There are several types of companies in France, including the SAS, SARL, and SA, to name just a few. These acronyms are so similar that it can be hard to differentiate them. But there are several differences that are important to know about as a business owner in France. This article will look at the specifics of the SAS and answer questions such as: What is an SAS? What is the legal status of an SAS? How many partners are required? How do you set up an SAS in France? Here, we’ll take a closer look at the “société par actions simplifiée” (SAS, French for “simplified joint stock company”), and how it works.

What’s in this article?

• What is an SAS?
  
• What are the main features of an SAS?
  
• How does an SAS work?
  
• What tax regime does an SAS fall under?
  
• What are the advantages of an SAS?
  
• What are the disadvantages of an SAS?
  
• How do you set up an SAS?
  
• How much does it cost to set up an SAS?
  
• Transferring an SAS
  

What is an SAS?

The SAS is the most popular legal form in France: according to Insee, SAS accounted for 65% of new businesses established in 2022. Among its features are high operational flexibility and ease of creation, modification, and transfer. Its capital is divided into shares held by the partners of the company, so the partners are also shareholders.

There are two types of shares:

• Ordinary shares: These give shareholders the right to information, voting, dividends and company finances.
  
• Preference shares: These grant different voting or dividend rights.
  

What are the main features of an SAS?

Most business activities can be conducted within an SAS, with the exception of tobacco sales, insurance, savings and investment activities, and performing arts.

The French government stipulates that an SAS must have at least two partners, who can be either individuals or legal entities, and must appoint a president to manage the company. If formed with only one partner, the company adopts the legal structure known as a “société par actions simplifiée unipersonnelle,” or SASU. This is another popular legal form in France.

SAS partners are free to establish the company’s bylaws. These bylaws establish the company’s rules of governance, organisation, and operation – from a fiscal, social, and legal perspective.

Share capital

The capital of an SAS is freely determined by the partners. It may consist of money (cash contribution), property (contribution in kind), or a combination of the two. Half of any cash contribution must be deposited in the company’s bank account at the time of registration. The remaining half must be provided within five years.

Note that the appointment of a contribution auditor is mandatory if the value of the contribution in kind exceeds €30,000 and if its value constitutes more than half of the share capital. It’s also important to mention that partners’ liability is restricted to the extent of their contributions. Additionally, an SAS is not permitted to raise capital from the public or from a regulated market.

How does an SAS work?

The SAS is headed by a president. The powers of the president are defined by the partners when they draw up the statutes of the SAS. As the head of the company, the president has civil and criminal liability.

In order to streamline the management of the company and to assist with the president’s duties, the partners may appoint managing directors and various management bodies such as a steering committee, a supervisory committee, or a management committee.

Financially, if the SAS makes a profit, the partners (as shareholders) may decide to pay dividends. The SAS must have at least one bank account in its own name. It must file its annual accounts and inventory with the clerk of the commercial court.

What tax regime does an SAS fall under?

SAS are subject to corporate income tax (IS from the French, “impôt sur les sociétés”) by default, and can choose to pay income tax (IR, from the French “impôt sur le revenu”) if they meet the eligibility criteria.

President’s tax regime

The president is automatically subject to income tax (IR) in the salaries and wages category. As a statutory employee, the president is entitled to a 10% tax rebate on income, as well as social services such as health insurance, retirement, and family allowance.

Taxation of partners

Dividends received by partners are taxed at a flat rate of 30%, including 12.8% for income tax and 17.2% for social security contributions. Partners may also elect to be taxed at the income tax rate.

Businesses can optimise compliance with Stripe Tax, an automated function that speeds up tax calculation, collection, and reporting. Stripe Tax also generates detailed reports on transactions and income for the year.

What are the advantages of an SAS?

The SAS form offers several advantages, particularly in terms of operation:

• Ease of creation
  
• Considerable freedom for partners to determine how the company is governed
  
• Collective decision-making
  
• Partnership between the partners and the president
  
• Limited liability to the amount of contributions
  
• Choice of tax regimes
  
• Legal form recognised by banks, customers, and suppliers
  
• Easy transfer of shares and induction of new partners
  

What are the disadvantages of an SAS?

The SAS also has its drawbacks, such as:

• Drafting bylaws, also known as articles of association, can be complex (this is usually entrusted to a legal professional and could cost between €1,500 and €2,000).
  
• Social security contributions are high (you can read more about SAS social security contributions in the article from the French government).
  
• There is a ban on trading on the regulated market or being listed on the stock exchange.
  

Please see the section entitled “How much does it cost to set up an SAS?” to find out more about the costs associated with setting up an SAS.

How do you set up an SAS?

The creation of an SAS begins with the drafting of the articles of association, a document that defines the company’s operating procedures. This mandatory step is followed by the selection of the registered office, which is the official address of the SAS. Next, the SAS’s share capital must be deposited in the company’s business bank account.

Once the share capital has been deposited, it is mandatory to publish a notice of the creation of the SAS in a legal announcement journal (see the French government article for details on how to publish a legal announcement). The SAS cannot be registered without completing these formalities.

To register the SAS, you need to complete the online business creation form on the business formalities portal and attach the necessary supporting documents. Further information on registering an SAS can be found on the French government website.

How much does it cost to set up an SAS?

You should familiarise yourself with the costs involved in forming your SAS. For example, hiring a professional (such as a lawyer, notary, or accountant) to draft the articles of association can cost between €1,500 and €2,000. If you want to keep costs down, you can draft the bylaws yourself.

If you need to hire a contribution auditor to evaluate the contributions in kind, you can expect to pay between €500 and €3,000. Publishing the mandatory legal notices will cost between €193 and €226 in 2024.

The cost of registering your SAS depends on the nature of your business. For a commercial activity, you can expect to pay €37.45. However, registering a craft activity will cost an additional €15. You’ll also have to pay a fee of €21.41 to declare the beneficial owners of the company.

Finally, the cost of domiciling your SAS will vary depending on the location. If you establish the registered office at the home of the president, domiciliation will be free of charge. However, if your registered office is located in a business incubator, a domiciliation company, or in commercial premises, you risk paying higher fees.

Transferring an SAS

The company’s bylaws regulate the entry and departure of partners. In the event of a share transfer, a tax (registration levy) is imposed at a rate of 0.1% of the transfer price, which increases to 5% for transfers involving a company primarily holding real estate assets. The tax is paid by the purchaser and must be settled when the sale is declared to the corporate tax office (SIE, from the French “service des impôts des entreprises”).

Although not required by law, it is highly recommended that a share transfer deed be prepared. The declaration of transfer to the SIE must be registered within one month from the date of the transfer deed. If there is no transfer deed, the declaration must be filed no later than one month after the transfer date.