SAS vs SARL vs SA: Which French Company Structure Is Right for You?

Share Capital: What Each Structure Requires

The SA requires a minimum capital of €37,000 — a statutory floor that cannot be waived. The SAS and the SARL have no statutory minimum. The SAS has a capital option unavailable to the SA: variable capital (Arts. L 231-1 to L 231-8) — under a variable capital clause, the SAS can increase or decrease capital without the formal procedure for ordinary capital changes, provided movements stay within the maximum and minimum thresholds fixed in the articles (floor: at least one-tenth of stated capital). The SAS also uniquely accepts apports en industrie (Art. L 227-1 al. 4) — contributions of services, expertise, or know-how; shares issued in exchange are inalienable and do not contribute to stated capital but carry full economic and voting rights.

Governance: The Central Difference

In a SARL, critical governance rules are set by statute: managers must be individuals; ordinary decisions require a majority of shares; extraordinary ones require two-thirds. There is no mechanism for differential voting rights. The SA operates under France's most elaborate statutory governance framework — designed for widely-held public companies, it sits awkwardly on most closely-held businesses. Its sole irreplaceable advantage: it is the only form that can be listed on a regulated French market. In a SAS, governance is almost entirely statutory-free. The law requires only a president and that the articles specify how the company is managed. The full menu of investor-grade instruments is available: multiple voting rights, preference shares with priority returns, redemption rights, veto rights on strategic decisions, drag-along and tag-along protections — all enforceable within the articles themselves.

Management Social Status

In a SARL, the manager's social insurance regime depends on their shareholding: a majority manager is classified as an independent worker (travailleur non-salarié); a minority or equal manager is subject to the general employees' social security regime. In both the SA and the SAS, all remunerated directors — the president and directeur général — are subject to the general employees' regime regardless of their shareholding level. A president of a SAS who holds 90% of the shares receives the same social coverage as a 1% shareholder, provided they receive remuneration. Only the SAS allows a legal entity to serve as its management officer — a holding company or parent entity can be president of a SAS subsidiary, exercising the function through its own legal representative. This is impossible in the SARL and SA.

Share Transfer Rules, Tax, and Key Governance Differences

SARL parts sociales are not freely transferable — transfers to third parties require statutory approval by shareholders representing at least 50% of share capital. SAS shares are in principle freely negotiable as securities, but articles can impose a comprehensive menu of restrictions: inalienability up to ten years; pre-emption rights; approval clauses; change-of-control triggers. Any transfer made in breach of SAS articles is null and void by operation of law. SA shares are also in principle freely negotiable, with articles able to restrict.

All three structures default to corporate income tax (IS) at 25% (standard) or 15% (reduced rate on first €42,500 for qualifying companies). The SAS has a unique tax option not available in the SA: the five-year partnership election under Art. 239 bis AB CGI, allowing the SAS to be taxed as a transparent partnership for up to five fiscal years — profits and losses attributed directly to shareholders. The election requires all conditions simultaneously: SAS in existence less than five years; genuine operational activity; capital and voting rights at least 50% held by individuals and at least 34% by a president or DG with their household; fewer than 50 employees; turnover or balance sheet below €10 million; unanimous shareholder consent; notification to tax authorities within first three months of the fiscal year. Its main benefit: individual shareholders can offset early operating losses against other personal income.

The SAS regulated transactions framework (Art. L 227-10) is meaningfully narrower than the SARL or SA equivalent: no pre-authorisation; only direct interest caught (indirect interest excluded); director not stripped of vote; post-facto shareholder approval only. For groups with regular intra-group commercial flows, this avoids the procedural burden of mandatory prior authorisation for every intra-group transaction. Statutory auditor requirements have been harmonised across all three forms since the Pacte 2019 reform: mandatory appointment when the company exceeds two of three thresholds (€5M balance sheet / €10M turnover / 50 employees), with subsidiary-level rules for group structures. Converting any company to a SAS always requires unanimous shareholder approval — no exception (Art. L 227-3). Personal guarantees given before transformation survive the change of form and are not discharged by it.

Which Structure Fits Which Situation?

Full Comparison at a Glance

This article is for general information only. It does not constitute legal advice. The choice of legal structure depends on facts specific to each situation. Always seek qualified legal advice before making a final decision on company form in France.