Your French company earns nothing, you live in London, New York, Dubai or Singapore, and every quarter brings the same question: keep paying the accountant, the registered address and the local business tax for a structure with no revenue, or kill it and lose the name, the bank history, the contracts and the option to restart? French law offers a third way that foreign founders rarely hear about, because most explanations sit behind French-only pages: the mise en sommeil, the formal temporary suspension of activity. A dormant company keeps its legal personality, its name and its registration, while most declarations freeze and part of the tax load falls away, for a maximum of two years, at the end of which you either wake the company up, sell it or close it properly. The decision, the declaration and the follow-up can all be handled from abroad through the Guichet unique (the single online company formalities desk run by the INPI, the French intellectual property and companies office). This article explains in plain English how a non-resident founder puts a French SAS (société par actions simplifiée, the flexible joint-stock company), SARL (société à responsabilité limitée, the limited liability company) or single-shareholder variant to sleep: who decides, what to file within the one-month deadline, which bills stop and which keep running, what the director may still sign, and how to resume, sell or dissolve before the two-year clock runs out. Where the business will never restart, the companion procedure is the full winding-up described in our guide on closing a French company from abroad: dissolution, liquidation, tax clearance and strike-off; dormancy is the waiting room, not an alternative to that final sequence.

I. How to put your French company to sleep from abroad and stop the bleeding

Dormancy is a declared legal status, not simply leaving the company idle. A company that merely stops invoicing while filing nothing accumulates late-filing penalties, estimated tax assessments and, eventually, a court-ordered strike-off that looks terrible on the founder’s record. A company properly declared dormant tells the registry (the greffe du tribunal de commerce, the clerk’s office of the commercial court), the tax office and the social agencies that the pause is voluntary and supervised, and in exchange the administration suspends most recurring declaration duties. The French administration describes the trigger in everyday terms on its English-language page dormant company status for a company: temporary economic difficulty, the director’s illness or a disaster can lead to the decision to pause. For a founder abroad, the typical trigger is simpler: the French project is on hold, the clients are gone, the employee left, and the structure costs several thousand euros a year to carry for nothing. Dormancy converts that open-ended bleed into a capped, low-cost waiting period with a fixed legal end date.

A. Decide the suspension and declare it on the Guichet unique within one month

The decision belongs in principle to the legal representative alone: the manager (gérant) of a SARL or the president (président) of a SAS can decide to pause without calling a shareholders’ meeting, unless the articles of association (statuts) require a collective decision for it. The administration confirms that holding a general meeting is optional except where the statutes make it mandatory. Read the statutes before acting. Many SAS articles drafted for foreign founders list the decisions that must go to the shareholders collectively, and the Code de commerce provides that in an SAS the major powers are exercised collectively by the shareholders under the conditions set by the articles, “sont, dans les conditions prévues par les statuts, exercées collectivement par les associés” (article L227-9 of the Code de commerce). Where the statutes require a vote, organise it under the applicable majority: in a SARL, amendments to the articles need shareholders representing at least three-quarters of the shares, “par les associés représentant au moins les trois quarts des parts sociales” (article L223-30 of the Code de commerce). A sole shareholder of an SASU (société par actions simplifiée unipersonnelle, a one-shareholder SAS) or EURL (entreprise unipersonnelle à responsabilité limitée, a one-shareholder SARL) simply records the decision in writing in the decisions register. Sign from abroad without travelling: a signed PDF with a qualified or recognised electronic signature is accepted for the online filing, and the registry checks coherence of names and dates rather than the place of signature.

Once decided, the clock runs fast. The legal representative must declare the temporary cessation on the company formalities desk website within one month of the decision, or of the shareholders’ meeting where one was held. The filing is fully online and routinely handled from outside France by the director or the accountant with a mandate (pouvoir). Upload a clean file: the signed decision or minutes, a valid identity document of the representative and, where the registry asks for it, the updated details of the correspondence address. After recording, the Kbis extract (extrait Kbis, the official identity certificate of a French company) shows the temporary cessation, which is exactly the proof banks, landlords and contracting parties will ask for when you tell them the company is pausing. Order a fresh Kbis and check the mention. Two mistakes from abroad recur constantly: filing late, which draws registry questions and can reset the effective date of the pause, and declaring dormancy while debts are already unpaid. Dormancy is not insolvency protection. A company that cannot pay its debts as they fall due (cessation des paiements) must open insolvency proceedings within forty-five days before the commercial court; parking it in dormancy instead exposes the director to personal liability for late filing (faute de gestion arguments) and to the extension of proceedings. If suppliers, the landlord, URSSAF (the social security collection agency) or the tax office are already chasing unpaid balances, settle or negotiate first, then declare the pause on a clean balance sheet.

Founders weighing the vehicle itself at this stage, for example closing the SAS to reopen later as a branch of the foreign parent, should read our guide on how to choose between an SAS, an SARL, a branch and a subsidiary in France before deciding, because dormancy preserves the existing vehicle while a change of vehicle means closing one structure and opening another, with different tax arithmetic.

B. What dormancy freezes and what keeps billing you during the sleep

The freeze covers the activity-linked declarations. A dormant company files no VAT returns and pays no VAT, and for corporate income tax (IS, impôt sur les sociétés) the director keeps sending the annual return but reports nil turnover instead of an amount. That nil-return discipline matters: founders who file nothing at all during dormancy receive estimated assessments (taxations d’office) that take months to cancel from abroad, so calendar the nil filings with the accountant before leaving. The local business tax (CFE, cotisation foncière des entreprises) follows a halfway rule that surprises many founders: the company keeps paying CFE during the first twelve months of inactivity and becomes exempt only beyond twelve months. The tax itself is an annual charge by nature, since the Code général des impôts provides that “La cotisation foncière des entreprises est due chaque année par les personnes physiques ou morales” which carry on a habitual non-salaried professional activity (article 1447 of the Code général des impôts), and the administration applies the twelve-month dormancy threshold on top. Time the declaration accordingly: a pause declared in January burns a full CFE year, while the exemption lands in year two. Companies with tiny residual receipts should also note the absolute floor the administration recalls, with exemption where turnover stays at or below 5,000 euros, but a truly dormant company reports nil anyway.

What dormancy does not freeze is the accounting and corporate life. The company must still draw up annual accounts (balance sheet, profit and loss, notes), convene the annual meeting to approve them and file them. For a SARL the Code de commerce states the duty plainly: “Toute société à responsabilité limitée est tenue de déposer au greffe du tribunal, pour être annexés au registre du commerce et des sociétés, dans le mois suivant l’approbation des comptes annuels par l’assemblée ordinaire des associés” (every limited liability company must file its accounts at the registry within one month of approval by the ordinary meeting) (article L232-22 of the Code de commerce), with two months where filing is electronic, and the SAS follows the same annual filing through the Guichet unique under the administration’s annual accounts filing guide. Budget one accounting package a year even while dormant; founders who sack the accountant on day one of dormancy are the ones who miss the approval meeting and pay late-filing fines. Our walkthrough of the annual legal calendar of a French company from abroad remains the checklist to follow during the sleep, minus the trading.

The director’s own social position continues during dormancy, with rules that differ sharply by regime, and this is where foreign founders miscalculate most. A director affiliated as a self-employed worker (TNS, travailleur non salarié), typically the majority manager of a SARL, keeps paying social contributions during the pause, calculated on a minimum base covering daily allowances, basic pension and disability-death. The legal anchor is that the contributions of self-employed workers are assessed on the statutory base, since the Code de la sécurité sociale provides that “Les cotisations de sécurité sociale dues par les travailleurs indépendants non agricoles” are assessed on the base defined by the social security legislation (article L131-6 of the Code de la sécurité sociale), and the administration confirms the minimum-base billing during dormancy. By contrast, a director under the general employee-regime scheme, typically the paid president of an SAS, owes contributions on actual remuneration, so an unpaid president owes none during the pause. Map your own regime before budgeting the sleep: a TNS manager pays roughly two to three thousand euros a year of minimum contributions to keep rights open, while an unpaid SAS president pays nothing. The start-up aid (ACRE, aide à la création ou à la reprise d’une entreprise) exemption, where granted, survives the pause. Two practical points complete the picture: a dormant tenant may keep its commercial lease premises (bail commercial), which helps founders who want to restart in the same office, and the director keeps full powers to sign conservatory and administrative acts, tax filings, renewals, protective letters, but must not resume trading under the cover of dormancy, because invoicing again without reactivating ends the protection and restarts every declaration duty retroactively.

One configuration common among foreign groups deserves its own note: the French SASU owned entirely by the foreign parent company. Dormancy works for it like for any other company, and the parent board simply records the decision. But where the group knows the subsidiary will never restart, dormancy is usually the wrong tool, because a wholly parent-owned single-shareholder company can be dissolved through the simplified route without a liquidation phase, with all assets and liabilities passing directly to the sole shareholder and creditors keeping a short window to object. Weigh the two routes with the accountant before declaring anything: two years of minimum social contributions, a year of CFE and two accounting packages for a subsidiary the group has already decided to abandon is money spent to delay a dissolution that the simplified route would have finished in weeks. Conversely, where the group hesitates between relaunching the French market entry and withdrawing, dormancy buys the reflection time that an immediate dissolution would destroy, since a dissolved company cannot be revived while a dormant one can.

II. How to wake the company up, sell it or close it before the two-year clock runs out

Dormancy is capped: the administration states the sleep lasts a maximum of two years, and at the end the director faces exactly three doors, resume, sell or close. Diarise the deadline from the declaration date, not from the last invoice, and start the decision process around month eighteen, because each exit takes weeks of filings and no extension exists. A founder who lets the deadline pass without acting invites the registry judge to strike the company off the register on the court’s own motion (radiation d’office), a black mark that complicates any future French venture, visa file or bank application. The two-year rule is also the reason dormancy suits a genuine pause, a delayed project, a maternity or illness gap, a funding round that slipped, and never suits a dead business: if the activity will never return, closing now is cheaper than sleeping for two years and then closing anyway, with two years of minimum contributions, CFE year one and accounting packages spent for nothing.

A. Resume activity or sell the company before the deadline

Resuming is the lightest exit. The director files an amending registration (inscription modificative) on the Guichet unique declaring the end of the temporary cessation, and the company restarts declarations from the resumption date: VAT returns, payroll declarations (DSN, déclaration sociale nominative, the monthly payroll and social declaration) where staff are rehired, and ordinary invoicing. Notify the bank, which may have frozen online services or downgraded the account during the sleep, and the insurer, because professional liability policies sometimes suspend cover for dormant periods. Where the pause followed losses that pushed equity below half of the share capital, reopen the file the law already opened: the Code de commerce requires the extraordinary meeting on early dissolution where “Si, du fait de pertes constatées dans les documents comptables, les capitaux propres de la société deviennent inférieurs à la moitié du capital social” (losses have driven equity below half of the capital) (article L225-248 of the Code de commerce), and a company that voted continuation must rebuild equity by the legal deadline. Restarting activity without fixing that underlying position merely restarts the same countdown, so pair the resumption with a recapitalisation, a regulated capital reduction or, where the hole is too deep, the honest decision to close.

Selling is the exit founders abroad underuse. A dormant SAS or SARL with a clean Kbis, filed accounts, no debts and a short history can be sold by transferring the shares (cession de titres), which avoids the whole dissolution-liquidation sequence and sometimes recovers part of the set-up costs. The buyer inherits the history, so prepare a vendor file that answers the buyer’s checks before they are asked: Kbis showing the dormancy mention, filed accounts for every year including dormant ones, tax and URSSAF clearance certificates, the lease or domiciliation contract, bank statements proving nil movement, and the share transfer register (registre des mouvements de titres) up to date. Price honestly: a dormant shell is worth its convenience, a ready-made registration with bank account, not its capital. For share deals, the registration of the transfer deed with the tax office follows the standard deeds rule that listed company deeds “Doivent être enregistrés dans le délai d’un mois à compter de leur date” (must be registered within one month of their date) (article 635 of the Code général des impôts), so have the accountant or notary handle the registration step and the buyer handle the Guichet unique filing for the change of director and, usually, the registered office. Never sell to a straw buyer who offers to take the company for one euro with debts inside: the seller who transfers a company with hidden liabilities to an insolvent buyer remains exposed to claims that the transfer was a fraud on creditors (fraude Paulienne arguments), and French courts look hard at one-euro sales of indebted companies.

B. Close the company properly if the business will never restart

Closing from dormancy follows the ordinary voluntary winding-up, with one advantage: the balance sheet is usually clean, which shortens the liquidation to weeks. The shareholders vote the early dissolution, since the Code civil lists among the ways a company ends “Par la dissolution anticipée décidée par les associés” (early dissolution decided by the shareholders) (article 1844-7 of the Code civil), and dissolution triggers liquidation as of right, because “La dissolution de la société entraîne sa liquidation” (article 1844-8 of the Code civil), which “n’a d’effet à l’égard des tiers qu’après sa publication” (has effect against third parties only after publication). The same meeting appoints the liquidator, publishes the appointment within one month in the authorised legal notices platform (SHAL, support habilité à recevoir les annonces légales) and files the dissolution on the Guichet unique. From that instant the company lives on only to be wound up: “La société est en liquidation dès l’instant de sa dissolution pour quelque cause que ce soit” (the company is in liquidation from the moment of dissolution) and its legal personality survives only for liquidation purposes, “La personnalité morale de la société subsiste pour les besoins de la liquidation, jusqu’à la clôture de celle-ci” (article L237-2 of the Code de commerce).

The liquidator then runs the short closing checklist: terminate the domiciliation or lease, close or transfer the contracts, collect any shareholder current-account debit balances, file the final VAT and corporate tax returns, obtain the URSSAF clearance certificate proving the company “est à jour de ses obligations de déclaration et de paiement auprès des organismes de recouvrement” (is current on declaration and payment duties with the collection agencies) (article L243-15 of the Code de la sécurité sociale), draw up the final liquidation accounts and convene the shareholders to approve them. The Code de commerce requires that shareholders be convened at the end of liquidation to decide on the final accounts, the discharge of the liquidator and the recorded closing, “sont convoqués en fin de liquidation pour statuer sur le compte définitif, sur le quitus de la gestion du liquidateur et la décharge de son mandat et pour constater la clôture de la liquidation” (article L237-9 of the Code de commerce), and the final accounts go to the registry, since “Les comptes définitifs établis par le liquidateur sont déposés au greffe du tribunal de commerce en annexe au registre du commerce et des sociétés” (article R237-7 of the Code de commerce). Publication of the closure and the strike-off (radiation from the RCS, the registre du commerce et des sociétés, the Trade and Companies Register, announced in the BODACC, the Bulletin officiel des annonces civiles et commerciales) end the story. The full step-by-step, with the from-abroad filing tactics, publication contents and the mistakes that restart the clock, is set out in our companion guide on closing a French company from abroad: dissolution, liquidation, tax clearance and strike-off. Keep the books for the legal retention periods at an address the former liquidator can produce, and only then close the bank account.

Conclusion

Dormancy turns an anxious idle company into a managed pause with a fixed price and a fixed end date. The director decides alone unless the statutes require a vote, declares the temporary cessation on the Guichet unique within one month, and the Kbis carries the proof. VAT declarations stop, corporate tax returns go nil, CFE falls away after the first twelve months, while annual accounts, approval meetings and filings continue and a self-employed director keeps paying minimum social contributions. Within two years the founder chooses in full knowledge of the position: reactivate with an amending registration, sell a clean shell by transferring the shares, or dissolve, liquidate and strike off with the short closing sequence a clean balance sheet allows. Each path runs online from abroad, each proof arrives as a downloadable certificate, and the one outcome to refuse is the passive drift that trades a cheap declared pause for penalties, estimated assessments and a court-ordered strike-off. Decide the sleep deliberately, budget its two years honestly, and the French company becomes an option again instead of a liability.