The Absolute Rule: Every Shareholder Must Agree
A SAS can come into being through the transformation of an existing company — but Article L. 227-3 of the Commercial Code makes one requirement absolute: the decision must be taken unanimously by the shareholders. Unanimity means every shareholder, not just those who attend or are represented at the general meeting. A shareholder who does not attend, sends no proxy, and does not vote has not consented. The Cour de cassation confirmed that unanimity necessarily means the totality of shareholders, not merely those present or represented (Cass. civ. 3e ch., 5 January 2022, n° 20-17428). A shareholder deprived of voting rights — for example through preference shares without voting rights — must still give their individual agreement. The unanimity requirement is attached to the quality of being a shareholder, not to the exercise of voting rights in an assembly.
A transformation not taken unanimously is irregular. Before 1 October 2025, this did not automatically void the transformation — nullity could only arise from an express provision of the Commercial Code or from contract nullity rules (Art. L. 235-1). From 1 October 2025, ordonnance 2025-229 of 12 March 2025 reformed the nullity regime: nullity of corporate decisions can only result from violation of a mandatory provision of company law (Art. 1844-10 C. civ.). In all cases, a dissenting shareholder can challenge the transformation on grounds of fraud or abuse of majority. The unanimity rule also extends to mergers producing a SAS: shareholders of the absorbed company must unanimously agree (Cass. com., 19 December 2006, n° 05-17802).
What Transformation Does — and Does Not — Change
No New Legal Entity
Transformation does not create a new company. The transformed SAS is legally the same entity — it keeps its RCS registration number, original incorporation date, and contractual history. All ongoing contracts continue without novation. Commercial leases are unaffected: the SAS takes over the lease with all its rights and obligations, and simply notifies the landlord. Employment contracts continue on existing terms with full accrued seniority under Article L. 1224-1 of the Labour Code.
Capital, Tax Cost, and Directors
Because the SAS has no minimum share capital, the transformed company can reduce its capital to any level. A transformation that does not change the tax regime attracts only a fixed €125 registration duty (Art. 680 CGI). Where the transformation triggers a shift from income tax (IR) to corporate tax (IS) — for example a SARL de famille transforming into a SAS — transfer duties become payable on real property, business funds, client bases, and commercial lease rights. These duties can be avoided if shareholders commit to holding their shares for at least three years, with the commitment taken in the transformation document itself.
The transformation ends the powers of all existing governance organs. The board of directors, PDG, directoire, and conseil de surveillance of a SA all lose their functions at the moment of transformation. This is not a dismissal — the transformation is the event that ends the mandate. Former directors can be appointed president or governance members in the new SAS. Personal cautions given by former directors survive the transformation: a transformation creates no new entity and therefore discharges no existing personal obligation (Cass. com., 3 January 1995, n° 93-19713).
Transforming a SA Into a SAS: Two Additional Conditions
The Two-Year Existence Condition (Art. L. 225-243)
A SA can only transform into a SAS if it has been in existence for at least two years and has had the accounts of its first two financial years approved by the shareholders. These are two distinct cumulative requirements. The two-year period runs from the RCS registration date of the SA itself. Where the company previously operated as a SARL before converting to SA, the periods under both forms can be counted together provided the total exceeds two years.
The Statutory Auditor's Report on Net Assets (Art. L. 225-244)
Where the SA has a statutory auditor (commissaire aux comptes), that auditor must produce a report before the transformation, confirming that the company's net assets are at least equal to its share capital. The Cour de cassation confirmed the auditor does not also need to deliver the full asset valuation required by Art. L. 224-3 in this context (Cass. com., 8 April 2008, n° 06-15193). Where the SA does not have a statutory auditor, the shareholders must instead appoint a commissaire à la transformation to assess the value of assets and any special advantages.
If the SA's net assets have been eroded below the share capital by accumulated losses, a capital reduction equal to those losses must precede the transformation. Where net assets are negative, a full coup d'accordéon (reduce to zero, simultaneously increase to at least €37,000) is required before the transformation can proceed.
A SA that has issued bonds must submit the transformation project to the general assembly of bondholders. If they refuse, the board can override by offering to redeem bonds on request. Holders of securities giving access to capital must be consulted through a special assembly. From 1 October 2025, ordonnance 2025-229 changes the nullity regime for corporate decisions: nullity of a transformation for absence of required reports is no longer automatic but becomes discretionary for the court, and the prescription period is reduced to two years.
Transforming a SARL Into a SAS: A Different Set of Rules
The SARL route requires neither two years of existence nor approval of two sets of accounts. Because a SAS has no minimum capital, a SARL can retain whatever capital it has. A SARL transforming to a SAS that remains subject to corporate tax (IS) in both forms carries no fiscal consequence beyond the €125 fixed duty. Only a SARL de famille or other SARL benefiting from a special tax regime triggers a change in tax treatment.
The Commissaire à la Transformation: When Required
A SARL without a statutory auditor must appoint a commissaire à la transformation before the transformation proceeds. The commissaire is appointed unanimously by the shareholders, or by court order on the application of any manager if they cannot agree. The commissaire's mission: assess the value of assets comprising the company's estate; identify any special advantages to be granted; and confirm that net assets are at least equal to the stated share capital (assessed at the date of the last approved accounts or an interim balance sheet if the transformation takes place in the second half of the financial year). The commissaire's report must be made available at the registered office at least eight days before the meeting, or sent to each shareholder with the draft resolutions if using written consultation.
If the SARL already has a statutory auditor, no commissaire à la transformation is required — the 2016 reform settled this definitively. A separate question remains unresolved: whether the statutory auditor must also produce a report on the company's financial position under Article L. 223-43. There is a genuine divergence between the RCS coordination committee (not necessary) and the CNCC's legal studies commission (necessary). The cautious approach has been to produce it regardless — the 2025 nullity reform may affect how this question develops.
| Condition | SA → SAS | SARL → SAS |
|---|---|---|
| Unanimity of all shareholders | Required — no exception | Required — no exception |
| Minimum existence period | 2 years from RCS registration + 2 approved sets of accounts | None required |
| Net assets ≥ share capital | Confirmed by statutory auditor's report (if CAC exists); by commissaire à la transformation (if no CAC) | Confirmed by commissaire à la transformation (if no CAC); not required if CAC already in place |
| Asset valuation report | Required from commissaire à la transformation (if no CAC); not required from CAC for the SA route | Required from commissaire à la transformation (if no CAC) |
| Bondholders' assembly | Required if bonds in issue | N/A |
| CSE consultation | Required if ≥ 50 employees | Required if ≥ 50 employees |
| Tax cost (neutral regime) | €125 fixed duty (Art. 680 CGI) | €125 fixed duty (Art. 680 CGI) |
| Tax cost (IR → IS shift) | Transfer duties on real property, business funds, etc. — unless 3-year retention commitment given in transformation document | Same — applies where SARL de famille or other IR-regime SARL transforms |
| Capital post-transformation | Can reduce below €37,000 — SAS has no minimum | Can retain any level |
| Existing directors' mandates | End at transformation — new appointments in SAS articles required | End at transformation — former gérant can be appointed SAS president |
| Personal cautions by directors | Survive transformation — not discharged by change of form | Survive transformation — former gérant must review all personal guarantees |
| Employment contracts | Continue on existing terms — Art. L. 1224-1 C. trav. | Continue on existing terms — Art. L. 1224-1 C. trav. |
- Unanimity: confirm every single shareholder — including those without voting rights and those who will not attend the assembly — will give their individual agreement. One dissenter blocks the transformation (Art. L. 227-3; Cass. civ. 3e, 5 Jan. 2022).
- SA only — 2-year condition (Art. L. 225-243): verify the two-year existence condition and that two sets of accounts have been approved — both conditions must be satisfied simultaneously. Prior operating periods under another form (SARL → SA) can be cumulated if total exceeds two years.
- SA with CAC — net assets report (Art. L. 225-244): obtain the auditor's report confirming net assets ≥ share capital before the assembly. If net assets are below capital, a capital reduction (or coup d'accordéon) must precede the transformation.
- No CAC (SA or SARL) — commissaire à la transformation: appoint by unanimous shareholder agreement or court order; make the report available at the registered office at least 8 days before the meeting (or include with draft resolutions for written consultation).
- Tax regime check: if the transformation shifts the company from IR to IS, assess whether the three-year retention commitment on relevant assets (real property, business funds, commercial lease rights) should be given in the transformation document to avoid transfer duties (Art. 809, II and Art. 810, III CGI).
- Personal cautions and employee obligations: identify all personal cautions given by existing directors — these survive the transformation and must be managed separately with each creditor. Consult the CSE if headcount reaches 50+. Publish the transformation notice in a legal announcement medium to make it enforceable against creditors (Art. L. 210-6).
The transformation procedure is procedurally precise, carries audit requirements that differ depending on your starting form, and has tax consequences that must be assessed before — not after — the decision is taken. We advise SARL and SA shareholders, boards, and management teams on transformation procedures, new SAS governance design, and personal guarantee management through the transition.
Get Legal AdviceThis article is for general information only. It does not constitute legal advice. Transformation procedures involve multiple conditions that depend on the specific facts of each company. Always seek qualified legal advice before initiating a transformation.
