There are several legal forms in France you can use to set up your own business: the sole proprietorship (or micro-enterprise), the “entreprise unipersonnelle à responsabilité limitée” (EURL, French for “single-shareholder limited liability company”), and the “société par actions simplifiée unipersonnelle” (SASU, French for “single-shareholder simplified joint-stock company”). In this guide, we’ll focus on the SASU, including its definition, operation, advantages, and creation.

What’s in this article?

• What is an SASU?
  
• What are the main features of an SASU?
  
• How do SASUs work?
  
• The tax system for SASUs
  
• Pros and cons of SASUs
  
• How do I set up an SASU?
  
• Transferring an SASU
  
• Transitioning from an SASU to an SAS
  
• What’s the difference between SASUs and EURLs?
  

What is an SASU?

A single-shareholder simplified joint-stock company, or SASU, is a form of simplified joint-stock company (SAS) with a single shareholder. This shareholder can be an individual or a legal entity, such as a company or an association.

Transitioning from an SASU to an SAS and back to an SASU can be done at any time without affecting how the company is governed or operates. Entrepreneurs in France value this corporate form for its flexibility in organisation, management, and scale.
What are the main features of an SASU?

What are the main features of an SASU?

Most activities are permitted under an SASU, with the exception of regulated activities such as tobacco retailing, insurance, savings, capitalisation, and performing arts.

Similar to the SAS, the SASU is a joint-stock company in which the sole shareholder owns shares representing the share capital. If the SASU makes a profit, it can pay dividends to shareholders. Note that SASUs do not have access to public capital and cannot be listed on the stock exchange.

Share capital

The shareholder is free to determine the amount and composition of the share capital, which may be contributed in cash (liquid assets) or in kind (such as materials, vehicles, buildings, goodwill, etc.). The shareholder’s financial liability is limited to the value of their contributions in cash or in kind.

Half of the cash contribution must be deposited in the business account of the SASU when the company is established, and the remaining half must be available within five years. An auditor must value contributions in kind if a single contribution exceeds €30,000 or if the total value of all contributions in kind exceeds half of the share capital.

Note the minimum share capital required for an SASU is symbolic, set at €1.

How do SASUs work?

The single shareholder in an SASU has the unilateral authority to make all decisions regarding the business’s operation. Every decision must be documented in a dedicated register, which must be maintained for six years.

The shareholder is also responsible for drafting the SASU’s articles of association, approving dividend distributions, and appointing the business’s president, who must be specified in the articles of association. They can appoint a third party as president to represent the SASU or manage it themselves. If a president is replaced, the articles of association must be updated accordingly.

The president oversees the daily management of the SASU and is tasked with submitting the company’s annual financial statements to the clerk of the Commercial Court, which must be pre-approved by the sole shareholder. The president bears civil and criminal liability in relation to the SASU. The sole shareholder has the freedom to impose restrictions on the president’s actions and appoint a managing director and deputy managing director to support the president in their responsibilities.

Every SASU must draft articles of association, maintain proper accounting records, and submit annual financial statements to the clerk of the Commercial Court.

The tax system for SASUs

SASUs are liable for corporate income tax (IS, from the French “impôt sur les sociétés”) by default, but they may opt to pay income tax (IR, from the French “impôt sur le revenu”) instead, for up to five years. To qualify for income tax, SASUs must meet specific criteria, such as being established less than five years ago and having annual sales of less than €10 million, among other requirements. The French government has provided further details about transitioning from IS to IR.

The sole shareholder’s tax status

Income received by the sole shareholder in the form of dividends is categorised as income from movable capital. This income is subject to a flat tax rate of 30% – 12.8% for income tax and 17.2% for social security contributions. The shareholder can also apply the income tax rate table, which provides an alternative method for calculating income tax.

The president’s tax status

As a salaried employee, the president is subject to income tax under the salary and wages category. They can claim a 10% allowance on their taxable remuneration or deduct actual expenses such as accommodation, meals, and travel.

As an employee, they are also covered by the general social security system, which includes family allowances, health insurance, and pension schemes. To receive these benefits, they must pay social security contributions.

The sole shareholder may also be the president of the SASU. In this scenario, they may receive a combination of salary and dividends.

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Pros and cons of SASUs

SASUs offer advantages for entrepreneurs looking to establish their own business.

Pros

SASUs are recognised by banks, customers, and suppliers. The sole shareholder enjoys significant autonomy in terms of organisation, governance, and management. Decisions are made unilaterally without the need for a vote or quorum.

SASUs can be adapted to most commercial or manufacturing activities. As an employee, the president is covered by social security. They can also receive dividends if the SASU makes a profit.

Moreover, the transition from an SASU to an SAS is easy because they share the same legal form. The single shareholder can operate independently at first and add partners or increase share capital without having to change the corporate structure.

Cons

SASUs do have drawbacks, particularly in financial terms. Like the SAS, the process of drafting the articles of association can be intricate and costly, typically ranging from €1,500 to €2,000 when handled by a legal professional. The social security costs associated with an SASU can also be substantial. Finally, an SASU cannot be listed on the stock exchange or participate in the regulated market.

How do I set up an SASU?

The establishment of an SASU involves five stages, starting with the drafting of the articles of association. These articles, drafted by the sole shareholder, outline the operational procedures of the company.

Next, the single shareholder selects the registered office (or domiciliation) of the SASU, followed by the constitution of the share capital, which is deposited in the company’s business bank account.

Once the share capital has been deposited, the single shareholder must receive a notice of the formation of the SASU, which is published in a legal gazette (JAL, from the French “journal d’annonces légales”; the French government provides more information about publishing the legal announcement).

Once the announcement has been published, the shareholder can register their SASU online via the business creation portal, submitting the required supporting documents. Learn more about registering an SASU from the French government.

Associated costs

Establishing an SASU or an SAS typically includes these expenses:

• Drafting the articles of association: From €1,500 to €2,000 for a legal professional, or €200 using a legal platform (you can also draft them yourself for free)
  
• Engaging a contributions auditor (if applicable): From €500 to €3,000
  
• Publishing the legal notice: 138 for a SASU and €193 for a SAS
  
• Registering the business: €37.45 for a commercial operation or from €15 to €200 for a small-scale activity
  
• Declaring the beneficial owners: €21.41
  
• Domiciliation: Cost varies
  

Transferring an SASU

The sole shareholder can transfer shares to a family member or a third party without incurring any charges. The buyer of the shares pays a registration tax, set at 0.1% of the share transfer price.

Transitioning from an SASU to an SAS

An SASU can be transitioned to an SAS in three ways:

• When new partners join the company and there is a corresponding increase in share capital
  
• When transferring or selling shares to a third party
  
• If the sole shareholder dies
  

This is merely a company change, not a change in legal form. To transition from an SASU to an SAS, all you need to do is:

• Register the transfer of shares with the Companies Tax Office (SIE, from the French “Service des Impôts des Entreprises”)
  
• Update the articles of association accordingly
  
• Publish an announcement of the change in a legal gazette
  
• Update the Kbis register
  

What’s the difference between SASUs and EURLs?

Like SASUs, EURLs are single-entity-owned corporate forms. But unlike SASUs, the manager of an EURL must be a person and cannot be a legal entity.

Once set up, EURLs require an immediate deposit of 20% of cash contributions into their bank account, unlike SASUs, where only half of the cash contributions are initially deposited.

Taxwise, EURLs are subject to IR but may opt to pay IS instead. Unlike the president of an SASU, the manager of an EURL is not considered an employee.

Finally, the EURL is composed of corporate units, not shares. The registration fees for corporate units are calculated at 3% of the sale price, with an allowance of €23,000.