SAS vs. SARL: What Are the Differences ?

The SAS (Société par actions simplifiée) and SARL (Société à responsabilité limitée) are two of the most common types of business entities in France. Both entities offer limited liability protection for their shareholders, but there are some key differences between the two structures.

Minimum Share Capital

The minimum share capital for a SAS is €1, while the minimum share capital for a SARL is €7,500. This means that it is possible to set up a SAS with very little investment, which can be a major advantage for small businesses.

Number of Shareholders

There is no limit on the number of shareholders that a SAS can have, while a SARL is limited to a maximum of 100 shareholders. This makes the SAS a more flexible option for businesses that may want to have a large number of shareholders in the future.

Management Structure

A SAS is managed by a single president, who can be a natural or legal person. A SARL can be managed by one or more managers, who must be natural persons. This means that a SAS can have a more flexible management structure, as the president does not need to be a shareholder in the company.

Transfer of Shares

The transfer of shares in a SAS is generally unrestricted, while the transfer of shares in a SARL is subject to certain restrictions. For example, the transfer of shares in a SARL may require the approval of the other shareholders. This makes it more difficult for shareholders to exit a SARL, which can be a disadvantage for businesses that want to attract investors.

Taxation

Both SAS and SARL are taxed as corporate entities, meaning that the company’s profits are taxed at the corporate level and then taxed again when they are distributed to shareholders as dividends. However, there are some differences in how the two entities are taxed. For example, SAS are not subject to the same level of social security contributions as SARL.

Conclusion

The SAS and SARL are both popular business entities in France, but they offer different advantages and disadvantages. The SAS is a more flexible option with a lower minimum share capital and no limit on the number of shareholders. The SARL has a more traditional management structure and more restrictions on the transfer of shares. The best choice for a particular business will depend on its specific circumstances.

In addition to the above differences, there are a few other things to keep in mind when choosing between a SAS and a SARL.

• The SAS is a newer type of entity than the SARL, and as such, there is less case law and legal precedent on how it is interpreted. This can make it more difficult to predict how a court would rule in a dispute involving a SAS.
• The SAS is more complex to set up and operate than the SARL. This is because there are more legal requirements that must be met, and there are more options that the founders must choose from.
• The SAS is generally more expensive to set up and operate than the SARL. This is because of the higher legal fees and the additional costs associated with more complex management and accounting procedures.

Ultimately, the decision of whether to form a SAS or a SARL is a complex one that should be made on a case-by-case basis. The best way to choose the right entity for your business is to consult with an experienced French lawyer.

Here is a table summarizing the key differences between SAS and SARL:

Conclusion

The SAS and SARL are both popular legal structures for businesses in France. The best structure for you will depend on your individual circumstances. If you are not sure which structure is right for you, it is advisable to consult with a lawyer.