The Agricultural Grouping of Exploitation in Common (GAEC)?

The GAEC, or Grouping d’exploitation d’exploitation en joint, has its peculiarities. What exactly is this and what is the use of the GAEC in the field of farming? All the answers to your questions about the pros and cons of a GAEC are here, in our article.

Article Plan

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  • The GAEC: definition
  • Common farming: the partners of the GAEC
  • Contributions to the GAEC
  • and share capital
    • Compensation within the GAEC
  • Obtain accreditation to constitute a
    • GAEC: maintain an accreditation
  • How does a GAEC work?
    • Common Farm Grouping and Stewardship
    • Leaving a GAEC
    • Dissolve a GAEC

The GAEC: Definition

A GAEC is a joint farm group. This status has been created in 1962 to enable farmers and peasants to group their means of production . Within a single structure, the GAEC, everyone retains its management powers over its operation. The image of the family farm is thus preserved.

A GAEC implies that operators are associated and have the desire to share their production and work. In order to set up a GAEC, partners must be at least 2 natural persons. The 2 partners of the GAEC must have full physical and legal capacity , as well as sufficient availability to do their part of the work required by the activity of the company as such.

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Joint farming: the associates of the GAEC

To be associated with a GAEC, certain prerequisites must be met:

  • Any partner of GAEC must be of age;
  • No maximum age: the partner of a GAEC must, on the other hand, be in full possession of his or her physical and mental means;
  • Two spouses may not associate in the GAEC unless a third party partner is a member of it;
  • The main activity of the GAEC involves operational work. Secondary activity may be carried out if and only if it does not preclude the carrying out of such operational work;
  • The geographical distance is limited between GAEC partners, to the extent reasonable;

Combining work via a GAEC is subject to French law : it is necessary to follow the provisions expected for any formation of Groupement agricole d’exploitation en commun.

Contributions to the GAEC

Any joint farm group shall be considered to be a holding company . This means the activity carried out by the company is oriented on the services offered by each partner, who is then called a member of the GAEC.

Thus, contributions to the GAEC can be made in kind, in cash but also in industry.

GAEC and social capital

A joint farm group has a share capital, which may not be less than EUR 1 500. Capital variability can be expected by partners.

It is possible to divest shares of the GAEC when associated. This falls under the common law of civil society. Any transferee partner must be able to participate in the operation.

Compensation within the GAEC

No provision is made for remuneration within a joint farm group. The remuneration does not depend on the contribution ( amount). A GAEC is an egalitarian regime : it must be remembered that the remuneration must be balanced, under penalty of prejudice.

Obtain Accreditation to Establish a GAEC

For any formation of GAEC, an accreditation is necessary, in order to exercise in complete transparency. It is issued by Accreditation Committees present at the departmental level and composed of the Prefect, the Departmental Director of Agriculture and Forestry, the General Directorate of Labour. A representative of the Departmental Directorate of Taxes must also be part of this committee, as well as 4 recognized farmers. One of these farmers must have been appointed by the Departmental Chamber of Agriculture .

Good to know : the National Accreditation Committee also exists. Apply for recognition of accreditation as well as your draft articles of association and a document specifying the names of the persons who are intended to be part of the GAEC. The GAEC National Accreditation Committee may quite require thatthe members of the Joint Farm Group be auditioned .

Once your application for accreditation has been completed and received, the Committee has three months to render its decision. Warning : a response failure is not equivalent to tacit positive response. Applicants must refer to the NAC within 2 months. He then has an additional 3 months to decide. Without reply, the GAEC is entitled to be constituted implicitly . Any refusal of accreditation must be duly justified by the NAC, which may then be brought before it (appeal).

GAEC: maintain an accreditation

order for an accreditation to be maintained in full transparency, it is imperative that the GAEC be maintained in the same configuration and composition. Associates of the Groupement agricole d’exploitation en commun are required to inform the NAC with a view to any changes to the GAEC In .

It should be noted that an accreditation of the formation and activity of GAEC can be withdrawn at any time if the conditions mentioned above are not complied with.

How does a GAEC work?

A joint farm group is required to participate actively in the holding. Each partner of this company is involved. The purpose of the GAEC is thus limited: the GAEC cannot be used for the distribution of the production of each holding involved in the GAEC alone.

Common farm grouping and stewardship

The Articles of Association, or the Assembly of Partners, failing that, must designate a manager, as in many companies. The manager must be one of the partners of the GAEC.

As in an LLC, liability is limited in a joint farm group. This means that in the case of a debt, the responsibility of each partner is double their contributions to the GAEC.

Leave a GAEC

It is possible to leave a GAEC without having to dissolve it . The agreement of the other associates is paramount. However, a decision of the High Court is also possible if no vote is taken or found to be valid.

Dissolve a GAEC

Depending on the causes common to any corporation incorporated by statutes, a joint farm group may also be dissolved. A partner’s death does not result in an obvious dissolution of the ECAP. Any heir can then take over within the Groupement agricole d’exploitation en commun by becoming a member or member of the GAEC. A new application for approval will be made.

To set up your GAEC, apply for special assistance and special GAEC loans (possibility valid for the first 3 years of operation).