You hired your first employee in France while running the company from abroad, and the arrangement worked until the business reason disappeared. Now you want to close the French company, and you assume the employment contract ends with it automatically. It does not. In French law, shutting down the company and dismissing the employee are two separate procedures that must be run in the right order, and the second one cannot be skipped, shortened or handled with a foreign-style severance letter. As long as the employee is still on payroll, the company keeps living for social-security and tax purposes, the final strike-off from the company register stays out of reach, and every procedural mistake converts into damages before the labour court (conseil de prud’hommes, the French employment tribunal). The good news is that closing the business gives you a recognised legal ground for the dismissal, and that the whole sequence can be managed from outside France if you respect the summons periods, the mandatory documents and the payment order described below.
This guide is written for the foreign founder, director or group manager who must dismiss one or more employees because the French activity is stopping, whether the vehicle is an SAS (société par actions simplifiée, the simplified joint-stock company), an SARL (société à responsabilité limitée, the limited liability company) or a registered branch (succursale) of a foreign company. It covers the individual dismissal of a small team, which is the usual situation for a foreign-owned structure, rather than the mass-layoff plans of large employers, which follow heavier collective rules. You will learn why the cessation of activity justifies the dismissal and where its limits lie, which redeployment and support duties survive even when the company is dying, how to run the summons, meeting and notification steps from abroad, what to pay and which papers to hand over, and how the clean payroll file unlocks the dissolution, liquidation and strike-off (radiation, the removal from the Registre du commerce et des sociétés, the Trade and Companies Register, shortened to RCS). Each rule below is linked to its official source so your adviser can check it. If the employee is still in their trial phase, read our companion on ending a trial period from abroad instead, because a simpler regime applies; and if you are still weighing whether to keep the French vehicle at all, start with how to choose between an SAS, a SARL, a branch and a subsidiary when investing from abroad.
I. Why stopping the French activity lets you dismiss, and which duties survive the shutdown
The first question a foreign employer asks is whether closing the company is enough, on its own, to end the contracts. The answer is yes as a matter of principle, but strictly framed. French law defines the economic dismissal as a dismissal for reasons unrelated to the employee that result from the elimination or transformation of a job or from a refused change to an essential contract term, following among other grounds the cessation of the activity of the company, in Article L1233-3 of the Labour Code. The cessation ground sits alongside economic difficulties, technological change and reorganisations to protect competitiveness, but it is the only one that requires no financial justification: you do not have to prove losses or falling orders when the activity itself is ending. The Court of Cassation confirmed the reading on 20 September 2023 in a widely noted social-chamber ruling (No. 22-13.485), holding that the complete and final cessation of the activity of the company is in itself an economic ground for dismissal, in Cass. soc., 20 Sept. 2023, No. 22-13.485. That decision is the cornerstone of every closure-driven dismissal file.
Three adjectives carry the whole weight of the rule, and a file run from abroad must prove each of them. The cessation must be complete, meaning every activity of the French entity stops, not only the department where the employee worked while the rest continues under another name. It must be final, meaning no resumption is planned, no transfer of the business as a going concern is quietly arranged, and no new hiring follows the dismissal. And it must be genuine, meaning the closure is not organised to get rid of the employee: where the shutdown results from the deliberate fault of the employer, for example a group that starves its French subsidiary to manufacture the closure, courts can still find the dismissal without real and serious cause and award damages. Keep the evidence that the closure is real and total: board or shareholder minutes deciding the cessation, the notice terminating the commercial lease (bail commercial), correspondence ending supplier contracts, the resignation or termination of the client portfolio, and the parallel corporate steps dissolving the company. A labour judge seized two years later will read those documents first, so date them before the dismissal letters go out, not after.
A. The two duties that survive even a dying company: look for another post, and offer the secure-career contract
Closing does not exempt the employer from trying to keep the employee in work. An economic dismissal can only happen after training and adaptation efforts have been made and after redeployment (reclassement) has proved impossible on the jobs available, located on national territory, in the company or in the other companies of the group to which it belongs where organisation, activities or operating location allow staff transfers, in Article L1233-4 of the Labour Code. For a foreign owner this definition matters enormously, because the search area is France, not the world: posts available in the London, New York or Dubai entities of the same group do not count, and the employee cannot demand them, while every suitable open post in the French company and in the French entities of the group must be offered in writing, precisely described, with pay, location and classification. In a single-company SAS with one employee and no sister companies in France, the search is short but it must still be documented: list the available posts (usually none), send the written offers where a post exists, and keep copies of the replies or of the recorded absence of posts. The most common prud’hommes award in closure files punishes exactly this omission, an employer who assumed that closing meant skipping the redeployment letters.
The second surviving duty concerns the secure-career contract (contrat de sécurisation professionnelle, shortened to CSP), the publicly funded return-to-work programme offered to employees dismissed for economic reasons by companies with fewer than one thousand employees, which covers virtually every foreign-owned French structure. The CSP organises a supported path back to employment, possibly through retraining or business creation, starting with a skills assessment and a career plan, in Article L1233-65 of the Labour Code. The employer must offer it in writing during the procedure, and the employee has twenty-one days to accept; acceptance itself ends the contract by mutual mechanism, without notice but with the severance and any contractual indemnities preserved, while disputes over the termination are time-barred after twelve months from acceptance where the deadline was mentioned in the offer, in Article L1233-67 of the Labour Code. From abroad, the practical points are to order the current CSP information leaflet and offer form from the France Travail (the public employment operator, formerly Pôle emploi) guidance for employers, to attach them to the procedure at the right moment, and to calendar the twenty-one days rigorously, because a missing or late CSP offer can invalidate the subsequent dismissal. Employees with at least the required seniority who decline the CSP are dismissed under the standard economic procedure with their notice period; those who accept leave faster but cost the employer the CSP employer contribution, a point to budget discussed below.
B. Running the summons, meeting and notification from abroad without breaking the timetable
The individual economic dismissal follows a rigid three-step choreography, and distance makes each step harder but none of them optional. First, the employer invites the employee to a preliminary meeting (entretien préalable). The invitation goes by registered letter or hand-delivered letter against receipt, states its purpose, and the meeting cannot take place less than five working days after presentation of the registered letter or hand delivery, in Article L1233-11 of the Labour Code. For an owner outside France, the registered letter with acknowledgement of receipt (lettre recommandée avec accusé de réception, LRAR) sent to the French address remains the reference method; electronic registered delivery exists but its evidential value depends on the employee having consented to that channel, so paper LRAR is the safer default when the relationship is ending. The five working days run from presentation, not from sending, so add international and domestic postal margins and never schedule the meeting by counting from the posting date. At the meeting, the employee may come with a staff representative or, where the company has none, an outside adviser from the official list; the foreign manager can attend by video where the employee agrees, or mandate a person in France, such as the accountant or counsel, with a written power of attorney, to conduct it. The meeting must genuinely discuss the redeployment and CSP documents, not simply announce a decision already taken.
Second, after the meeting, a cooling period applies before the dismissal can be notified, and the notification letter itself must contain specific mentions. The dismissal letter states the economic reasons relied upon and must also mention the rehire priority (priorité de réembauche) and its conditions, with ministerial templates available as models, in Article L1233-16 of the Labour Code. In a closure file the stated reason is the complete and final cessation of the activity with its date and consequences for the job, plus the outcome of the redeployment search and the CSP proposal; vague references to restructuring or to the group strategy invite challenge. The rehire priority gives the dismissed employee a one-year right to be informed of available posts compatible with their qualifications, which matters even in closure because a group that keeps another French entity must honour it. Send the notification by LRAR, keep the receipt and the tracking record, and diary the employee’s twelve-month deadline to challenge the dismissal, since most closure disputes arrive in the eleventh month. Where several employees are dismissed within thirty days, count them carefully: reaching ten dismissals triggers the collective procedure with administration involvement (plan de sauvegarde de l’emploi), a different universe that a small foreign structure should plan headcount to avoid unless genuinely unavoidable.
II. Paying everything, handing over every paper, and only then striking the company off
A dismissal that is valid on paper still fails if the money is short or the exit documents are missing, and in a closure the two questions merge: the company cannot be cleanly liquidated while wage debts, severance or social contributions remain unpaid, and the liquidator who distributes cash to shareholders before settling the employees answers for it personally. Budget the full exit cost before starting, because French exit tickets surprise foreign owners: severance, notice, paid leave, the CSP employer contribution where applicable, and the final payroll charges easily reach several months of salary for even a short-serving employee. Paying late or in the wrong order creates the exact liabilities the closure was meant to extinguish.
A. What the last payslip must contain: severance, notice, leave, final balance and social filings
The statutory severance (indemnité légale de licenciement) belongs to every employee on an open-ended contract (contrat à durée indéterminée, shortened to CDI) dismissed with at least eight months of uninterrupted seniority, except for serious misconduct, with calculation methods based on prior gross pay set by regulation, in Article L1234-9 of the Labour Code. The regulatory scale grants at least one quarter of a month of salary per year of service for the first ten years plus one third of a month per year beyond ten years, counting complete months beyond full years proportionally, in Article R1234-1 of the Labour Code. Many sector agreements (conventions collectives) and individual contracts grant more generous contractual severance, which stacks on top of the legal minimum rather than replacing it, so read the applicable agreement before computing: the Syntec, commerce or métallurgie scales frequently double the legal floor. Notice (préavis) follows, with a duration set by the agreement or custom, worked or paid in lieu with the corresponding compensation, except where the employee joined the CSP, whose termination mechanism carries no notice by design. Add the indemnity for unused paid leave (indemnité compensatrice de congés payés), any pro-rata bonus or thirteenth month, and, where the employee accepted the CSP, the employer contribution versed to France Travail, whose current rate and ceiling must be checked at the time because they change by agreement.
The paperwork at exit is as mandatory as the money. At the end of the contract the employer delivers a work certificate (certificat de travail) whose content is set by regulation, in Article L1234-19 of the Labour Code, covering identity, dates, positions held and hours where relevant. The employer also delivers to the employee, at expiry or termination, the certificates needed to claim unemployment benefits and transmits them to France Travail without delay, electronically for employers with at least eleven employees, in Article R1234-9 of the Labour Code; in a closure with a single employee this attestation employeur is the document the former employee needs to register, so transmit it the same week and keep the proof of filing. Finally, the employer draws up the final balance receipt (solde de tout compte), an inventory of every sum paid at termination, acknowledged by the employee, which can be challenged within six months of signature and becomes conclusive for the listed sums after that period, in Article L1234-20 of the Labour Code. From abroad, organise the signatures pragmatically: the balance receipt requires the employee signature, so arrange a meeting in France through the mandatary or use a compliant electronic signature, and never close the payroll file without the signed copy. In parallel, the last monthly payroll return (déclaration sociale nominative, shortened to DSN) must be filed with URSSAF (the body collecting social-security contributions), the employer account closed, and any balance paid, because URSSAF pursues foreign-based employers through European recovery channels and an unpaid balance blocks the tax clearance the liquidator needs.
Diary two dates the day the notification goes out. The rehire priority runs for one year and obliges any remaining French entity of the group to inform the former employee of compatible openings, so circulate the name to the group HR contact and keep proof that you did. The employee has twelve months to challenge the dismissal before the labour court, and closure files are typically challenged late, once the former employee realises the activity continued under another brand or a successor company hired for the same job. Archive the summons letter with its receipt, the meeting notes, the redeployment letters with replies, the CSP offer with the delivery proof, the notification letter, every payslip and the signed final balance receipt for the full limitation period, in practice at least a year beyond the challenge deadline and longer where accounting rules require it.
B. From clean payroll to dead company: dissolve, liquidate and obtain the strike-off
Only with the contracts ended, the money paid and the social account closed should the corporate shutdown be launched. The shareholders vote the early dissolution and appoint a liquidator, the minutes are registered with the tax office, a dissolution notice is published in a legal announcements journal (journal d’annonces légales, shortened to JAL), and a single filing is made on the Guichet unique (the Single Formality Portal operated by the INPI, the French business-formalities institute), which updates the RCS entry to add the mention,
company in liquidation, to the company name. The company then survives only for winding-up purposes until closure is published, a status worth recalling because it confirms that ending the payroll first is not optional: a company in liquidation keeps its legal personality precisely to settle remaining obligations, including employment ones. The liquidator sells the assets, terminates the lease and supplier contracts, collects receivables and pays creditors in rank, and a liquidator who pays shareholders or related advances while employees, suppliers or the tax office go unpaid commits a personal fault, since the liquidator answers both to the company and to third parties for the harmful consequences of faults in office, in Article L237-12 of the Commercial Code. A foreign founder acting as their own liquidator should therefore keep a written payment schedule validated by the accountant, with the payroll clearance certificates filed first in the binder.
Tax clearance runs alongside and conditions the finale. Dissolution accelerates corporation tax on not-yet-taxed profits with a prompt final return, the last VAT returns report the cessation and regularise stock and assets kept by the shareholders, and the DGFIP (Direction générale des finances publiques, the French tax authority) issues no clean final position while returns are missing. When everything is sold, paid and declared, the liquidator convenes the closing meeting to approve the final accounts and grant discharge, publishes the closure notice in the same JAL, and files the closure on the Guichet unique. The strike-off itself has a hard deadline: removal of the main registration of a dissolved legal entity must be requested by the liquidator within one month of publication of the closure of the liquidation, in Article R123-75 of the Commercial Code. Miss that month and the file lingers with a closed liquidation but a live registration, which is how supposedly dead companies keep receiving demands. After the strike-off, download the final Kbis (the official certificate proving registration and identity) showing the removal, send it to the bank to close the account and repatriate the balance, to the insurer to cancel policies, and to the accountant for archives that must be kept for the statutory periods, confirm the VAT number is deactivated, and leave a forwarding address with the tax office. For Paris-based companies, the same steps pass through the Paris commercial court registry (greffe), whose current filing fees and JAL publication costs should be confirmed at the time, since they are adjusted periodically; budget a few hundred euros per filing step plus the JAL insertions rather than assuming closure is free.
Conclusion
Closing a French company from abroad while employees remain on payroll follows one non-negotiable order: dismiss first, pay completely, document everything, and only then dissolve, liquidate and strike off. The cessation of activity gives a solid economic ground where it is complete, final and genuine, confirmed by the Court of Cassation, but the redeployment search and the secure-career offer survive the shutdown and must be performed and kept on file. The summons, meeting and notification timetable runs the same from London or Singapore as from Paris, provided the registered letters, powers of attorney and calendars are organised in advance. The exit pay combines statutory and contractual severance, notice, leave and the final balance receipt, with the work certificate, the France Travail attestation and the last social filings closing the payroll. With that file clean, the dissolution, liquidation and one-month strike-off proceed without a wage creditor reappearing to freeze the distribution. Owners who respect this sequence close their French chapter cleanly; those who vote the dissolution while the employee is still unpaid discover that the company, its debts and their personal exposure never went away.