How to Set Up a SAS in France: The Complete Legal Checklist

Why the SAS Dominates French Company Formation

The SAS was created in January 1994 as a flexible alternative to the highly prescribed SA structure. In a SARL, statutory rules govern most of what matters: how managers are appointed, what decisions shareholders must take, how shares transfer. In a SAS, the articles of association govern almost everything. With very limited exceptions imposed by mandatory law, the way the SAS is run — who takes decisions, how they are taken, what thresholds apply, what rights different shareholders hold — is a matter of contractual drafting between the founders.

Step 1 — Identify and Qualify Your Shareholders

French law imposes no restriction on the type of person who can hold shares in a SAS: individuals, companies of any legal form, associations, investment funds, and entities without full legal personality can in principle become shareholders. A SAS can be formed by a single person — in which case it takes the SASU form — or by an unlimited number of shareholders, subject only to any restriction the articles themselves impose.

Capacity Rules for Individual Shareholders

All shareholders must have the legal capacity to enter into binding obligations. A formally emancipated minor (possible from age sixteen) has full civil capacity. A non-emancipated minor can become a shareholder but must act through a legal representative; contributions of immovable property, business assets, or listed securities require prior authorisation from the guardianship judge. Adults under legal protection face varying constraints depending on the regime (judicial supervision, curatorship, full guardianship). Spouses married under a community of property regime can each hold shares freely — there is no mechanism by which the other spouse can claim shareholder status on shares subscribed with community funds. For PACS partners (post-January 2007), shares acquired during the partnership are each partner's individual property unless the pact expressly provides for an indivision regime.

Step 2 — Set the Share Capital

The SAS has no statutory minimum share capital. The capital must be stated in the articles, fully subscribed at formation, and divided into shares. Shares can be issued with or without a stated nominal value. A SAS under-capitalised relative to its activities carries real risks: banks will be reluctant to lend; creditors may use undercapitalisation as evidence of mismanagement; and with a capital of €1, any trading loss triggers the mandatory shareholders' consultation on continuation. Set capital at a level that genuinely reflects the company's initial financial needs.

Paying Up Cash Shares: The Mandatory Sequence (Art. L. 225-3/L. 225-12)

Shares subscribed in cash must be paid up to at least 50% of nominal value at subscription. The balance can be called up within five years of registration. The sequence is mandatory: cash deposited with an authorised depositary (bank, notary, or authorised investment firm) within 8 days of receipt → depositary certificate obtained → articles signed. Signing before the deposit is a legal irregularity. Funds remain frozen until registration; the president presents the Kbis to the depositary to release them. If the company fails to register within six months of the first deposit, any subscriber can demand return of their contribution.

Criminal sanctions apply for issuing shares before the minimum is paid: founders or directors face a fine of €150,000. A shareholder who fails to pay a call within thirty days loses voting and dividend rights until they settle, and the company can force-sell the shares after one month of default notice.

Variable Capital Option and Industry Contributions

The SAS can adopt a variable capital structure — forbidden in the SA but available to the SAS. Under a variable capital clause, capital can increase or decrease without the full formal procedure, provided changes remain within the maximum and minimum thresholds fixed in the articles (minimum floor: one-tenth of stated capital). The SAS uniquely also accepts contributions of industry (Art. L. 227-1 al. 4) — a shareholder's commitment to provide ongoing services, expertise, or know-how. Industry shares are inalienable, do not contribute to share capital, and disappear with the person — but carry full economic rights and voting rights. The articles must define the nature, scope, duration, and any exclusivity of the promised contribution, and the consequences of cessation.

Step 3 — Evaluate Contributions in Kind

Where any shareholder contributes assets other than cash — real estate, equipment, intellectual property, a business, a lease, a claim, securities — a valuation question arises. Overvalued contributions harm other shareholders and creditors. The law addresses this through the commissaire aux apports (Art. L. 225-8; Art. L. 227-1 al. 5).

The commissaire aux apports is appointed unanimously by the founders or by the president of the commercial court on request. Their report must describe each contribution, explain the valuation method, and confirm the value equals at least the nominal value of shares issued plus any premium. The report must be available to founders at least 3 days before the articles are signed, then annexed to the articles and deposited on registration. Special rules apply by asset type: a business fund (fonds de commerce) requires legal notice publication and a ten-day creditor declaration window; real property requires notarisation and land registration; lease contribution requires landlord consent where the lease prohibits assignment.

Step 4 — Draft the Articles of Association

The articles must be in writing, usually by private deed signed by all founders. Notarial form is mandatory when contributions include real property subject to land registration. At least two originals are required. The articles must contain mandatory general content (legal form, duration up to 99 years, corporate name, registered office, corporate object, share capital) plus SAS-specific content: conditions under which the company is managed; conditions for appointing the president; identification of decisions requiring collective shareholder action and how they are taken; designation of the governance organ before which employee representative bodies exercise their rights; and, where applicable, clauses on share transfers, change-of-control events, temporary inalienability, and shareholder exclusion.

The president is the only governance organ required by law — any limitation on the president's powers in the articles is unenforceable against third parties acting in good faith. Other organs (directeurs généraux, supervisory committees, advisory boards) are entirely optional. One key SAS freedom: the president can be a legal entity, not just an individual — a holding company can serve as president of its SAS subsidiary. Before finalising the corporate name, check availability at INPI against both existing company names and registered trademarks, and secure the domain name promptly after confirmation.

Step 5 — Establish the Registered Office

The registered office determines the applicable law, the jurisdiction of the competent commercial court, and the RCS. The office can be located in premises the company owns, leases commercially, or occupies under a domiciliation agreement. A SAS can be registered at the president's home address even where a lease or co-ownership prohibition exists — a statutory right for up to five years after written notification to the landlord or co-ownership body; this right extends to the directeur général and directeur général délégué under Cour de cassation case law. A domiciliation service is lawful provided the provider holds a valid prefectoral authorisation, is registered with the RCS, and has a written contract with the SAS for a minimum of three months renewable by tacit agreement.

Step 6 — Sign and Register

Pre-Registration Acts: Managing the Formation Period

A SAS does not legally exist until it is registered with the RCS. But founders often need to conclude contracts before registration is complete. Acting in the name of a company that does not yet legally exist creates personal liability (Art. L. 210-6; Art. R. 210-6). Three structured mechanisms exist to transfer that liability to the company once it is registered: (1) annexing a list of acts with resulting obligations to the articles before they are signed — automatic takeover on registration; (2) a specific mandate given by founders to one or more of their number, identifying defined contracts with sufficient precision (a general mandate is ineffective) — automatic takeover on registration; (3) a post-registration collective shareholder decision to ratify any acts not covered by the prior mechanisms. The Cour de cassation has, since 2023, softened its previously strict approach by allowing courts to assess the common intention of the parties from all circumstances — but clear language in every formation-period contract remains the prudent approach.

This article is for general information only. It does not constitute legal advice and does not create a lawyer-client relationship. French company law is technical and fact-specific. Always seek qualified legal advice before taking any steps toward company formation in France.