Societe par Actions Simplifiee (SAS) - Simplified Stock Company Registration in France

What is SAS in France?

The full form of SAS is Societe Par Actions Simplifiee which is a Simplified Stock Company that is comparatively a new type of entity in France. The SAS in France allows entrepreneurs to be free from the constraints that are linked to the strict provisions of public limited companies.

The legal status offers the partners the possibility of freely setting the rules for operating the company. Also, the partner's liability is limited to the amount of participation in the Capital.

Characteristics of the SAS in France

The SAS in France is a commercial company that can take out any type of activity there will be some exceptions with regulated sectors such as insurance tobacco sales etc.

There are a minimum of two partners needed also there is no maximum limit on the partners they can be natural persons or legal entities. In the case of SASU, the structure can include a single partner.

The SAS in France is categorized by its great flexibility to the extent that the statute's partners are free to determine the terms of its operation, which are decision-making, management bodies, etc, and also to regulate the transmission of its securities that are approved clause, inalienability clause, etc.

The partners of SAS in France set the amount of share capital which can be a minimum and the governance rules for the transmission of the shares.

How does SAS in France work?

The operating rules of the Societe par Actions Simplifiee in the statutes are set by the partners. The concerns in the certain composition and operating methods of the management body:

1. Manager's appointment
2. Mandate’s duration
3. Power
4. Remuneration
5. Revocation process, etc.

It is mandatory that you appoint a president who will become the legal representative of the Societe par Actions Simplifiee. The president will be vested with powers that enable him to act in all situations on behalf of the company. His actions should nonetheless be limited to the corporate purpose of the company.

SAS in France can be managed by natural persons or legal entities that should be registered in the trade and companies register.

The executives can or cannot receive the compensation. If they are paid, then they are associated with the general social security system.

If there are large Societe par Actions Simplifiee then an auditor should be appointed for the verification of the company’s accounts.

Also, partners who have at least 5% of the capital should have the right to request the appoint an expert. Then this will be responsible for the report writing on particular management operations. If required it is also possible for the set up of a body which will be responsible for managers monitoring.

For adopting a decision, the conditions within the Societe par Actions Simplifiee are defined in the statutes. In principle, the decisions that concern changes to the structure of the company and the accounts need the agreed agreement of the partners, which are:

1. Change of Legal form
2. Modification of share capital
3. Merger
4. Division of the company
5. Appointment of an auditor
6. Approval of accounts
7. Allocation of result

Rights of the Shareholders

The shareholders of the SAS in France have various rights, which are as follows:

Financial rights: Every shareholder has the right to get the company’s profit part in the form of dividends

Political rights: The partners will profit from voting rights which are proportional to shares in the company. They will have the right to participate in shareholder meetings and consultations organized by the company.

Also, within the framework of the SAS in France, you have the option of drawing up a shareholder's agreement. It is the contract that concludes between one or more partners for the organization of relations that they will maintain with each other. It will be drafted freely and the clauses can vary depending on the shareholder's situation.

The registration formalities of creating a SAS in France

For the formation of SAS in France, it is important to complete some of the formalities that will result in the registration, which are:

1. You have to draft the statutes of SAS in France
2. The cash contributions have to be deposited into the blocked account, which has been opened in the name of the company that has been formed.
3. Assess the contributions in kind and include the contributions commissioner.
4. The statutes of the Societe Par Actions Simplifiee should be signed and finalized.
5. The social directors have to be appointed unless it has been done directly in the statutes.
6. You have to publish the notice of incorporation in the legal notice newspaper.
7. Then, finish the declaration of incorporation of the SAS in France
8. The registration application has to be submitted to the registry

Steps for Simplified Stock Company Registration in France

The Societe par Actions Simplifiee is a very popular choice for businesses in France because of its flexibility and ease of management. This legal structure especially attracts foreign investors and entrepreneurs who are looking to form a presence in France. The process for Simplified Stock Company Registration in France is mentioned as follows:

Step 1- Pick a Company Name

For Simplified Stock Company Registration in France, you have to establish an SAS in France that is unique and not in use already by any other business. Through the French National Institute of Industrial Property (INPI) database, you can also search the availability of the names. It is very important to check that the name does not invade any existing trademarks or intellectual property rights.

Step 2- Draft the statutes

For the Simplified Stock Company Registration in France, the statutes or the Articles of Association are the legal documents that outline the Rules, the company’s purpose, and structure. They should be drafted in French and have the information as follows:

1. Company Name and address registered
2. Business Purpose
3. Share capital
4. Share structure
5. Identification of shareholders and their particular contributions
6. Structure of Governance and Management
7. Rules of Shareholder Meeting
8. Decision-making processes
9. Provision for transfer of shares
10. Company dissolution provisions

Step 3- Constitute contribution

The shareholders of SAS in France can make some type of contribution. They can have a contribution in Kind which includes the movable property, merchandise, patent, etc and to make them valid a professional who is outside your company known as a contribution commissioner should establish the monetary value.

The shareholder can also make a cash contribution, which is contributing money to the share capital. The funds should be deposited in the bank within eight days of receipt. They will then be released upon presentation of the Kbis extract from the Societe par Actions Simplifiee.

Step 4- Advertisement and registration formalities

For the process of Simplified Stock Company Registration in France, you should publish the notice of incorporation of your Societe par Actions Simplifiee in the Journal d’Annonces Legales (JAL) in the head office department. The announcement will allow you to inform third parties about the creation of your SAS in France with various characteristics.

After that, you should submit the SAS creation file to the Single window to get the Simplified Stock Company Registration in France.

Also, complete the Register of Beneficial Owners (RBE). This register has been compulsory since June 2017, which will make it possible to identify the natural persons who have exercised effective control in the company.

Step 5- Appointment of an Auditor

When the Simplified Stock Company Registration in France is done, then the auditor should be appointed to guarantee the accounting and financial transparency of the joint stock company where two of three conditions will be met:

1. The turnover surpasses to €2,000,000
2. The total balance sheet should surpass €1,000,000
3. The employees’ number should be greater than 20

What are the post-registration requirements?  

After the Simplified Stock Company Registration in France, you will have to meet several ongoing legal requirements, which are mentioned as follows:

1. The Annual financial statements and audit, if applicable
2. Maintaining meetings and regular shareholder meetings
3. Complying with the French labour and tax laws
4. You have to update the company information with the Commercial Court as required
5. The tax regime of SAS in France
6. The SAS in France will be subjected to the IS at a fixed rate of 33.33% in certain circumstances. The rate will be lowered to 15%

By common decision of the Shareholders, the company will choose the IR regime for five financial years. Also, this will only be possible for the agricultural, commercial, and artisanal businesses and for those who will carry out the liberal activity.

Some other requirements are:

1. The workforce should be lower than 50 employees
2. The annual turnover should not exceed 10 million euros
3. The company should have been in existence for at least 5 years
4. 50% of the share capital should be held by the natural persons
5. The shares of the Manager and the tax household will represent at least 34% of the capital

Operation of the SAS in France

The operations that are needed to manage the Societe par Actions Simplifiee are mentioned as follows;

The Management Bodies

The SAS in France should have a president who will represent the company. He will be held liable civilly which is particularly in the event of a management error and criminally. The president's powers will be determined by the partners in the statutes. Therefore, he will be able to combine the power to control and manage the company.

The partners will be free to set up the other management bodies:

Director General

There can be the appointment of one or more director generals. It is possible to grant full management power to the general manager and let the president represent the company. 

Management and Control committees

The supervisory committee will be held responsible for controlling the management of the president or the management committee that has the power for the management of the company internally.

Decision

The law will set the minimum legal framework for decision-making within the SAS. It will be the partner who will determine while drafting the statutes, how the decisions are taken in the company whether the method of a decision like the written consultation, meeting act, the quorum rules, majority rules, etc.

The manager can also make some decisions alone while others should be taken collectively by the partners like the capital increase, modification of the corporate purpose, etc.

Transmission of the SAS in France

In the statutes, the founding partners will determine the method of the transmission of the shares of the Societe par Actions Simplifiee as follows:   

Transfer of shares is Free

SAS in France has the free transfer of shares as the law doesn’t provide for any approval process. Although the statute of the company can include particular clauses for the restriction of the possibilities of transfers:

Approval Clause

It allows you to do the transfer of shares to be subjected to the agreement of partners, unanimously or by the majority of them. The approval clause will cover any type of share transfer, whether to the spouse, to a descendant, to a partner, or a third party.

Pre-emption clause

In this, the partner concerned gets the offer of a priority right of repurchasing the shares which another partner has plans of selling. Therefore, the partner who is transferring should offer his part of the shares to the beneficiary partner before doing any transfer.

Inalienability Clause

In this, there is prevention to transfer the shares for a maximum 10 years of period. After the period will be expired, the shares will no longer be immobilized and will be freely transferred.

Recording Rights

The rise in registration fees is due when there is a transfer of shares. The cost of the tax will amount to 0.1% of the transfer price.

For the predominantly real estate companies, the rate increased to 5% that is to say companies have more than half of the assets which will be made up of the buildings that won’t be assigned to the professional operation.

Social Regime of the Director for SAS in France

The president of the SAS in France is considered an employee and gets benefits from social protection which is given by the general Social Security system.

 The contribution of social security is linked to the manager and will be paid by the company which are same as of the managerial employee with one exception which is unemployment insurance. Also, if they wish they can take out the additional unemployment insurance.

He gets benefits from maternity and health insurance, family allowances, basic retirement insurance, insurance against work accidents, supplementary retirement insurance, and welfare insurance.

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