Business and Founder Tax Lawyer
Alphard Law advises companies and their founders on the tax decisions that bind both the business and the personal wealth of those who run it: choice and evolution of the tax regime, structuring of remuneration and management packages, growth and exit transactions, establishment abroad. Our approach is to handle these two dimensions together, because a decision that favours the company can prove costly for its founder, and the reverse is just as true.
Choosing and changing the tax regime
A company's tax regime is not a one-off decision fixed at incorporation: corporate income tax or the partnership regime, the election of Article 239 bis AB of the French Tax Code for young companies, exit from a regime, tax consolidation of a group, each configuration affects the taxation of profits, the founder's remuneration, social surtaxes and the value realised on exit. The firm is closely engaged in the emerging litigation over the social surtaxes of SASU companies that elected for the income tax regime, whose issues it has documented publicly and to which it devotes a dedicated website: redressement-sasu-ir.fr (in French).
Founder remuneration and value sharing
Salary, dividends, shareholder loan interest, BSPCE founder warrants, free shares, management packages: the trade-off between these forms of remuneration engages income tax, social surtaxes, social security contributions and, ultimately, the taxation of the capital gain on exit. Management packages also attract close attention from the French tax authority, which regularly recharacterises as employment income gains reported as capital gains: securing them requires rigorous formalities and documentation created at the time of the transactions, which we prepare with founders and investors.
Growth, restructurings and exit
The firm handles the tax side of the transactions that transform a business: contributions of shares, mergers and demergers under the favourable regime, contribution-and-sale arrangements governed by Article 150-0 B ter of the French Tax Code, acquisition holding companies, share sales and the calibration of the seller's tax position, and family transfers supported by Dutreil arrangements. These transactions are handled together with our corporate practice, described on our mergers and acquisitions and corporate law pages.
The international dimension
As soon as a business crosses a border, the nature of the risk changes: unintended creation of a permanent establishment, withholding taxes on outbound flows, transfer pricing between related entities, the anti-avoidance regimes of Articles 123 bis and 209 B of the French Tax Code, and the mobility of directors and employees. That ground is the domain of our international tax practice, which is the core of the firm and distinguishes our approach to business taxation.
Our method
We quantify the scenarios before recommending, systematically including the cost of exit and not merely current taxation, and we document every decision in a written, sourced analysis. The founder remains our direct contact, without intermediation: they make the call, aware of both the risks and the gains. In the event of an audit, the firm provides continuity from the initial advice through to the defence, which ensures no decision has been taken without anticipating how it would be argued before a tax inspector.
Frequently asked questions
Is it better to take salary or dividends?
The trade-off depends on the company's tax regime, the director's social security status, the level of remuneration sought and the exit horizon. Salary generates social security contributions but creates entitlements and remains deductible from taxable profit; dividends bear social surtaxes and tax without creating any entitlement. No general rule replaces a calculation: the comparison must factor in social protection, pension rights and the treatment of the future capital gain.
Are management packages challenged by the French tax authority?
Regularly, yes. The authority seeks to recharacterise as employment income gains that beneficiaries report as capital gains, arguing that they derive from the duties performed rather than from a genuine investment risk. Securing them rests on concrete factors: a real acquisition price, an effective risk of loss, the absence of any guaranteed gain, and documentation created at the time of the transactions.
What is the contribution-and-sale deferral?
Where a founder contributes shares to a holding company they control before that company sells them, the gain on the contribution benefits from a deferral of taxation under the conditions of Article 150-0 B ter of the French Tax Code, notably the reinvestment of a fraction of the sale proceeds into an economic activity within a set period. The mechanism is powerful but demanding: failing to meet the reinvestment conditions ends the deferral and triggers immediate taxation.
My company is developing activity abroad: when does it become a tax issue?
Far earlier than most expect. An employee working remotely abroad on a lasting basis, an agent authorised to conclude contracts, premises or stock held abroad can be enough to create a permanent establishment and give the local state a right to tax, with filing obligations and a risk of double taxation. The question arises at the first international developments, not when a subsidiary is incorporated.
Do you work with my accountant?
Yes, and it is the most effective arrangement. The accountant keeps the books, prepares the returns and follows the day-to-day life of the business; the tax lawyer handles structuring decisions, questions of legal characterisation, exceptional transactions and defence in the event of an audit, with the benefit of professional privilege over the exchanges. The two roles complement each other without overlapping.
Does a tax decision affect both your company and your personal wealth? Contact Alphard Law for a confidential initial discussion.