PACTE Law and Statutory Auditor: Thresholds and Trade-offs in 2026

A company must appoint a statutory auditor (commissaire aux comptes) once it exceeds, at a financial year end, two of three thresholds: €5 million total assets, €10 million net turnover and 50 employees on average. These thresholds, raised by Decree No. 2024-152 of 28 February 2024, apply to financial years starting on or after 1 January 2024 and cover all commercial company forms. Below the thresholds, a company may appoint an auditor voluntarily, for example for a three-year small-company audit engagement (ALPE, professional standard NEP 911).

Updated 19 November 2025. France's PACTE Law No. 2019-486 of 22 May 2019 and its implementing Decree No. 2019-514 of 24 May 2019 substantially reshaped the regime governing the appointment of statutory auditors (commissaires aux comptes, or CAC) in France. Seven years after entry into force, the framework is stable: a single set of thresholds applying to all company forms, and a simplified engagement — the audit of small entities (ALPE). For a Paris-based director, the question is no longer simply whether a statutory auditor "must" be appointed, but rather how to arbitrate between no auditor, a 3-year ALPE engagement and a classic 6-year statutory audit, taking the group dimension into account.

Before 2019: an appointment regime by legal form

Until 2019, French law applied a fragmented regime. All sociétés anonymes (SA) were subject to a statutory auditor by construction. Sociétés par actions simplifiées (SAS) were subject above specific thresholds of €1M balance sheet, €2M turnover and 20 employees (two out of three). SARL and SNC followed yet different thresholds (€1.55M / €3.1M / 50 employees). The result: an SME could be compelled to appoint a statutory auditor while a comparable company under a different legal form was exempt.

After PACTE: a unified threshold framework

The PACTE Law and Decree 2019-514 removed this form-based logic and introduced common criteria, set in Article D221-5 of the Commercial Code, to which the rules for each form refer (L227-9-1 for the SAS, L223-35 for the SARL). SAS, SARL, SA, SCA and SNC now fall under the same criteria, since raised by Decree No. 2024-152: €5M balance sheet, €10M turnover excluding VAT, 50 employees. The SA retains a historical specificity (appointment remains compulsory for SAs making a public offering), but the common core applies to the overwhelming majority of structures.

Entry into force and exercises concerned

The new rules apply to financial years opened on or after 27 May 2019, the publication date of the decree. Statutory auditor mandates in progress at the time of the reform continued to their legal term (6 years), unless a joint request from the governing body and the ordinary general meeting (AGO) sought early termination — a faculty specifically offered by the PACTE Law for companies that fell below the new thresholds.

The €5M / €10M / 50-employee triptych (two criteria out of three)

A commercial company must appoint a statutory auditor as soon as, at the closing of a financial year, it exceeds two of the three following thresholds:

• Total balance sheet > €5,000,000
• Turnover excluding VAT > €10,000,000
• Average headcount > 50 employees

Exceeding a single threshold is not enough to trigger the obligation. Conversely, exceeding two thresholds in a single financial year triggers the appointment obligation from the following exercise. The complete regime is detailed in our statutory auditor obligations analysis.

How to calculate your thresholds: balance sheet, turnover excluding VAT, average headcount

The total balance sheet corresponds to the sum of the net amounts of asset items (fixed assets + current assets + prepayments). The turnover excluding VAT is the operating turnover of the exercise (account 70), excluding VAT and excluding financial or exceptional income. The average headcount is calculated under Article L130-1 of the Social Security Code: monthly average of salaried headcount over the previous calendar year, in full-time equivalent.

Required duration of exceeding: is one financial year enough?

Yes. Contrary to a common misconception, exceeding two thresholds over one closed exercise is enough to trigger the obligation to appoint a statutory auditor as of the next exercise. By contrast, the obligation only ends when the term expires, and only if the company has not exceeded two of the three thresholds during the two financial years preceding that expiry (Article D221-5). A one-off activity peak can therefore push a Paris-based SME into the scope of the obligation for several years.

Parent company controlling one or more subsidiaries

Any company that controls, within the meaning of Article L233-3 of the Commercial Code, one or more other entities is required to appoint a statutory auditor as soon as the combined parent and subsidiaries exceed two of the three €5M / €10M / 50-employee thresholds in combined figures, by simple addition of each company's figures (Article D. 821-171 of the Commercial Code). This rule prevents a group from artificially segmenting its activity across several below-threshold entities to escape statutory audit.

"Significant" subsidiary: thresholds €2.5M / €5M / 25 employees

Within a group itself required to appoint a statutory auditor at the top because, as a whole, it exceeds two of the three thresholds of €5M balance sheet, €10M turnover and 50 employees, each significant subsidiary must also have its own statutory auditor. A subsidiary is qualified as significant when it exceeds two of the three following thresholds: €2.5M balance sheet, €5M turnover excluding VAT, 25 employees. The threshold is deliberately lowered to ensure homogeneous audit coverage within the group.

Holding + subsidiaries architecture: how to map the obligation

A patrimonial holding company that owns a corporate-taxed SCI, an operating company and an e-commerce subsidiary must map the situation methodically. The figures of all the companies are added up at the top; if the whole exceeds two of the three €5M / €10M / 50 thresholds, the holding appoints a statutory auditor, and each subsidiary exceeding two of the three €2.5M / €5M / 25 thresholds appoints its own. Conversely, if the whole, with figures added up, does not exceed two of the three €5M / €10M / 50 thresholds, no commercial company in the group has to appoint a statutory auditor on size grounds, since each one's figures are included in the combined total; the SCI, as a civil company, is subject to its own thresholds if it carries on an economic activity (two of three: 50 employees, €3,100,000 in turnover or resources, €1,550,000 in balance-sheet total, Article L. 612-1), and specific cases (public offering, associative status, public-interest mission) can also require an auditor.

NEP 911: scope, deliverables, mandate duration (3 years)

The ALPE is a simplified statutory audit engagement, codified by professional standard NEP 911 published by H2A (France's High Audit Authority, formerly H3C since 2024). The mandate runs for 3 exercises instead of 6, and the deliverables are tighter: a report on the annual accounts, a report identifying significant financial, accounting and management risks, and the report on regulated agreements where applicable.

Beyond certification itself, a statutory auditor may provide the audited entity with certain services, strictly framed by the independence requirement: these are the services other than the certification of accounts. Knowing what a statutory auditor may and may not invoice alongside the audit avoids entrusting them with an engagement that would create an incompatibility.

Concrete differences with a classic 6-year statutory audit

A classic statutory audit involves a 6-year mandate, a comprehensive review covering all audit assertions, and an intervention on the semi-annual closing for public-offering companies. The ALPE focuses on identified significant risk areas, without seeking the same documentary exhaustivity. The annual budget is on average 25 to 40% lower than that of a classic statutory audit, for a deliverable that nevertheless carries the same legal weight.

When ALPE is the right economic trade-off

ALPE becomes relevant when the company sits below the legal thresholds but wishes to provide external assurance to its stakeholders: banks renewing credit lines, funds entering the capital, partners on public tenders, or a parent company seeking moderate assurance on a subsidiary. This is the trade-off we frequently recommend at Cabinet Hayot Expertise for startups raising in Paris, starting from Series A. The subject is detailed in our guide on statutory auditing for hyper-growth JEIs.

Credibility with banks, investors and public partners

A below-threshold company can voluntarily appoint a statutory auditor. The cost incurred secures the reading of the accounts by third parties: a banking pool in syndication, an investor in due diligence, a public body reviewing a grant or tender application. The auditor's signature reduces information asymmetry and often shortens review timelines.

JEI, startups raising capital and public tenders

A pre-Series A JEI is not required to appoint a statutory auditor, but the cost-benefit ratio is often favourable as soon as the round exceeds €2M. For public-tender players — construction, government digital services, ministry contracts — voluntary appointment is sometimes a scoring factor at the application stage.

Standard convention, mandate duration, indicative cost in Paris

The voluntary appointment convention can be concluded for a freely set duration — typically 3 years, to align with the ALPE duration. The annual budget of a statutory auditor on a Paris-based SME under an ALPE engagement typically starts between €4,500 and €9,000 excluding VAT depending on scope. For a classic statutory audit, expect €12,000 to €25,000 excluding VAT per exercise on an SME with €8M to €15M turnover.

Appointment by the AGO, registry filings, publication

The statutory auditor is appointed by the ordinary general meeting or, failing that, by the body designated by the bylaws. The appointment is filed with the commercial court registry within one month of nomination, and published in a legal gazette. The identity of the principal auditor — and where applicable the alternate, which became optional for most structures since 2017 — appears on the Kbis extract.

Resignation, removal, renewal

The mandate can end through resignation of the auditor (with notice and information to H2A), removal for misconduct (judicial procedure), or non-renewal at maturity. Renewal is not tacit: it must be expressly resolved by the AGO. Failing renewal, a company that remains within the scope of the obligation exposes itself to the nullity of its corporate resolutions.

Voluntary exit after PACTE

The PACTE Law opened, on a transitional basis, the possibility for companies that fell below the new thresholds to terminate their statutory auditor's mandate early, by joint decision of the governing body and the AGO. This faculty essentially concerns mandates in progress in 2019. For mandates appointed since then, the principle of irrevocability outside fault applies fully.

Nullity of corporate resolutions (Article L821-5)

Article L821-5 of the Commercial Code sanctions failure to appoint: resolutions taken without a statutory auditor when one should have been appointed can be annulled. The nullity action can be initiated by any interested party (shareholder, creditor, administration), with the effect of calling into question the approval of accounts, the distribution of dividends or the validity of a capital operation.

Director's liability and confusion with the transformation auditor

Failure to appoint engages the director's civil liability. In the event of a corporate transformation, a transformation auditor may be required: this appointment is often wrongly confused with that of a statutory auditor, whereas the two engagements are distinct — the first is one-off, the second continuous. Our outsourced CFO service secures these tipping points at the closing stage.

Indirect tax and banking consequences

The absence of a compulsory statutory auditor weakens the evidential value of the accounts. In the event of a tax audit, the administration may consider unaudited accounts as less reliable. In a banking pool, covenants frequently require the production of audited accounts; failing this, the bank may declare the loan immediately repayable.

The practical trade-off: ALPE, classic audit, or no auditor

In the files we handle in Paris, the trade-off is not binary. Three scenarios coexist:

1. Company clearly below thresholds, with no external shareholders or structured banking pool → no statutory auditor.
2. Company below thresholds but with minority investors, medium-term bank debt or public tenders → 3-year ALPE.
3. Company above thresholds, or top of a group that exceeds them in combined figures → classic 6-year statutory audit; two statutory auditors if the company is required to publish consolidated accounts.

The underestimated risk: "invisible" groups through SCIs or holdings