The SAS and SARL are both popular legal entities in France, but what are their differences? What do they have in common? What are the advantages of the SAS over the SARL and vice versa? This article compares the main features of the SAS and the SARL to help you choose the one that’s best for you, with a comparison table provided at the end.
What’s in this article?
- What is an SAS?
- What is a SARL?
- What do the SAS and the SARL have in common?
- What are the key differences between the SAS and the SARL?
- SAS vs. SARL: A comparative table
- SAS or SARL: Which should you choose?
What is an SAS?
The simplified joint-stock company (SAS, or “société par actions simplifiée”) is a legal entity known for its high degree of operational, developmental, and structural flexibility. It’s suitable for most commercial, craft, liberal, and industrial activities, except for regulated professions. According to the National Institute of Statistics and Economic Studies (Insee), it was the most commonly used legal form in France in 2022.
The partners of an SAS are free to establish the bylaws that govern the management and organization of the company. Learn more about the SAS in our article on the topic and explore other popular legal forms in France, such as the public limited company (SA, or “société anonyme”), the single-shareholder simplified joint-stock company (SASU, or “société par actions simplifiée unipersonnelle”), and the single-shareholder limited liability company (EURL, or “entreprise unipersonnelle à responsabilité limitée”), by following these links.
What is a SARL?
The limited liability company (SARL, or “société à responsabilité limitée”) is another legal form widely used in France. It’s suitable for most commercial, craft, and industrial activities, as well as unregulated professions and family businesses. Unlike the SAS, its operation is governed by law (Article L223-3 of the Commercial Code), providing associates with certain guarantees but offering less flexibility in management.
What do the SAS and the SARL have in common?
The SAS and the SARL are both multi-person limited liability companies, i.e., the partners are only liable for the amount of their contributions. They are similar in terms of taxation and accounting: both are subject to the standard corporate tax regime and are required to keep full accounts. Neither can be listed on the regulated market.
Both the SAS and the SARL are suitable for most businesses. In addition, the procedure for setting up both types of companies is the same.
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What are the key differences between the SAS and the SARL?
The two differ in several respects, including the number of partners, the way they operate, and the role of the manager.
Number of partners
The SAS requires a minimum of two partners, with no upper limit. They can be either individuals or legal entities.
SARLs, however, are limited to a maximum of 100 partners as specified by Article L223-3 of the Commercial Code. They must have a minimum of two partners (individuals or legal entities).
Drafting the articles of association
In an SAS, partners are free to establish the company’s bylaws, outlining its governance, organization, and operation rules from fiscal, social, and legal perspectives.
SARL partners, on the other hand, do not have the same level of flexibility in managing the company. The articles of association must be drafted more rigorously, following Articles 1 to 43 of the Commercial Code.
Share capital
In both types of companies, partners freely determine the share capital, which can be in cash or in kind.
Having said that, the share capital required for registration differs depending on the type of company. For an SAS, 50% of the cash contribution must be deposited in the company’s bank account at the time of incorporation. For a SARL, at least 20% of the cash contribution must be paid at the time of registration. The balance must be paid within five years of registration for both.
Note that appointing a contributions auditor is mandatory for all SAS and SARL companies if an in-kind contribution exceeds €30,000 and makes up more than half of the share capital.
Operations
The partners decide the operations of an SAS when they draw up the articles of association. It is managed by a president, who could be a natural person or a legal entity, and who, as a director, is subject to both civil and criminal liability. Partners could appoint managing directors and other management bodies to assist in running the company.
In contrast, the operation of a SARL is strictly regulated by Articles 1 to 43 of the Commercial Code. The SARL manager must be an individual who represents the company in interactions with third parties. They are responsible for tasks such as signing contracts, hiring employees, and handling legal formalities. A general meeting of shareholders assists the manager in their responsibilities.
Taxation
Both SASs and SARLs are automatically subject to corporate income tax (IS, or “impôt sur les sociétés”). But family SARLs, SARLs established less than five years ago, and eligible SASs can choose income tax (IR, or “impôt sur le revenu”) if they meet specific criteria.
Dividends received by SAS and SARL shareholders are subject to a single flat-rate withholding tax (PFU, or “prélèvement forfaitaire unique”) under the corporate income tax system. If they prefer, they can choose to be taxed according to the progressive income tax scale.
Social security status
The general social security system covers the chairman of an SAS. As an employee, they receive benefits such as health insurance, retirement, and family allowances.
That said, the social security system for SARL managers depends on the number of shares they own. If they hold more than half, they are considered majority shareholders and are covered by the social security system for self-employed workers. If they hold exactly half of the shares (as an equal manager) or less than half (as a minority manager), they are covered by the general social security system as soon as they receive remuneration.
Setup stages and associated costs
Both companies are formed in five important steps:
- Drafting the articles of association and choosing the company name
- Domiciling or choosing a registered office
- Depositing the share capital in the company’s bank account
- Publishing a notice of incorporation in a legal gazette
- Registering online via the business formalities portal
The costs involved include:
- Drafting the articles of association: between €1,500 and €2,000 to appoint an attorney, or €200 if using a legal platform
- Hiring a contributions auditor (if necessary): between €500 and €3,000
- Publishing the legal announcement: €193 for an SAS and €144 for a SARL
- Registering the business: €37.45 for a commercial activity and a further €15 more for a craft activity
- Declaring the beneficial owners: €21.41
- Domiciling the company: cost varies according to location
You can find out more about registration formalities in the French government’s article.
Transfer of shares
The articles of association of an SAS regulate how partners join and leave the company. Registration duty is set at 0.1% of the transfer price for share transfers. The purchaser pays the tax, which must be settled when the sale is declared to the corporate tax office (SIE, or “service des impôts des entreprises”).
In SARLs, shares can be transferred freely to a family member or partner. However, transferring shares to a third party needs approval from the majority of partners and involves specific formalities:
- Signing the transfer deed
- Registering the deed with the tax authorities
- Amending the articles of association to be filed with the business formalities portal
SARL registration fees are 3% of the sale price after a €23,000 allowance.
SAS vs. SARL: A comparative table
SAS or SARL? As you can see, there are several key differences between these two legal forms. The table below outlines the main distinctions:
ฟีเจอร์
|
SAS
|
SARL
|
---|---|---|
จำนวนหุ้นส่วน
|
ตั้งแต่ 2 คนขึ้นไป | ระหว่าง 2 ถึง 100 คน |
ความรับผิดด้านการเงินของหุ้นส่วน
|
จำกัดจำนวนการจัดสรรหุ้น | จำกัดจำนวนการจัดสรรหุ้น |
ทุนเรือนหุ้น
|
หุ้นส่วนสามารถกำหนดได้เอง โดยต้องมีการโอนหุ้นจำนวนอย่างน้อย 50% เมื่อก่อตั้งธุรกิจ | หุ้นส่วนสามารถกำหนดได้เอง โดยต้องมีการโอนหุ้นจำนวนอย่างน้อย 20% เมื่อก่อตั้งธุรกิจ |
การเข้าสู่ตลาด
|
ไม่อนุญาต | ไม่อนุญาต |
กรรมการบริษัท
|
ประธานบริษัท | กรรมการฝ่ายบริหารตั้งแต่ 1 คนขึ้นไป |
การเก็บภาษีผลกำไร
|
ภาษีเงินได้นิติบุคคลที่มีตัวเลือกภาษีเงินได้บุคคล | ภาษีเงินได้นิติบุคคลที่มีตัวเลือกภาษีเงินได้บุคคล โดยบริษัทจำกัด (SARL) ที่มีเจ้าของเป็นครอบครัวและที่ก่อตั้งขึ้นไม่เกิน 5 ปีสามารถเลือกได้ |
สถานะประกันสังคมของผู้จัดการ
|
พนักงานที่อยู่ในระบบเงินเดือนและประกันสังคม | พนักงานที่ไม่ได้รับเงินเดือน (TNS หรือ “travailleur non salarié”) หากเป็นผู้จัดการที่ถือหุ้นรายใหญ่ หรือพนักงานที่อยู่ในระบบเงินเดือนและประกันสังคม หากถือหุ้นส่วนน้อยหรือเท่ากัน |
การโอนหุ้น
|
ไม่จำกัด | ไม่จำกัดจำนวนสมาชิกครอบครัว ขึ้นอยู่กับการอนุมัติของผู้ถือหุ้นเมื่อโอนหุ้นให้แก่บุคคลที่สาม |
ค่าธรรมเนียมการจดทะเบียน
|
0.1% ของราคาขาย | 3% ของราคาขาย หลังจากหักเงินช่วยเหลือ 23,000 ยูโร |
SAS or SARL: Which should you choose?
Deciding on your company’s legal structure is a significant choice. It helps to consider the following:
- Maximum number of partners
- Amount of share capital required on registration
- Operating method
- Manager’s social security status
- Share transfers
The SAS offers greater operational advantages and flexibility than the SARL. Transferring shares to another person and adding new partners is a straightforward process. Furthermore, the manager enjoys a favorable social status similar to an employee’s.
At the same time, the SARL, provides partners a reliable legal structure governed by the Commercial Code, making it well-suited for family businesses. Additionally, the share capital required for registration is lower than that of an SAS.
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