The Ordinance of 8 February 2023 on the practice of regulated liberal professions through companies introduces a new legal framework that is simpler, clearer, and more secure for professionals.
Valérie BOUCHEZ and Marie LALANNE provide an overview for Interfimo of its key provisions, which are set to come into force on 1 September 2024.
Liberal Professions: Get Ready for the New Rules Coming into Effect on 1 September 2024
Introduction :
Before Ordinance No. 2023-77 of 8 February 2023, the legislation governing liberal professions was complex and fragmented. Earlier laws – such as Law No. 66-879 of 29 November 1966 applicable to professional civil companies and Law No. 90-1258 of 31 December 1990 applicable to liberal professional companies – had been amended repeatedly over the years, making the legal framework increasingly opaque and sometimes ill-suited to the modern realities of liberal practice.
Each law was subject to numerous implementing decrees. While profession-specific decrees helped clarify the applicable regulatory framework for each field, multiple successive decrees could apply to the same profession, making it difficult for professionals to understand the rules that governed them.
The Ordinance of 8 February 2023, published in the Official Journal on 9 February 2023, stems from Article 7 of Law No. 2022-172 of 14 February 2022 on independent professional activity. It responds to a growing need to clarify and simplify legislative provisions applicable to regulated liberal professions.
One key benefit of the ordinance is that it clearly defines the professions concerned, grouping them into three main categories: healthcare professions, legal and judicial professions, and technical and lifestyle professions. It thereby centralises the applicable provisions, whether common or specific, for these three categories.
Me Valérie BOUCHEZ and Me Marie LALANNE, partner lawyers at LIBRATO AVOCATS, provide an overview of the key measures of the Ordinance of 8 February 2023, which will come into force on 1 September 2024.
I. Partners in general law companies (SARL, SAS, SA or SCA) : the need to harmonise articles of association
The Macron Law of 6 August 2015 allowed notaries, judicial officers, lawyers, court-appointed administrators and judicial representatives to practise through general law companies such as SARLs, SASs, SAs or SCAs.
These professionals were therefore no longer required to form liberal professional companies (SELs), with the aim of ending the unequal treatment between liberal professionals, some of whom were allowed to operate under general law structures.
However, in practice, these types of companies proved unsuitable for certain regulated professions. A legal vacuum existed on issues that had been clarified by the courts for SELs, particularly regarding the tax and social security status of partners in general law companies.
The ordinance therefore requires these liberal professionals, from 1 September 2024, to update the articles of association of any general law company (SARL, SAS, SA or SCA) to comply with the new legal requirements. In other words: general law companies are out, SELs are in.
However, this obligation does not apply to intellectual property attorneys, chartered accountants or statutory auditors, who may continue to practise under general law company forms. This disparity in treatment among liberal professions is regrettable.
All existing companies (whether general law or liberal professional companies) will have until 31 August 2025 to update their articles of association.
These articles must reflect, in particular, the new classification of regulated liberal professions: healthcare professions, legal and judicial professions, and technical and lifestyle professions.
For example, the ordinance removes, for liberal professionals practising a legal or judicial profession, the statutory cap on the amount that may be left in the partner’s current account. This amount was previously limited to three times the partner’s contribution to the company’s share capital. As of 1 September 2024, legal and judicial professionals will be free to organise the transfer of funds to the company as they see fit.
However, this does not apply to professionals in the medical field, for whom the ordinance maintains a limit on the funds that may be made available to the company and refers the conditions of application to a decree issued by the Council of State.
II. Multi-professional practice companies: welcome to surveyors
Just like the law of 31 December 1990, the Ordinance of 8 February 2023 allows the creation of multi-professional practice companies (SPE). However, while the previous law allowed nine professions to form, together, a single shared practice structure, namely lawyers, lawyers at the Conseil d’État and the Cour de cassation, judicial officers, notaries, court-appointed administrators, judicial representatives, industrial property attorneys, statutory auditors and chartered accountants, the ordinance extends this list by adding one more profession: surveyors.
The formation of an SPE will still be subject to strict requirements, with approval required from each relevant authority or registration body for each type of profession, and compliance with the rules specific to each profession.
SPEs will be able to pool material and real estate resources, which simplifies management and reduces operational costs for liberal professionals.
III. Financial holding companies for liberal professions: promising legal developments, but a tax regime that currently halts any real opportunity
SPFPLs are holding companies that can be created by liberal professionals. They are not practice structures.
They were previously limited to holding shares in liberal professional companies. Their investment scope has now been broadened.
While the law of 31 December 1990 expressly provided that SPFPLs could “carry out any other activity provided that it is exclusively intended for the companies or groups in which they hold interests,” this wording had long been interpreted in practice as authorising investments in companies with real estate investment as their corporate purpose. The ordinance now clarifies that SPFPLs may “own, manage and administer any real estate assets and rights and provide services, provided that such activities are exclusively intended for the operation of the companies or groups in which they hold interests. Under this condition, they may in particular hold shares or interests in any civil or commercial company, solely for the purpose of acquiring and managing real estate.”
The ordinance therefore confirms what corresponds to a genuine need among liberal professionals in building their professional assets: they may now, through a holding company, hold shares in an SCI that itself owns the property used for the practice of their profession, or invest directly through the holding company in real estate allocated to their professional activity.
Beyond the benefit for the professional of not personally financing the acquisition of business premises — notably to allow for the deduction of interest — the creation of an SPFPL also has the advantage of limiting liability to the partner’s share in the company’s debts. SPFPLs may also hold shares in commercial companies “provided that the corporate purpose of such companies relates to activities that the professionals holding the SPFPL are authorised to carry out under the rules applicable to each profession.”
In this way, they may provide management, administrative and coordination services for their subsidiaries and holdings, enabling them to play a more active role in managing the companies they control. However, this option to acquire interests in commercial companies is only available to legal and judicial professionals.
Two further limitations must be noted :
- They may not hold interests in professional civil companies (SCPs), which can still only be formed between natural persons.
- The Court of Cassation, in its ruling of 19 October 2023 (Case No. 21-20.366), significantly limited the attractiveness of SPFPLs by ruling that dividends distributed by the practice company to the SPFPL must be subject to professional social security contributions. This decision has, unsurprisingly, been widely challenged by liberal professionals, who consider it to be contrary to the provisions of Article L131-6 of the French Social Security Code.
The French Senate was questioned on this decision on 15 February 2024, and we are still awaiting a response.
IV. Strengthening of safeguards
In response to the increasing financialisation of certain liberal professions (biologists, veterinarians, etc.), the ordinance aims to ensure the independence of liberal professionals in the exercise of their activity, free from external influence that could compromise the quality and integrity of their services. This is crucial, especially in professions where ethics and responsibility toward clients or patients are paramount.
Increased oversight is therefore entrusted to professional bodies, which will now require not only internal regulations but also shareholders’ agreements.
Shareholders’ agreements, which are typically confidential documents, often govern key aspects such as governance, voting rights, profit distribution, and the terms of entry and exit for partners. By reviewing these documents, professional bodies will ensure that internal practices comply with legal and ethical requirements (e.g. the professional’s freedom to practice their craft independently).
Both SELs and SPFPLs will also be required to report to the relevant professional bodies once a year, providing information on share distribution, the composition of voting rights, and updated articles of association.
We are still awaiting the implementing decrees to determine the possible sanctions in the event of non-submission of this information.
V. On the published decrees
To date, only Decree No. 2023-1165 of 9 November 2023 has been published. It relates to the list of professions falling under the category of legal and judicial professions, which includes :
- Court-appointed administrators and judicial representatives ;
- Lawyers ;
- Lawyers at the Conseil d’État and the Cour de cassation ;
- Judicial officers ;
- Clerks of commercial courts ;
- Notaries.
LIBRATO AVOCATS supports regulated professionals at every stage of their professional practice, whether it’s the establishment of their firm/office, the restructuring of their professional activity, support for development, or dispute resolution between partners.
Does your practice need to adapt to this reform ?
Let’s talk about it.