The interest of setting up an SCI

Real estate investment is a wealth strategy valued by many individuals and professionals. However, managing multiple properties can quickly become complex and tedious. The creation of a Civil Real Estate Company (SCI) can then prove to be an interesting solution to facilitate the management and transmission of real estate assets. In this article, we will explore the advantages and disadvantages of setting up an SCI, as well as the steps to create such a company. 

What is a Civil Real Estate Company ?

A Société Civile Immobilière (SCI) is a legal form that allows partners to unite to acquire and manage real estate assets in common. It can be made up of at least 2 partners and its share capital varies between 1,000 to 10,000 euros. An SCI has its own legal personality, a manager who takes care of the daily management and a meeting of partners who vote on important decisions. The structure of an SCI is simple: it controls and administers the real estate assets it owns, and distributes the dividends obtained in relation to the shares held by each partner according to the social status set. An SCI can also be used to carry out a commercial or industrial activity, but this is not compulsory. 

The benefits of setting up an ICS 

The Société Civile Immobilière has many advantages for the partners:

Facilitated asset management and transfer

The SCI makes it possible to group together several real estate properties belonging to different people within a single legal entity. It thus facilitates the management of real estate assets by simplifying rental, works and maintenance operations. In addition, the transmission of real estate is simplified thanks to the possibility of transmitting the shares of the SCI, rather than transferring each property individually. 

Protection of personal assets

In case of debts of the SCI, only the real estate of the company is committed, not those of the partners. This protection thus makes it possible to protect the personal assets of the partners. 

Fiscal advantages

The SCI allows you to benefit from tax advantages such as the possibility of deducting expenses related to the management of real estate (loan interest, works, etc.), the depreciation of real estate or the capital gains regime. real estate. 

Management flexibility

The SCI offers great management flexibility, the partners being able to decide on the operating rules of the company and the distribution of profits. 

Ease of transmission

The transfer of shares in an SCI is easy and quick, unlike the transfer of real estate which requires more complex formalities. In short, the SCI makes it possible to simplify the management and the transmission of a real estate heritage while benefiting from tax advantages and a great flexibility of management. However, the creation of an SCI can also have disadvantages that should be taken into account. 

The disadvantages of creating an SCI

If the Société Civile Immobilière has many advantages, it can also have some disadvantages that should be taken into account: 

High incorporation costs 

The creation of an SCI can generate high costs, in particular related to notary fees for the drafting of the statutes and the publication of the legal announcement.

Administrative and fiscal complexity

The SCI is subject to more complex administrative and tax formalities than the direct holding of real estate. The partners must in particular keep rigorous accounts and declare the profits of the company each year. 

Management constraints 

The partners must respect the operating rules of the SCI as defined in the statutes. Management can therefore be less flexible than the direct holding of real estate. Despite these drawbacks, the Société Civile Immobilière can prove to be an interesting solution for the management and transmission of real estate assets. However, it is advisable to think carefully before embarking on the creation of an SCI and to take into account the advantages and disadvantages of this solution.

How to create an SCI ? 

The creation of a Civil Real Estate Company can be done in several stages: 

Step 1: Create the SCI creation file 

Draft the statutes of the SCI which must be registered with a notary Make a legal announcement of the incorporation of the SCI in an authorized newspaper Obtain an identification number from INSEE 

Step 2: Appoint the partners and the manager of the SCI 

Choose the partners of the SCI who can be natural or legal persons Appoint the manager of the SCI who can be a partner or an outside person

Step 3: Finalize the creation of the SCI

• Sign the statutes of the SCI before a notary

• Register the SCI with the tax department

• Publish the creation of the SCI in the Official Journal

It should be noted that the creation of an SCI can generate high costs, in particular related to notary fees and the publication of the legal notice. In addition, the SCI is subject to more complex administrative and tax formalities than the direct holding of real estate. It is therefore recommended to be accompanied by a professional (notary, lawyer, chartered accountant) for the creation of an SCI.