A civil company is a non-commercial company whose purpose is civil and whose activities are, in fact, civil and not commercial. Civil companies may not regularly perform commercial acts as a matter of course, unless their purpose is changed to a commercial purpose. When a civil company engages in commercial activity, the activity has the legal consequences implied by its commercial nature notwithstanding that the civil company performing the activity lacks commercial powers. Thus, the civil nature of the company does not affect the nature of any commercial act performed.

Civil companies are governed by the Civil Code of the Principality of Monaco (Vol. III, Section IV), by law no. 797 of February 18, 1966, on non-trading companies, and by Order no. 3573 of May 11, 1966, setting out regulations for enforcing law no. 797.

Non-commercial companies may be formed by an authenticated document (i.e., the document is prepared with the assistance of a notaire) or privately (usually with the assistance of a conseil juridique or an accountant. There is no minimum capital requirement.

A civil company may have the same legal structure as limited a company, but it will then also be subject to Sovereign Order of 5 March 1895 regulating companies with shares. This Order does not confer a commercial character on companies with share-capital; rather, the civil company's purposes and operations determine whether the company is considered trading (commercial) or non-trading (civil) in nature.

Unless the form chosen for the company in question is a Monegasque general business corporation (societe anonyme monégasque, or S.A.M.), a non-commercial company that performs no commercial activity is not:

• subject to liquidation if its capital becomes impaired,
• obligated to keep the books and records required of trading companies, or
• required to request Monegasque government authorization before its establishment.

The Monegasque Civil Code requires civil companies to meet the same minimal standards imposed on all companies, namely:

• the purposes must be lawful, i.e. respect public order and good morals,
• the company must be established in the joint interest of the partners, and
• the company must be founded with the actual participation of the partners (money, property, or personal services).

The profits and losses of a civil company must be shared in proportion to the partners' (shareholders') participation in the capital (article 1961). The entire profits may not be paid to a single shareholder, and the absence of the contribution of any shareholder to cover company losses is unlawful (article 1693). However, the responsibility of the partners for company debts is several, not joint (article 1700).

There are three main reasons for the dissolution of civil companies:

• the end of the period defined in the articles of association,
• the decision of the partners, and
• a permitted election by of one of the partners.

Other reasons may also be taken into consideration:

• the fulfillment of the purpose for which the company was formed or or the impossibility of its performance,
• loss of the contribution of one of the partners before transfer,
• the decision of one of the partners in a limited duration company,
• the death of a partner, and
• the bankruptcy or other disability of one of the partners.

The partners (shareholders) of a Monegasque civil limited company have complete discretion to fix the duration of the company and to participate in its management. The partners are responsible to creditors of the civil company for the full stated amount of their shares or capital contribution, not simply their cash contributions towards their shares or capital.

Non-commercial companies must register with two months of creation in a special register kept by the Register of Commerce Department and provide the following information:

• the form of the company,
• the company name and any abbreviations used to identify the company,
• the company purpose,
• the principal activity to be performed by the company and, if applicable, any secondary activities,
• the address of its registered offices, which must be in the Principality of Monaco,
• the full names and addresses of each person appointed as a manager of the company,
• the total stated capital of the authorized shares, and
• the duration of the company

The preparation of the formal articles of association and their registration must be done within 10 days of formation in the case of an authenticated document (i.e., a document done with a notaire) or within a month for a private document to validate the formation of the company. Similar requirements apply for subsequent modifications of the articles, for the sale of shares, or the other transfer of interests in the company.

For additional reference material, see "Non-Trading Companies", The Principality of Monaco, A Business Guide, Principality of Monaco, Department of Economic Expansion, 1996.