Characteristics of companies in the Social and Solidarity Economy (ESS)

Houdart A&C, as a chartered accountant and statutory auditor, provides support to entrepreneurs who aspire to bring more meaning than just the realization of profits to their entrepreneurial life by setting up companies that meet the criteria of the Social and Solidarity Economy (SSE) as well as companies that wish to adapt their statutes to meet SSE requirements.

Various social forms

The Social Solidarity Economy (SSE) refers to a group of companies organized in the form of cooperatives, mutual societies, associations, foundations or commercial companies whose SSE status has been established at the commercial court registry, and whose internal functioning  and activities are based on a principle of solidarity and social utility.

These companies are therefore characterized by the diversity of possible legal forms. But the procedures for recognition of SSE status may vary depending on the corporate form adopted, especially if it is a commercial company.

A Purpose Beyond Profit Sharing

The objective of these enterprises can be, through their activities, to provide support to people in fragile situations, fight against social or cultural exclusion, or contribute to sustainable development in the environmental or social sense.

In general, the profit-oriented objective of these enterprises must be limited. The use of profits is strictly regulated, and results must essentially be reinvested in the structure.

A democratic governance

These companies adopt democratic and participative management methods, organized by the articles of association.

ESUS approval

The ESUS authorization allows financing from employee solidarity savings and entitles individuals investing in certain categories of SMEs having obtained this authorisation to tax reduction schemes (wealth tax, income tax).

This authorization requires, on the one hand, to demonstrate that social utility is the main objective of their activity, and on the other hand, to have a remuneration policy constrained by the statutes respecting to two conditions, stipulated in Article 11 of the law relating to the ESS :

  • the average sums paid, including bonuses, to the five highest-paid employees or managers must not exceed an annual ceiling set at seven times the legal or collectively agreed minimum wage,
  • The remuneration paid to the highest-paid employee must not exceed an annual limit set at ten times the legal or collectively-agreed minimum wage,

Specific funding

Certain public and private funding is reserved exclusively for SSE structures. These include, among others, certain equity loans from BPI France or the State through the Caisse des Dépôts, certain regional aid programs for the economic development of ESS enterprises, and specific crowdfunding platforms such as Anaxago, SmartAngels, or Wissed for equity investment, or Spear, Babyloan et Prêt de chez moi for microcredit.

The purpose of ESS companies: promoting ethical principles

The purpose of the ESS enterprise is social or environmental utility. It represents a different mode of entrepreneurship.

Publicly claiming this can be an opportunity in terms of image and value sharing with customers.

It can also enhance the company’s visibility as a supplier in public and private responsible purchasing schemes.

The Legal Framework of the Social and Solidarity Economy

The Law of July 31, 2014

ESS companies benefit from a strengthened legal framework provided by Law No. 2014-856 of July 31, 2014, amended on the social and solidarity economy.

Article 1 of this law extends the scope of the ESS, historically reserved for certain forms of companies (associations, foundations, cooperatives, and mutuals), to non-cooperative commercial companies that, like other ESS enterprises, adhere to the founding principles of this mode of entrepreneurship described above.

Specific statutory provisions

The specific purposes and constraints of ESS companies are reflected in certain mandatory provisions in their articles of association :

  • Social Utility: The corporate purpose must fulfill one of the following three objectives: providing support to vulnerable people, contributing to the fight against exclusions and health, social, economic, cultural, or educational inequalities, promoting sustainable development in its social, environmental, or energy transition dimensions.
  • Governance: The articles of association must define and organize a democratic governance. Participation in strategic decision-making is open to various stakeholders involved in the company’s achivements : shareholders, employees, and clients. An entity that brings them together and has oversight over management decisions must be established. Its members have rights to information and participation in decisions that are not tied to capital contributions.
  • Reservations : The majority of profits are dedicated to the objective of maintaining or developing the company’s activities. This results in two obligations: allocating at least 50% of the profits for the financial year to retained earnings and mandatory reserves, and creating, in addition to the legal reserve, a statutory reserve for development funds to which at least 20% of the annual profits are allocated, until the development fund reaches 1/5 of the share capital.
  • Amortization and Capital Reduction: The company is prohibited from amortizing its capital and carrying out a capital reduction that is not motivated by losses, except when this operation ensures the continuity of its activities. A decree specifies the conditions under which this operation can be carried out and defines the notion of activity continuity.
  • Salary Policy: When a company applies for ESUS accreditation, the constraints related to the salary policy mentioned above must be stated.


ESUS-approved companies SSE trading companies (non-cooperative)
2 mandatory statutory mentions :
– Social utility
– Salary policy
Trading companies 5 mandatory statutory mentions :
– Social utility
– Governance
– Reserves
– Amortization and capital reduction
Salary policy
4 mandatory statutory mentions :
– Social utility
– Governance
– Reserves
– Amortization and capital reduction

How to establish a Social and Solidarity Enterprise

Adapting the company’s articles of association

Houdart A&C can help you draw up or modify your articles of association to ensure that the various provisions detailed above are clearly indicated and legible, and to choose, set up and consult the body that will bring together the various stakeholders, including employees, which will be informed of strategic decisions and will have a right of review over them to ensure their coherence with the company’s corporate purpose.

Request the mention ESS when registering at the registry of the commercial court

We can also accompany you to complete the formalities of creation of the structure at the Business Formality Centre (CFE) and apply to be registered in the Trade and Companies Register (RCS) as a SSE company so that the so that the clerk of the court places the mention on the Kbis registration certificate.


The next step is to communicate on your company’s values and corporate purpose, in order to engage future stakeholders and potentially seek funding to support its development.

Applying for ESUS approval

If you wish to go further in your process and apply for ESUS approval, your application must be addressed to the DIRECCTE (Regional Directorate for Enterprises, Competition, Consumption, Labor, and Employment) of the region to which your company belongs.

Expanding the social purpose of your company with a mission or purpose, a first step towards considering social or environmental issues

The PACTE Law (Loi n° 2019-486 du 22 mai 2019, JO du 23), Official Journal of May 23) modified the definition of the corporate purpose of a company, allowing for the inclusion of a purpose in its articles of association and creating the status of a mission-driven company.

Article 1832 of the Civil Code states that the purpose of a company is to make a profit or achieve savings for the shareholders. Since the PACTE Law, Article 1833 paragraph 2 specifies that the company is managed in its social interest, taking into account the social and environmental issues related to its activities.

Furthermore, Article 1835 of the Civil Code now allows for the possibility of amending the articles of association and including a “purpose, consisting of the principles that the company establishes and for the respect of which it intends to allocate resources in the pursuit of its activities.” This provides an opportunity for any company to better integrate long-term societal or environmental considerations into its purpose. Its profit-oriented objective does not disappear, but it is associated with the pursuit of objectives related to the public interest.

Finally, the PACTE Law introduced the status of a mission-driven company. Like the raison d’être, this involves pursuing social and environmental objectives within the scope of the commercial company’s activity, as stated in Article L. 210-10 of the Commercial Code (environmental protection, local employment development, etc.). However, this status of a mission-driven company is more stringent, as it must be declared to the commercial court registry. The company’s articles of association must define the mission, its social, societal, or environmental impact, quantified objectives, and monitoring procedures. The execution of the objectives must also be verified by an independent third party.

Useful links

Frequently Asked Questions about Social and Solidarity Enterprises (SSE)

Can any company be considered as an SSE?

Article 1 of the Law of July 31, 2014 broadens the scope of SSE, historically reserved for  certain types of enterprises (associations, foundations, cooperatives, and complementarity health insurance companies), to non-cooperative commercial companies that adhere to the founding principles of this entrepreneurial approach (social utility, democratic governance, allocation of the majority of profits to reserves), like other SSE enterprises.

What is the difference between raison d’être and corporate purpose?

Provided for in article 1835 of the French Civil Code, the raison d’être is complementary to the corporate purpose. It arises from a genuine and shared intention of various stakeholders. The profit objective of the company does not disappear but is associated with the pursuit of objectives related to the public interest. This offers an opportunity for any company to better integrate long-term social or environmental considerations into its purpose.

Some companies support their raison d’être with concrete commitments that are sustained over time.

Is it necessary for a company to meet SSE criteria to have a raison d’être ?

The process of including a purpose in the articles of association is independent of its status as a Social Solidarity Economy (SSE) company. The raison d’être does not have any legal binding character, unlike the status of a mission-driven company or SSE company, which requires certain mandatory provisions in its articles of association.

What is the difference between SSE and ESUS approval ?

ESUS approval requires being a company operating within the Social and Solidarity Economy (SSE). This approval, which grants access to specific funding and enables investors to benefit from tax reduction measures, is an additional step in the establishment of SSE. The application for approval is addressed to the Direccte (Regional Directorate for Enterprises, Competition, Consumption, Labor, and Employment), and the conditions for ESUS approval are defined by Decree No. 2015-719 of June 23, 2015.

Is it possible to reduce the capital of an SSE company  ?

The law of July 31, 2014 stipulates a “prohibition for the company to amortize capital and to carry out a capital reduction not motivated by losses, except when this operation ensures the continuity of its activity”. Decree N°2015-760 of June 24, 2015 clarifies the notion of continuity of its business and the specific conditions under which this operation may be carried out.

Why use a chartered accountant specialized in the social solidarity economy sector ?

SSE companies, which reconcile economic activity with social utility, must, on the one hand, comply with the accounting, tax, and administrative deadlines common to any company, and on the other hand, meet the legal requirements specific to their particular status, such as social utility, governance, profit allocation, salary policy in the case of ESUS approval, etc. The expertise and guidance of a chartered accountant specialized in this field for the prepation and the monitoring of your accounting will ensure the effective management of your project.