Domiciliation in residential premises: legal framework

By Yasmine EDDAM16 April 2025

There are precise rules governing the domiciliation of a company in residential premises. This is a common choice for start-up entrepreneurs, and must comply with a strict legal framework. Understanding the conditions and limits can help you avoid costly disputes.

Preconditions for domiciliation in residential premises

Domiciliation in residential premises requires the premises to be the personal home of the entrepreneur or the company's legal representative. This condition is fundamental.

The nature of the rights over the premises is of little importance. The director may be an owner, co-owner, tenant or simple occupant. The Court of Cassation confirmed this in a ruling dated 25 February 2016: a legal entity may be domiciled in residential premises rented by its legal representative if no activity is carried out there.

The premises must be the actual residence of the person concerned. A simple address of convenience is not sufficient. The Ministry of Justice clarified this point in its circular of 14 June 2004.

System applicable to individuals

Article L. 123-10 of the French Commercial Code distinguishes between two situations for individual traders.

Company with an establishment

If the company has a commercial establishment, the address of this establishment is normally used as the business address.

However, entrepreneurs may choose their home premises as their business address, provided there are no legal or contractual provisions to the contrary.

Company with no fixed establishment

If the contractor does not have a fixed place of business (as in the case of a plumber or electrician working on his customers' premises), he may declare his personal domicile "as the sole address of the business".

This possibility exists even where there are legal or contractual provisions to the contrary. The law allows certain restrictions to be overridden.

In both cases, this domiciliation does not entail any change in the use of the premises or application of the commercial lease regulations. There is no time limit.

Rules applicable to legal entities

The rules for domiciling companies in residential premises are similar but more nuanced, as detailed in our complete guide to commercial domiciliation.

No contractual or legal restrictions

A company may establish its registered office at the domicile of its legal representative for an unlimited period if there is no legal or contractual provision to the contrary.

This freedom, provided for in Article L. 123-11-1 of the French Commercial Code, allows permanent domiciliation without any special formalities.

Presence of contractual or legal restrictions

Where there are restrictions, domiciliation remains possible but for a maximum of five years. This period runs from the date on which the company is set up.

Prior notification is mandatory. The company must inform the lessor, the co-ownership association or the representative of the property complex in writing before applying for registration.

This notification enables the third parties concerned to know the starting point of the period during which the domiciliation will be binding on them.

As in the case of natural persons, this domiciliation does not entail any change of use of the building or application of the commercial lease regulations.

Legislative developments and a more flexible framework

The direct debit scheme has evolved significantly since its inception.

From restrictive origins to gradual opening up

Originally, specialised agencies offered domiciliation services without actually providing premises. This practice, developed outside the legal framework, led to abuses.

To remedy this, the law of 12 July 1967 required the trader to prove private use of the premises declared as the place of business.

This prohibition proved too restrictive for young companies. The law of 21 December 1984 therefore authorised, under strict conditions, temporary domiciliation in residential premises.

The contribution of the Economic Initiative Act

The Economic Initiative Act of 1 August 2003 marked a decisive turning point. It introduced a clear distinction between natural persons and legal entities and abolished the time limit in most cases.

This development reflects a desire to encourage the creation of businesses by making it easier for them to set up, as explained in our analysis of the choice of type of business address.

A return to caution

More recently, legislation has reintroduced certain restrictions, notably in the fight against money laundering and the financing of terrorism. These new provisions reflect a balance between freedom of enterprise and control of activities.

Obstacles and limits to domiciliation in residential premises

Provisions to encourage domiciliation

The Construction and Housing Code, long considered a major obstacle, has been made more flexible. Article L. 631-7-3 now authorises the exercise of a professional activity in residential premises if :

The activity is carried out by the occupier whose main residence is in the premises.
No customers or goods are received

Similarly, article L. 631-7-2 allows the mayor to authorise the carrying on of a professional activity in part of a residential premises, subject to certain conditions.

Persistent contractual restrictions

Restrictive use clauses in contracts remain potential obstacles. Bourgeois" or "strictly bourgeois" clauses in co-ownership regulations or leases often limit this possibility.

Non-competition clauses also raise complex issues. They generally do not affect the tenant of a premises, but may constrain an employee wishing to set up a competing business.

Unresolved practical issues

A number of questions remain unanswered, in particular the possibility of domiciling several companies in the same premises. Collective domiciliation arrangements differ considerably on this point.

The letter of the Commercial Code does not seem to preclude this. The domiciliation of several companies at the domicile of a common agent seems conceivable, but remains subject to interpretation by the courts.

Limits on commercial activity

Domiciliation in residential premises does not authorise intense commercial activity. This limitation preserves the distinction between the commercial domicile and the company itself.

The domicile is mainly used to locate the legal and administrative bodies, not to carry out the full commercial activity. It is not a sales office where large numbers of customers are regularly received.

In practice, the boundary between administrative and commercial activity remains blurred. The key is to avoid serious interference with the rights of other occupants of the building.

Misuse or excessive activity could jeopardise the benefits of this domiciliation and expose the entrepreneur to penalties.

To secure your planned domiciliation in residential premises and check that it complies with your particular situation, our team of lawyers is at your disposal for personalised advice.