Everything you need to know about the legal reserve in SCI
Posted: Tue Feb 11, 2025 8:13 am
The management of a Civil Real Estate Company (SCI) is based on strict accounting and financial rules. Among these, the constitution of the legal reserve is particularly important, especially for SCIs subject to corporate tax (IS). If you are a partner in an SCI or are considering creating one , understanding the specificities of the legal reserve is essential to ensure the compliance chinese overseas europe data and financial solidity of your company.
Everything you need to know about the legal reserve in SCI
Do you want to create an SCI?
With Indy, benefit from fast and free support for the creation of your civil real estate company!
I make an appointment
In summary:
The legal reserve is a share of a company's profits that must be allocated each year to a specific account, until it reaches a threshold set by law, generally 10% of the share capital;
The allocation to the legal reserve is obligatory for SCIs with IS , but optional for those with IR ;
It is carried out at the time of approval of the company's accounts ;
In addition to the legal reserve, an SCI can constitute other types of reserves such as the statutory reserve or the optional reserve .
The legal reserve: what is it?
The legal reserve is an accounting obligation that applies to the majority of companies, whether civil or commercial. It consists of allocating a fraction of annual profits to a specific account, in order to constitute precautionary savings. This sum is taken before any distribution of dividends to partners or shareholders.
It fulfills several strategic objectives:
Ensure financial stability : In the event of losses, it allows the company to have a fund to mitigate the financial impacts;
Building the confidence of financial partners : Creditors, such as banks or other investors, appreciate that the company maintains reserve funds. This is seen as a sign of prudent and responsible management;
Protecting share capital : By consolidating equity, the legal reserve protects the contributions of partners or shareholders, reducing the risk of having to recapitalize urgently.
Everything you need to know about the legal reserve in SCI
Do you want to create an SCI?With Indy, benefit from fast and free support for the creation of your civil real estate company!
I make an appointment
In summary: The legal reserve is a share of a company's profits that must be allocated each year to a specific account, until it reaches a threshold set by law, generally 10% of the share capital;
The allocation to the legal reserve is obligatory for SCIs with IS , but optional for those with IR ;
It is carried out at the time of approval of the company's accounts ;
In addition to the legal reserve, an SCI can constitute other types of reserves such as the statutory reserve or the optional reserve .
The legal reserve: what is it?
The legal reserve is an accounting obligation that applies to the majority of companies, whether civil or commercial. It consists of allocating a fraction of annual profits to a specific account, in order to constitute precautionary savings. This sum is taken before any distribution of dividends to partners or shareholders.
It fulfills several strategic objectives:
Ensure financial stability : In the event of losses, it allows the company to have a fund to mitigate the financial impacts;
Building the confidence of financial partners : Creditors, such as banks or other investors, appreciate that the company maintains reserve funds. This is seen as a sign of prudent and responsible management;
Protecting share capital : By consolidating equity, the legal reserve protects the contributions of partners or shareholders, reducing the risk of having to recapitalize urgently.