What is the difference between sarl and sas

However, at the time of the opening of a bank account in the name of the company, the bank will ask for KYC documents. The exercise of certain businesses is subject to administrative authorization or prior approval eg , chartered accountant, removal firm, goods traffic. The exercise of certain businesses is subject to administrative authorization or prior approval eg, chartered accountant, removal firm, goods traffic.

This website uses cookies to improve functionality and performance. If you continue browsing the site, you consent to the use of cookies on this website. See our cookie policy for details. It has a number of advantages due to its flexibility such as: The law does not impose a particular management structure for the SAS; the president is the only compulsory corporate body There is greater freedom for organizing the management and operating structures of an SAS and The SAS does not have access to the capital markets and its shares cannot be listed on a stock exchange.

Branch of a foreign company Under French law, an entity operating in France shall register with the French Registry of Commerce and Companies RCS only if it is conducting a "commercial activity".

The main difference between a French branch and a French subsidiary is that: A branch is a mere emanation of the parent company in France, with no legal existence or distinct assets or liabilities and A subsidiary is an independent entity with its own legal existence, bylaws and capital contributions.

As a consequence, the parent company: Has unlimited liability for any debts and liabilities incurred by the branch in France and Has limited liability for the debts and liabilities incurred by its subsidiary provided that the subsidiary is not incorporated under the form of a partnership, ie , SNC or civil company in case it becomes insolvent ie , limited to its initial capital contribution and the amount of any shareholder's loan which cannot be reimbursed within the context of a liquidation due to insufficiency of assets.

Last modified 10 Jun Generally no personal liability of the shareholders. Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends. The president is the only required corporate body by law who gets the broadest powers to act in the name and on behalf of the company and to represent the company towards third parties Shareholders typically purchase stock in the SAS, either common or preferred.

SAS does not have access to the capital markets and its shares cannot be listed on a stock exchange. Typical charter documents include bylaws and organizational shareholders' meeting resolutions.

Managing director s get s the broadest powers to act in the name and on behalf the company and to represent the company towards third parties. Shareholders typically purchase stock in the SARL, but only 1 class of stock is allowed.

Unlimited number of members allowed and at least 2. Generally no personal liability of the members. Shareholders typically purchase stock in the SA, either common or preferred. It is reminded that, pursuant to the provisions of Articles L. In the event the beneficial owner changes, a new declaration must be filed within 30 days of this change. For the beneficial owner to be disclosed, he or she must be an individual not a legal entity who: who owns, directly or indirectly more than 25 percent of the share capital, or who owns, directly or indirectly, more than 25 percent of the voting rights, or has a power of control over the management of the declaring entity or over the general meetings of its shareholders In the event it is not possible to determine the identity of the beneficial owner ie , at the level of the top company, no individual fulfills 1 of the above criteria , the legal representative s of the declaring entity will have to be declared as beneficial owner; in the event the legal representative of the declaring entity is a legal entity, it will be necessary to declare the identity of the individual acting as legal representative of this legal entity.

For the beneficial owner to be disclosed, he or she must be an individual not a legal entity who: who owns, directly or indirectly more than 25 percent of the share capital, or owns, directly or indirectly, more than 25 percent of the voting rights, or has a power of control over the management of the declaring entity or over the general meetings of its shareholders In the event it is not possible to determine the identity of the beneficial owner ie , at the level of the top company, no individual fulfills 1 of the above criteria , the legal representative s of the declaring entity will have to be declared as beneficial owner; in the event the legal representative of the declaring entity is a legal entity, it will be necessary to declare the identity of the individual acting as legal representative of this legal entity.

We can provide for the whereabouts of a domiciliation company we are used to work with, if necessary, and A copy of the beneficial owner declaration executed by the French representative of the French branch. Management structure SA can be incorporated in accordance with 2 different management structures: Either with a board of directors Conseil d'Administration or With an executive board Directoire and a supervisory board Conseil de Surveillance.

The SARL shall be managed by 1 or more individuals. Third parties may therefore learn, at any time, the identity and shareholdings of the shareholders of an SARL.

The shares of an SA are negotiable either by the execution of a stock transfer power if the shares are in nominative form or by simple transfer if the shares are in bearer form. The shares of an SARL are not negotiable and their transfer must be made by a written contract of sale, a copy of which must be served on the SARL by a process server; formal public disclosure of such transfer must also be made.

Furthermore, the shares of an SARL may normally not be transferred to third parties without the prior consent given by the affirmative vote of a numerical majority of the shareholders representing at least one-half of the capital of the SARL; absent contrary provision in the Articles, no similar restriction exists on the transfer of the shares of an SA.

The transfer of shares of an SA is always subject to a registration tax of 3 percent as limited by a 5, euros ceiling. The transfer of shares of an SARL is always subject to the same registration tax of 3 percent, but the amount on which the 3 percent registration tax is imposed is subject to a reduction abattement of 23, euros which is prorated in proportion to the percentage of shares transferred. Get started Now and set up your company in France.

Opening a business bank account for an SAS requires an initial share capital deposit of around 4, euros as there is no minimum required anymore.

An SA is normally used by businesses that want to go public on the stock exchange or have lots of shareholders as there is no maximum amount of shareholders with this type of business structure. An SA is designed to help fundraising by encouraging new investors to contribute to the share capital. So any businesses with strong potential for expansion, investment and profit are likely to go for this structure.

Related article: How does the payroll system work in France? But be warned, the PDG can be fired at any time by the board! An auditor called a commissaire aux comptes has to audit your accounts every year. And with regards to tax and social security, the senior management are considered as regular salaried employees of the company. Capital can be entered by way of cash or assets and for a small business there is no need for an independent valuation of assets entered as capital.

But however you choose to take a salary, social security contributions as a self-employed person will need to be met. Direct contact with specialised French business lawyers.

Expert legal advice in all areas of French business law. Free first advice. No hidden costs. Useful information. Incorporation of a French company and payment of share capital. Penalties for late payment. Miscellaneous provisions in a French law contract. Prior approval clause in a SAS. Corporate Income Tax in France. Company directors who are not French residents. How to incorporate a French company?

Shareholder loan. Franchise agreement French contract law. Exclusion of a shareholder SAS. Payment terms. Distribution agreements French contract law. Pre-emption right and scope of application. Documents required to incorporate a French company. Posting of workers - secondment of employees - to France. Agreement for provision of services French contract law.

Commercial agency agreement French contract law. Debt recovery French business law.