SAS or SARL: how to choose the right company form in France?

Two legal forms, two philosophies

The SARL (Société à Responsabilité Limitée, limited liability company) and the SAS (Société par Actions Simplifiée, simplified joint-stock company) are the two most common forms for setting up a company in France. Both offer liability limited to contributions, but they differ on many points.

Comparison on key criteria

Governance and flexibility

• SARL: operation framed by law. The manager (gérant) has defined powers. Major decisions are taken at the partners' meeting under statutory majority rules.
• SAS: wide freedom in the articles of association. The articles freely organise governance, management bodies and decision-making. It is the preferred form for start-ups and fundraising.

The manager's social security regime

• Majority manager of a SARL: self-employed regime (travailleur non salarié, TNS). Lower social contributions but less extensive cover.
• President of a SAS: regime treated as an employee (assimilé salarié). Higher contributions but better protection (pension, insurance).

Taxation

Both forms can opt for corporate tax (impôt sur les sociétés, IS) or personal income tax (impôt sur le revenu, IR, subject to conditions). The SAS offers more flexibility in structuring the manager's pay (salary, dividends).

Transfer of shares

• SARL: transfer of shares subject to approval by the partners and to registration duties of 3%
• SAS: more flexible transfer of shares, registration duties of 0.1%. A clear advantage when selling or bringing in investors.

Summary

Maître Durbec's advice

The right choice depends on your project, your personal situation and your growth prospects. Maître Durbec analyses your overall situation, recommends the most suitable structure and then drafts tailor-made articles of association.

For any question about choosing a legal form or setting up your company, the office is at your disposal.