Legal forms of a company
Establishing a business in France through a company requires choosing a structure suited to your strategy, governance and development objectives. French law gives you the freedom to choose the one that best meets your needs
In a nutshell
- The SAS is the most flexible form, particularly suited to foreign investors, fundraising and evolving projects.
- The SARL offers a more legally regulated framework, which can be reassuring for stable entrepreneurial projects with few partners.
- The SA is suitable for large-scale projects, particularly when access to financial markets or structured governance is envisaged.
- In all cases, the liability of the partners is limited to their contributions, which secures the investment.
- The choice depends primarily on the number of partners, the desired level of flexibility and the growth strategy.
What are the main forms of commercial companies?
In France, several structures adapted to foreign investors exist. Three forms are mainly used for commercial, industrial or technological establishment: the SAS, the SARL and the SA.
This structure is very flexible in its organization and the company articles freely determine the governance (President, Executive management, Committees). This form is particularly well-suited to fundraising and bringing in investors.
It offers:
- A great deal of freedom and flexibility in the organization of governance.
- Tailor-made statutory drafting.
- A natural compatibility with shareholder agreements and private equity transactions.
- Great flexibility in terms of investor entry and exit.
It can also be in the form of a single-member simplified limited company, then called a SASU.
This structure is regulated by law, with a more standardized operation, often chosen for stable or family projects.
It is often chosen for:
- Projects with a limited number of partners.
- Entrepreneurial or family structures.
- Organizations seeking standardized governance.
It can be formed by a single partner, in which case it is called a single-member limited liability company (Entreprise unipersonnelle à responsabilité limitée – EURL).
This structure is more complex in terms of governance and regulatory requirements, but is better suited to industrial projects or large businesses. It is the only form that allows admission to trading on a regulated market, subject to certain conditions.
It is characterized by:
- A structured governance (board of directors or executive board and supervisory board).
- More stringent regulatory requirements.A capacity to accommodate institutional investors.
Help in choosing a legal status
An official comparison tool is available to help you determine the most suitable legal structure for your project. The “Legal Status Choice Guide” offered by Mon-entreprise.fr allows you to compare the main legal statuses (SA, SAS, SARL, etc.) according to various criteria, such as the number of shareholders, the social security status of the company director, taxation, level of liability and social protection.
What are the characteristics of the forms of company?
| Criteria | SARL / EURL | SAS / SASU | SA |
|---|---|---|---|
| Organisation | Regulated structure | More flexible structure | Highly regulated structure |
| Partners or shareholders | Natural or legal person. One partner: EURL. Two or more partners: SARL. Maximum of 100 partners. | Natural or legal person. One partner: SASU. Two or more partners: SAS. | Natural or legal person. Unlisted company: minimum of two shareholders. Listed company: minimum of seven shareholders. |
| Partner or shareholder liability | Limited to contributions | Limited to contributions | Limited to contributions |
| Minimum share capital | €1 | €1 | €37,000 |
| Permitted contributions | Cash contributions, contributions in kind and sweat equity | Cash contributions, contributions in kind and sweat equity | Cash contributions and contributions in kind only |
| Governance | One or more company directors. General meeting of partners. | President. One or more Chief Executive Officers and Deputy Chief Executive Officers may also be appointed. Governance arrangements are freely determined. General meeting of shareholders. | Chair and Chief Executive Officer. Board of Directors or Executive Board. Supervisory Board. General meeting of shareholders. |
| Taxation of profits | Corporate income tax. An option for personal income tax may be available, subject to certain conditions. | ||
| Company director’s corporate and social security status | Company director who is a natural person, whether a partner or not: – Majority partner: affiliated to the self-employed workers’ scheme. – Equal or minority partner: treated as an employee and affiliated to the general social security scheme. Non-partner company director: | President, whether a natural or legal person, shareholder or not. Treated as an employee. | Chair and Chief Executive Officer. Treated as an employee. |
| Registration duties on transfers of securities Excluding mainly real-estate companies: 5% | 3% of the sale price, after a deduction of €23,000 | 0.1% of the sale price | 0.1% of the sale price |
| Transfer of securities | Mandatory approval by the partners | Free transfer, although an approval clause may be included and is recommended | Free transfer, although an approval clause may be included and is recommended |
| Unemployment insurance for company directors | In principle, no entitlement, except where the corporate office is combined with an employment contract under certain conditions. | ||
| Combining a corporate office with an employment contract | Possible if there is genuine employment, distinct technical duties, separate remuneration and a relationship of subordination. | ||
| Access to financial markets | No | No | Yes, subject to certain conditions |
| Auditor | Mandatory if two of the following three thresholds are exceeded: – €5 million in total assets – €10 million in revenue, excluding VAT – 50 employees | ||
For further information, please visit the dedicated page.
Cost of starting a business
Estimate the cost of starting your business based on your project with the “Business Creation Cost” comparison tool offered by Mon-entreprise.fr. It assesses the main expenses to expect depending on the legal structure chosen and your situation: registration formalities, publication of legal notices, capital deposit, administrative fees and potential support services.