One SCI Per Property or One SCI for Everything? Structuring a French Portfolio

One SCI per property or one SCI for everything? Structuring a French portfolio

An owner building a portfolio of French property through SCIs faces a structuring question early on: hold everything in a single SCI, or form one SCI per building? The received advice leans towards one SCI per property, and for good reasons - a company that holds several buildings concentrates value in one block of shares, which makes those shares harder to sell or pass on and narrows the pool of possible buyers. But more companies mean more cost, and the right answer depends on the size of the portfolio, the risk profile of each building, and the transmission plan behind it.

This guide sets out the case for one SCI per property, how separate companies compartmentalise risk, how the choice interacts with separating private from professional property and with transmission, and the cost of running several SCIs rather than one. It builds on our full buyer's guide, applying the same principles to a portfolio rather than a single purchase.

The case for one SCI per property

The core reason to prefer one SCI per building is the effect of portfolio size on the value and saleability of the shares. When a single SCI holds several buildings, the company's assets carry a high value, which makes selling or transmitting the shares more difficult and limits the number of buyers able to take them on. A block of shares representing one modest building can find a buyer or be gifted to a child; a block representing an entire portfolio is a far larger and less liquid parcel, and the market for it is correspondingly narrower.

The point connects to how SCI shares are valued. A share's worth is the company's net asset value - its assets minus its liabilities - so a single company holding several unencumbered buildings produces shares of substantial value, while a company holding one building financed by debt produces shares worth little until the debt is repaid. Splitting the portfolio across one SCI per building keeps each parcel of shares at a size that can be sold or gifted on its own terms, and lets the owner calibrate each transfer to the building it represents rather than to the whole estate at once.

For transmission, the advantage is granularity. With one SCI per property, an owner can give the shares of one building to one child and another building to another, or stage gifts building by building over time, matching each gift to the available allowances and to the family's intentions. A single SCI holding everything forces transmission to happen in one indivisible mass of shares, or through fractional gifts of a block whose value reflects the entire portfolio. Separate companies let the owner calibrate each transfer to the building it represents; a single company allows only all-or-fractional transfers of one block.

Compartmentalising risk across several SCIs

The second reason to hold buildings in separate SCIs is the containment of risk, and it follows from two features of the civil company working together. Each SCI, from its registration, is a distinct legal person with its own patrimony, kept separate from the patrimonies of its shareholders and of any other company (C. civ. Art. 1842). And the shareholders answer for each company's debts without limit, in proportion to their shares, after creditors have first pursued the company in vain (C. civ. Arts. 1857 and 1858).

Put those together across a portfolio. A liability that arises from one building - a bank loan secured on it, a dispute with a tenant of it, a claim connected to its condition - is a debt of the SCI that owns that building, and is borne first by that company's assets, meaning that building. It does not automatically reach the buildings held by the other SCIs, because those are the assets of different legal persons. Holding each building in its own company therefore ring-fences the company-level asset pools from one another: a problem confined to one building does not, of itself, expose the others. A single SCI holding the whole portfolio has the opposite exposure - every building it owns answers for any liability the company incurs, wherever in the portfolio the problem arose.

The compartmentalisation has a limit that must be stated plainly, because the SCI is not a limited-liability vehicle. Separate companies ring-fence the buildings from one another at company level, but the shareholders remain personally liable for each company's debts in proportion to their shares (C. civ. Art. 1857) - the structure contains the risk between the buildings, not between the buildings and the shareholders' own assets. A portfolio built for risk containment reduces cross-contamination between properties; it does not turn an SCI into a shield for the people behind it.

How should you structure your French property portfolio?

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Separating private from professional property in a portfolio

A distinct structuring reason to use an SCI - and often a separate one - is to isolate real estate from an operating business. Forming an SCI to hold and manage property allows that property to be kept apart from the assets of the business, which serves several ends: it separates the risk of the business from the real estate, and it allows co-heirs who do not take over the business to be allotted the property instead, keeping the operating company and its premises in different hands.

Two specific rules qualify this separation, and a portfolio owner should know them before assuming an SCI fully insulates professional property. First, contributing business premises to an SCI is subject to no special contribution-verification procedure, precisely because the shareholders remain liable without limit - the protection the SCI gives is not the verified, capped protection of a commercial company. Second, and more pointed, the shares an individual entrepreneur holds in a company that owns the premises and whose main activity is making them available to that entrepreneur for their own professional use are treated as assets useful to the professional activity, and so form part of the pool answerable to professional creditors (C. com. Art. R. 526-26). And where an entrepreneur has established their main residence in a building owned by an SCI, holding only shares, they cannot claim the statutory unseizability of the main residence against business creditors - nor the unseizability of other property held through the SCI - because only the company owns the underlying real estate (C. com. Art. L. 526-1). The SCI separates the property from the business in useful ways, but it does not switch off these rules, and a portfolio that mixes professional and private property should be mapped against them.

Structuring a portfolio for transmission

The portfolio question and the transmission question are really the same question seen from two angles, because the main reason to prefer one SCI per building is what it does for passing property on. An SCI is generally presented as the instrument that avoids, on the parents' death, an undivided co-ownership between the children: the real estate no longer forms part of the estate - it has become the company's property - so the heirs of a deceased shareholder can claim rights only over the shares that belonged to the deceased, not over the building itself.

On the purchase of a property, parents often wish to associate their children in the operation; they may contribute the family property to an SCI and then transmit the shares - in full ownership or in bare ownership - to the children through a donation-partage. This settles the succession in advance and organises, between the members of the family, the conditions on which each occupies or benefits from the property, with the parents usually reserving the principal enjoyment for themselves. Holding the property in a company preserves its integrity, because the children are allotted shares rather than the building considered in itself - and, with one SCI per building, the allotment can be tailored building by building. One point of tax detail is worth carrying into the plan: transfers of undivided rights between original co-owners are taxed at the 2.5 % partition duty, whereas transfers of SCI shares between shareholders - even close relatives - are taxed at the ordinary rate of 5 %.

The cost of running several SCIs

The compartmentalisation and transmission advantages of multiple SCIs are real, but each company is a separate obligation, and the running cost scales with the number of companies. Every SCI must demonstrate that it genuinely functions: properly convened meetings, minutes kept, accounts maintained, and a written annual report from the manager to the shareholders at least once a year. The manager has to devote time to each company, and the correspondence and formalities of each carry a cost.

Run once, that discipline is manageable; run five or ten times over a portfolio of separate SCIs, it becomes a material administrative and financial commitment. A portfolio owner therefore weighs the containment and transmission benefits of one SCI per building against the multiplied formalism of holding several - and the right number is not a fixed rule. A large, high-value or high-risk portfolio, or one destined for several children, justifies the granularity of separate companies; a small, low-risk holding kept in one pair of hands may not, and a single well-drafted SCI may serve it at a fraction of the running cost. The decision is a trade-off to be sized to the portfolio, not a rule to be applied blindly.

The holding SCI: unified control over several SCIs

Between the two extremes - one SCI for everything and one entirely separate SCI per building - sits a middle structure: a holding company that owns the shares of several property SCIs. A civil company can itself be a shareholder of another company, so an SCI can hold the shares of the underlying property SCIs, each of which owns one building. This keeps the buildings compartmentalised in their own companies, while concentrating control and, often, the family's shareholdings at the level of the holding.

The pattern is used, in transmission planning, to organise powers and to gather the family's rights in one place while keeping the operating assets - here, the individual buildings - in separate companies below. For a family passing property to the next generation, a holding structure can unify decision-making and simplify the giving of shares at the top, while the one-per-building principle continues to protect saleability and contain risk underneath. It adds a layer of cost and complexity of its own, so it suits larger portfolios and family situations rather than a two-building holding - but it is the structuring answer when unified control and building-level separation are both wanted.

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One SCI or several: the trade-off at a glance

Frequently asked questions about structuring a portfolio of SCIs

This article is for general information only and states French law as published in the sources available at the date shown above. It does not constitute legal or tax advice. How many SCIs to use, and whether to add a holding company, depends on the size and risk of the portfolio, the financing and the transmission plan. Always seek qualified legal advice - and coordinate with the notary - before structuring a portfolio of French property.