date that conflicts with invoices, payroll, stock movements, a VAT return, a tax filing or a contract termination. Create a short evidence file showing the board or shareholder decision, the final trading date, the last invoice, the last employee or supplier action and the bank statement around the date. This makes the tax and accounting transition easier to explain.

The third decision concerns ongoing contracts. A company in sleep remains liable for rent, insurance, bank charges, software subscriptions, storage, accounting fees, loan repayments, guarantees, litigation costs and contractual notice periods. A commercial lease may contain a continuous-operation covenant. The official Service Public Entreprendre guidance on a company’s temporary cessation notes that a commercial lease can raise a risk of termination or non-renewal when the contract requires uninterrupted operation. Review the lease before closing the premises or cancelling insurance. A registered office must continue to receive official letters, including a registered letter from the greffe.

The fourth decision concerns employees. Mise en sommeil does not cancel employment contracts by itself. A company with employees may need to maintain wages, declarations, social contributions, occupational obligations and employee information, or to use a lawful restructuring route before stopping the activity. The director should ask the payroll provider for a written plan and check whether a declaration sociale nominative, or DSN, remains due. DSN means the monthly social-security data return sent electronically to the French authorities. Stopping payroll software without confirming the company’s status can create arrears and penalties.

The fifth decision concerns the director’s status. The director remains the legal representative, with authority and duties, even when the company has no turnover. A president of an SAS is normally treated under the general social-security system when paid; a majority manager of a SARL may be a TNS, or travailleur non salarié, a self-employed director subject to a different contribution regime. The result depends on the legal form, ownership, remuneration and actual role. The absence of a salary does not automatically end every social obligation.

In Cour de cassation, Civil Chamber 2, 15 March 2018, docket no. 17-13.619, the official decision reproduces the proposition that “Une société est mise en sommeil lorsque … elle déclare sa cessation d’activité, sans toutefois procéder à sa dissolution” and then explains that the company continues to exist. The case concerned a manager’s social-security affiliation and the Court’s procedural ruling was a cassation for inadequate reasoning. It remains a useful warning: a foreign founder should not assume that a dormant company automatically removes the director from the French social-security system.

The sixth decision concerns the company’s balance sheet and assets. List cash, receivables, inventory, intellectual-property rights, vehicles, equipment, loans, pledges, guarantees, shareholder current accounts and intercompany balances. An entity without sales can still own valuable software, a domain name, shares or a receivable from its foreign parent. A pause should include a protection plan for those assets. Review bank mandates, online access, two-factor authentication, the registered email address and the person who can receive French tax or registry correspondence. A foreign director who loses access to a French bank account may need an in-country mandate while remaining responsible for the company.

The seventh decision is whether the company can still meet its administrative calendar. Mise en sommeil does not eliminate annual accounts, the annual approval meeting or every tax return. The director should compare the pause with the group’s legal-calendar tool and assign a named person in France or abroad for each deadline. The file should specify who can instruct the French accountant, who can approve a payment, who can answer the service des impôts des entreprises (SIE, the business tax office), and who can correct an INPI request.

Finally, decide how the company will restart. A restart plan should state the target business, the intended date, the director and shareholder approvals required, the premises, the bank, insurance, licences, employees, VAT position and first invoice. If the business has changed, the company may need a modifying filing rather than a simple resumption. A restart plan also protects the company from reaching the two-year limit with no action. If a return is unlikely, compare an orderly dissolution with allowing an automatic strike-off. The latter leaves less control over assets, notices and the final tax record.

II. How do you file and manage a French company’s mise en sommeil from abroad?

A. How do you use the Guichet unique, INPI and a foreign mandate?

French company formalities now pass through the electronic Guichet unique, the one-stop portal for business formalities. Article L. 123-33 of the Commercial Code requires a company to file one electronic dossier for its creation, modification or cessation, and says that the dossier is submitted to a single body. The official wording states: “Ce dossier est déposé par voie électronique auprès d’un organisme unique”. Read Légifrance, Article L. 123-33. For a company abroad, this means the director or authorised agent can prepare the filing remotely, but the evidence and electronic signature still need to be organised in advance.

The practical sequence is as follows. First, log into the INPI e-procedures portal using the account and authentication route available to the declarant. INPI explains that FranceConnect+ or INPI Connect may be used, and that INPI Connect can require an advanced electronic signature based on a qualified certificate. Second, identify the company by its SIREN, the nine-digit business identifier, and open the modification or cessation workflow. Third, select the option showing that the company is not being dissolved and that the legal person is not disappearing. Fourth, enter the effective cessation date, close any relevant establishment, upload the requested documents, validate the summary, sign the form and pay any applicable fee.

The form’s wording matters. INPI’s instructions direct the declarant to answer “Non” to the questions asking whether the operation is a dissolution and whether it is a disappearance of the legal person. A foreign founder should save a PDF of the final summary before signature. The summary should show the company name, SIREN, legal form, registered office, establishment status, cessation date and declared nature of the operation. Do not sign a draft while the portal still shows a dissolution, a radiation or an incorrect establishment.

Prepare the following file before opening the form:

• the latest Kbis or RNE extract and the company’s SIREN;
• the articles of association and any shareholders’ agreement relevant to the decision;
• the signed decision of the president, manager, sole shareholder or competent corporate body;
• the identity and authority evidence for the French legal representative;
• if an agent files, a specific mandate describing the company, the temporary cessation and the power to complete, sign, pay and correct the filing;
• the foreign shareholder’s registry extract and corporate approval where the shareholder’s authority affects the decision;
• information about principal and secondary establishments, employees, premises and regulated activities;
• a payment method and an email address monitored after the filing; and
• a calendar entry for the two-year deadline, the accounting year-end and every tax or social obligation that remains.

The mandate should be narrower and more useful than “all formalities”. Name the French company, the SIREN, the effective date, the operation described as temporary cessation or mise en sommeil, the portal, the power to upload documents, the power to sign electronically where legally possible, the power to pay fees, and the power to receive and answer a request for regularisation. If the agent is not authorised to sign the company’s substantive decision, say so. The company’s president or manager should sign that decision separately. This two-document structure separates corporate authority from administrative filing authority.

Foreign documents create a second layer of proof. A corporate shareholder may need to provide a current registry extract, a board resolution and a certified translation if the recipient cannot read the original language. The need for an apostille or legalisation depends on the country and the requested document. Keep the source document, translation, certificate and signature report together. The portal may accept a PDF while the registry, bank or tax office later requests evidence of the signatory’s authority. A clean file avoids having to reconstruct the corporate chain after the company has stopped trading.

Electronic signature evidence deserves its own folder. Keep the signed final PDF, the certificate or trust-service report, the timestamp, the identity-verification record, the portal receipt and the payment receipt. A simple image of a handwritten signature pasted onto a PDF may not prove who signed or whether the content was altered. The Civil Code provides that electronic writing can have the same evidentiary force as paper where the author can be identified and integrity is preserved. Article 1366 states: “L’écrit électronique a la même force probante que l’écrit sur support papier”. See Légifrance, Article 1366 of the Civil Code. Article 1367, available at Légifrance, Article 1367, addresses the electronic signature and reliable identification.

After submission, monitor the dashboard rather than assuming acceptance. INPI states that an incomplete or irregular dossier can be placed in a regularisation queue, with a request sent by email. The authority, not the declarant’s accountant, makes the final validation. Save the status at each stage: draft, signed, paid, transmitted, awaiting regularisation, accepted or rejected. If a correction is requested, answer through the portal and preserve the new summary. Do not create a second competing filing without understanding the first one, because it can create inconsistent dates or duplicate registry entries.

Once the filing is accepted, order an updated Kbis or registry extract and check the RNE record. The cessation should appear as a modifying entry. INPI also states that the declaration produces an automatic insertion in the BODACC, the official bulletin for civil and commercial announcements, making the temporary cessation opposable to third parties. “Opposable” means that suppliers, banks, contracting parties and other third parties are expected to be able to rely on the published situation. Send the updated extract to the bank, accountant, insurer and any counterparty that needs to know whether the company is trading.

The registered office must remain operational. A registered letter from the greffe, a tax notice, a creditor claim or an INPI regularisation request can arrive after the founder has left France. Keep a reliable forwarding arrangement, monitor the company’s email, renew the domiciliation contract and give the agent authority to alert the director. A foreign founder who closes the office, cancels the mail service and loses the company’s login credentials may miss the letter that precedes an automatic strike-off.

The filing also has a group-governance consequence. The foreign parent’s internal register should show the decision date, the French company’s status, the person responsible for the next annual accounts and the date on which the restart or closure decision must be revisited. The parent should not describe the French subsidiary as “closed” in a board paper or lender certificate when the official position is temporary cessation. Consistent wording avoids misrepresentations in a financing, audit or acquisition process.

B. Which tax, social, accounting and restart duties survive the pause?

The most common error is to treat zero turnover as zero compliance. INPI’s official consequences list says that a company in temporary cessation remains subject to several obligations. The company retains its registration, continues to exist, and must preserve enough administration to prove its status. The exact filing position depends on the tax regime, financial year, employees, transactions and instructions from the relevant tax office, but the baseline should be conservative: a pause requires a written tax calendar, not silence.

For corporate income tax, IS means impôt sur les sociétés, the French corporate income tax. INPI states that a company in sleep must submit a results declaration even when it has no profit, using the mention “néant”, meaning nothing. The same guidance explains that VAT, or taxe sur la valeur ajoutée (TVA), declarations and payment may be suspended during the period of inactivity, but that the company must verify the applicable status and any residual transactions. The current official tax guidance should be checked with the SIE, the service des impôts des entreprises, especially where the company is part of a VAT group, has imports, owns stock or has taxable transactions after the cessation date.

The statutory tax framework remains relevant. Article 209 of the General Tax Code identifies the taxable profits used for corporate income tax; see Légifrance, Article 209 of the General Tax Code. Article 223 governs the corporate income tax return and the related declaration obligations; see Légifrance, Article 223. Article 287 sets the VAT declaration framework; see Légifrance, Article 287. These references do not mean that every dormant company files the same forms. They mean that the accountant must map the company’s actual tax regime and record why a return is filed, marked nil or not required.

CFE means cotisation foncière des entreprises, the French local business-property contribution. It is not automatically cancelled on the first day of the pause. The official tax authority answers that the company remains liable while inactivity has not reached 12 consecutive months and that a 12-month suspension is treated as a cessation for CFE purposes. The current page, modified by the tax authority, is impots.gouv.fr’s answer on CFE during temporary cessation. The accountant should review the establishment, minimum CFE, reference period, local authority and any exemption rather than assuming that no premises means no CFE.

Social obligations depend on the director and the staff. The legal representative does not disappear when the company goes quiet. A TNS director may continue to owe minimum contributions even without revenue. A director under the general system may have a different result when there is no remuneration, but the company must keep the analysis and any declarations. The official INPI guidance says the director remains affiliated to the usual social regime and that employee-related contributions continue where employees remain. This is why the foreign parent should obtain a written position from the payroll provider or social-security adviser before stopping payments.

The 2018 Supreme Court decision cited above demonstrates the risk in concrete terms. In docket no. 17-13.619, the reproduced reasoning states that the company continues to exist and that “Même en l’absence de revenus une cotisation minimale est due” for the manager’s situation considered in that case. The Court ultimately ruled on the inadequate reasoning of the lower decision, so the passage should not be turned into a universal calculation for every director. It does, however, show why the legal form, shareholding, remuneration and actual affiliation must be checked before a foreign founder stops a French social account.

Accounting duties also continue. Article L. 232-1 of the Commercial Code requires companies to prepare annual accounts at the end of each financial year. The official text is available through Légifrance, Article L. 232-1. INPI’s guidance states that a company in sleep must prepare and file annual accounts and hold the annual approval meeting. The absence of turnover may simplify the accounts, but it does not remove the financial statements, the notes required by the company’s situation, the approval decision or the filing evidence.

After the shareholders approve the accounts, the filing deadline remains active. Article L. 232-22 contains the filing route for SARLs, including the one-month period and the two-month electronic period, and is available at Légifrance, Article L. 232-22. Article L. 232-23 applies to the companies covered by its text, including many joint-stock companies, and is available at Légifrance, Article L. 232-23. A dormant company should therefore retain an accountant or another competent person, hold the annual decision remotely when permitted, and file the accepted accounts through the electronic route.

The company should distinguish three documents: the accounts, the approval decision and the registry filing. The accounts describe the financial position. The approval decision records the shareholders’ or sole shareholder’s action and the allocation of the result. The filing proves that the registry received the documents. Keeping only the final PDF without the authority, notice, signed minutes, portal receipt and acceptance notice leaves a gap that can surface during a bank review or a dispute.

Ongoing litigation and creditors also survive the pause. A dormant company can be sued, can recover a debt, can receive a tax audit and can be asked to perform an existing obligation. The director should maintain an address for service, renew legal-expense insurance where appropriate, preserve evidence and instruct French counsel when a court deadline is running. The 2010 decision in docket no. 08-22.073 is a useful reminder that a company’s lack of activity, by itself, did not establish that it was unable to function normally. A company that ignores a lawsuit because it is “on hold” creates a new risk that the filing did not remove.

At the same time, the company should not restart informally. Before the first new invoice, check whether a resumption filing is required, whether the registered activities are still accurate, whether the VAT number and tax status are active, whether the bank and insurance are ready, whether employees need to be rehired or consulted, and whether a licence or professional qualification must be renewed. Use the Guichet unique to declare the resumption or the relevant modification, keep the confirmation and update the Kbis. A restart date should be coherent across the RNE, tax records, bank, contracts and accounting system.

If the company will not restart, compare a voluntary dissolution, liquidation and radiation with the consequences of waiting for the registry deadline. Voluntary closure lets the shareholders choose the liquidator, settle contracts, collect receivables, pay liabilities and document the final tax position. Automatic strike-off does not release the company from debts, does not erase director exposure and may leave assets or claims badly administered. The right route depends on solvency, assets, shareholders, creditors and the parent’s tax position.

A foreign founder can run this process as a controlled cross-border project. The minimum dashboard should contain the INPI filing number, effective cessation date, accepted RNE entry, updated Kbis, BODACC publication, registered-office arrangement, bank access, accountant’s tax calendar, director’s social position, annual accounts date, employee status, contract review, litigation list and two-year restart-or-close decision. Every item should have an owner and a next date. That is more reliable than a single calendar reminder saying “French company dormant”.

On the legal side, the file should contain the solvency check, the corporate decision, the mandate, foreign authority evidence, the signed portal summary, the payment receipt, the acceptance notice and the registry extract. On the commercial side, it should contain the last transaction, outstanding invoices, customers informed where needed, supplier and lease analysis, insurance, intellectual property, bank and data access. On the tax and social side, it should contain the IS and TVA position, CFE review, payroll instructions, director affiliation analysis and annual-accounts plan. This division makes it easier for a foreign parent, a French accountant and a French lawyer to act without duplicating or contradicting each other.

Finally, record the date of every official message. If the INPI dashboard requests regularisation, if the greffe sends a registered letter or if the tax office asks for a declaration, the response deadline may be short. A company that has no commercial revenue can still be exposed to a missed legal deadline. Remote management works when the evidence, authority and calendar are designed before the filing, not when the founder tries to reconstruct them after a rejection.

Conclusion

A foreign founder can put a solvent French company on hold without travelling to France by declaring a mise en sommeil through the INPI Guichet unique. The company remains registered and continues to exist; it is not dissolved, liquidated or automatically free from tax, social, accounting, contractual or litigation duties. The filing should follow a written corporate decision, a solvency check, an authority and mandate file, a correct cessation date and a reliable electronic-signature trail.

The two-year deadline must be visible from the start. During the pause, preserve the registered office, monitor the Kbis and BODACC, manage IS, TVA and CFE, confirm the director’s social position, prepare annual accounts, protect assets and maintain a plan either to resume through the Guichet unique or to close voluntarily. If the company cannot pay its due debts, temporary cessation is not the answer: the insolvency rules must be assessed immediately.

Need a quick opinion on your case

Need a fast review of a French company that has stopped trading, an INPI filing problem or a cross-border corporate decision? A telephone consultation can be arranged within 48 hours with a lawyer from the firm.

We can review the company’s legal status, supporting documents and next filing step. Call +33 6 46 60 58 22 or use the contact form.