“Giving businesses the means to innovate, transform, grow and create jobs” is the ambition of the action plan for the growth and transformation of companies (PACTE) led by Bruno Le Maire, Minister of Economy and Finance.

Voted at first reading in the National Assembly on October 9, the bill – which includes no less than 74 articles – will be considered by the Senate in January. The opportunity to draw a picture of the main points of the reform.

FACILITATING BUSINESS CREATION AND REBOUND IN CASE OF FAILURE

The business creation process will be facilitated thanks to the constitution of a unique online platform. This will gradually replace the seven management networks of the current creation centers in 2021. This measure, according to the Government, will reduce administrative costs and delays. Another point, the preparation course for the installation for any craftsman who intends to register in the trades directory will no longer be mandatory.

The Pact Act also wishes to give a new chance to entrepreneurs who have failed in:

  • Limiting the posting by the Banque de France;
  • Erasing debts to companies without employees and holding less than 5000 euros of assets;
  • Simplifying the judicial liquidation procedure within 6 to 9 months for the smallest companies (less than 300,000 euros of turnover).

REDUCING THE EFFECTS OF WORK LIMIT CROSSINGS TO PROMOTE HIRING

Any exceeding of staffing thresholds leads to new social and tax obligations for a company (new social security contributions, internal regulations for 20 employees, mandatory election of staff representatives, etc.). There are currently 199 obligations in France, spread over 49 thresholds for SMEs. Considered as obstacles to employment, the Executive intends to gather the thresholds on 3 levels: 11, 50, 250 employees. The threshold of 20 employees will be abolished, with the exception of the employment obligation threshold for disabled workers (OETH), which will not be affected by this measure.

DEVELOPING INTERESTS AND PARTICIPATION THROUGH REDUCED TAXATION

The Government intends to encourage a better sharing of corporate profits for the benefit of employees by encouraging them to put in place profit-sharing and participation agreements. The bill provides for the elimination of the “social package” (employer contribution of 20%) paid on employee savings products in companies where the workforce does not exceed certain thresholds. For profit-sharing, the social package will be eliminated for companies with less than 250 employees. For participation, this deletion will affect companies with less than 50 employees.

SUPPORTING RETIREMENT SAVINGS

The bill aims to promote the portability of all retirement savings products (Perp individual, Group Perco, Madelin contracts …) to each other, to facilitate mobility. For each voluntary payment, the saver may be entitled to a deduction from his income (up to a ceiling). Once retired, the saver will have the opportunity to withdraw his money at once, unlike today where it is most often paid in the form of an annuity (with a regular income until death).

REDYNAMIZING INNOVATION

Among the emblematic measures:

  • Build an Innovation and Industry Fund

The creation of this fund worth 10 billion euros, launched on January 15, 2018, will allow the financing of support systems for breakthrough innovation (technology-intensive projects such as artificial intelligence, nanoelectronics, etc.). )

  • Bring public research closer to the company

The journey of researchers wishing to create or participate in the life of a company will be simplified in order to bring public research closer to the private sector. Main measure: the authorizations will no longer be entrusted to a committee of ethics but to the employer’s institution of the researcher. This is not all, the Government also intends to offer researchers the opportunity to devote 50% of their time to the company, in parallel with their work in the laboratory.

  • Industrial property

Executive opinion: only 21% of SMEs file patents against 57% of large groups. To remedy this, the text provides for the creation of a provisional application for a limited period of 12 months. This will allow the company to advance in patent processing, while preserving the “benefit of prior art”.

PRIVATIZATION OF ENGIE, THE FRENCH GAMES AND THE ADP GROUP

The PACTE law intends to remove the legal constraints that require the State to hold at least half of the shares of ADP (Aéroports de Paris) and one third of the capital of Engie. Regarding the French Games, the state will reduce its shares (at least 20% of shares against 72% today). The money raised will be used to supply the Innovation and Industry Fund (IFI). This measure will also encourage popular shareholding: part of the capital transferred by the State will be offered to French people who wish to invest in these companies.

Through this bill, which some consider “too broad” and “catch-all”, the Government intends to facilitate the lives of businesses and promote the growth of SMEs by removing obstacles at all stages of their development. Next step: the passage of the bill before the Senate in late January and a vote scheduled on February 12.

 

 

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