Subsection 2: Internal control

Articles in this section · 7

R561-38-3R561-38-4R561-38-5R561-38-6R561-38-7R561-38-8R561-38-9

Article R561-38-7

French Monetary and Financial CodeIn force
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Updated 5 Nov 2023

The parent undertaking of a group mentioned in I of Article L. 561-33, which has as a subsidiary or branch at least one person mentioned in 1° to 2°e, 6°, with the exception of financial investment advisors and providers of participative financing services in respect of their activities mentioned in Article L. 547-4 , and 6° bis of Article L. 561-2 or belonging to an equivalent category under foreign law, shall set up an internal control system at group level in accordance with the procedures laid down in Article R. 561-38-4.

The procedures provided for under this system, as well as the controls carried out, make it possible in particular to ensure the implementation, within the group's branches and subsidiaries located in third countries, of measures equivalent to those provided for in Chapter I of this Title, in accordance with 1° of II of Article L. 561-33-2, as well as, where applicable, specific due diligence measures provided for by the regulatory technical standard adopted pursuant to paragraph 6 of Article 45 of Directive 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing.

The managers or any natural person mentioned in I and II of Article L. 612-23-1 of the parent undertaking of the group, under the supervision of the board of directors, the supervisory board or any other body exercising supervisory functions for the group, shall take the necessary corrective measures to ensure the effectiveness of the internal control system at group level, as well as at the level of the persons mentioned in the first paragraph of Article R. 561-38-4 and their branches and subsidiaries located abroad, including, where applicable, by implementing the specific vigilance measures mentioned above.

Once a year, the board of directors, the supervisory board or any other body exercising supervisory functions of the parent undertaking approves a report on the conditions in which internal control is ensured at group level and sends it to the supervisory authority of the persons mentioned in the first paragraph of Article R. 561-38-4.

Where the persons referred to in the first paragraph of Article R. 561-38-4 are affiliated to a central body, the latter shall perform the functions and assume the responsibilities of the parent undertaking of the group, within the meaning of this section.

Mariela Petrova

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Common Questions

Working with a corporate lawyer in France — Q&A

Any time a strategic decision changes how the company is owned, governed or contractually bound — incorporation, fundraising, M&A, restructuring, shareholder agreements, or major commercial contracts. Earlier engagement always costs less than later remediation.

A notary (notaire) is a public officer who authenticates specific deeds (mainly real-estate transfers and certain family-law acts). A corporate lawyer (avocat) advises on strategy, negotiates and drafts company documents, and represents you in disputes. The two roles complement rather than overlap.

Yes — most of our clients are foreign suppliers, investors or holding entities. We bridge the gap between French law and your home jurisdiction's expectations and deliver everything bilingually.

The SAS (Société par Actions Simplifiée) is the default choice for most international structures: flexible governance, single shareholder allowed, no minimum capital, and works cleanly with foreign holding entities. We assess SARL, SA, SCI on the merits when the situation calls for it.

Yes — communications with a French avocat are protected by the secret professionnel (Article 66-5 of the Law of 31 December 1971). This protection is broader than the common-law attorney-client privilege and applies to written and oral exchanges.

We work on fixed fees for clearly scoped engagements (incorporation, contract drafting, audits) and on monthly retainers for ongoing advisory. Hourly billing is the exception, not the default. You always know the cost before work starts.

Typical timeline is 2–3 weeks from KYC kick-off to RCS registration, assuming standard documentation. Holding-company structures, foreign-shareholder identification or in-kind contributions can extend this — we flag the gating items at the first meeting.

Absolutely. We routinely coordinate with your in-house counsel, expert-comptable or notaire — pragmatic collaboration is the norm, not the exception. We send them everything they need to do their part without duplicating work.

Mariela Petrova

Mariela Petrova

Avocate au Barreau de Paris

Toque #C2396

15+ Years In Corporate Practice

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Communications protected by professional secrecy — secret professionnel de l'avocat, Article 66-5 of the Law of 31 December 1971.

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