Changes to the law could help

THE Loi de Modernisation de l'Economie is aimed at making life easier for businesses.

Here are the key measures:

• Reducing payment deadlines: French companies typically get paid later than the European average. For contracts concluded from January 1, 2009 there will be a ceiling of 60 days (or 45 days from the month end) from the date the bill is sent. The law allows exceptions to be agreed for certain work sectors until January 1, 2012. Late payments penalties have risen from 1.5 to three times the legally-set interest rate.

• Employers' social security contributions: These will no longer go up when the business reaches thresholds of ten and 20 employees.
Initially this measure will apply to companies crossing these thresholds from now until the end of 2010, when it will be re-evaluated.

• Preferential treatment for “innovative” small and medium-sized businesses: For an experimental five-year period public bodies will have a policy of favouring innovative businesses to do work when presented with several bids. These are defined as businesses that spend a significant amount of their budget on research and development (R&D.)

• Sociétés par actions simplifiée (SAS) no longer have to have their accounts certified by a commissaire aux comptes: This rule is subject to certain ceilings in terms of number of employees and turnover. Small businesses types such as SAS, SARL and SA created within the last five years can opt to be taxed under the régime fiscal de l’impôts sur le revenu. Certain conditions apply.

• Transfer fees: To make it easier to sell businesses, transfer fees are being lowered from 5% to 3% for a business valued at less than €200,000.
Employees or family members can also benefit from a reduction under certain conditions.

• Changes in rules on sales: The existing annual sale periods are being cut from six to five weeks each with shops free to use the two other weeks when they want during the year. The “free” periods must finish a month before the fixed ones.

More details (in French) at www.modernisation-economie.minefe.gouv.fr