Why choose SAS as a company form?

What is an SAS?

The Simplified Joint Stock Company (“société par actions simplifiée” or more commonly known as a “SAS“) is a form of commercial company which attracts a growing number of entrepreneurs, investors and managers. It rests on a flexible legal framework, where each shareholder is liable for the corporate debts only up to the amount of his contributions.

Unlike the public limited company (SA), the SAS cannot make public offerings. But it allows the issuance of shares or other securities, while offering exceptional contractual freedom in its internal organization.

In summary, the SAS is a tailor-made structure, combining the security of capital companies with the flexibility of statutory freedom.

Why is the SAS considered as a major legal innovation?

Law no. 94-1 of January 3, 1994 introduced the SAS as a new generation of company. It is the first major reform of company law since the creation of the SARL in 1925.

With the SAS, France adopted a competitive legal form compared with Anglo-Saxon standards, combining autonomy of the shareholders, tailor-made governance, and efficiency in decision-making.

Why does the SAS have such success in France?

The growth of the SAS has been spectacular over the past years. It has established itself as the preferred form of commercial company in business creations.

📈 Evolution of SAS creations:

• 2008: 4%

• 2015: 48%

• 2022: 67%

Today, the SAS represents nearly 42% of commercial companies in France, ahead of the SARL. This success reflects its adaptability to contemporary economic realities.

For what types of projects is the SAS suitable?

The SAS is a protean company, able to adapt to almost all activity models. It is particularly well adapted for:

• Innovative startups seeking fundraising,

• SMEs and mid-sized companies wishing a flexible structure,

• Subsidiaries of international groups,

• Family companies, with personalized control clauses,

• Investment or holding vehicles.

Thanks to its statutory flexibility, the SAS can be formed by a single person (SASU) or by several shareholders with very varied profiles.

Is the SAS really easy to create?

Yes, and increasingly so.

At its beginnings, the drafting of the bylaws of the SAS could be complex due to the freedom offered. But legal practice quickly produced reliable models, adapted to different types of projects:

• Simplified bylaws for SASU,

• Standard clauses for family or growth SAS,

• Advanced clauses to organize differentiated rights (vote, dividends…).

👉 On frenchco.lawyer, we offer tailor-made SAS creation formulas, drafted and validated by lawyers.

Is the functioning of the SAS complex?

The SAS rests on a logic of agility and de-formalization. Unlike the SA, it:

• Does not impose a board of directors,

• Allows meetings to be held remotely (videoconference or writings),

• Authorizes a personalized delegation of powers.

Result: simpler, faster, less costly governance, without giving up legal security.

What strategic advantages does the SAS offer?

The SAS allows the implementation of powerful legal leverage effects, in particular in the structuring of capital and governance.

Concrete examples:

• Voting rights adjustable without mandatory link to the amount of contributions,

• Preference shares offering privileged dividends or reinforced rights,

• Contractual clauses allowing vetoes, shareholder agreements, exit conditions, etc.

👉 These tools allow to optimize bargaining power, facilitate fundraising, and control capital developments.

Is the SAS legally secure?

Yes, provided it is properly framed.

The statutory freedom of the SAS is marked out by several principles:

• The existence of a corporate interest proper to the company,

• Respect for equality between shareholders,

• Supervision of arrangements by case law and by notarial or lawyer practice.

Advanced arrangements (usufruct, holding, subsidiary creation, mixed companies) are today fully securable in SAS with adapted legal support.

Is the SAS a simple or complex form?

The SAS is as simple or as sophisticated as your project requires. Its great strength lies in its modularity:

• For a simple project: concise bylaws and light governance,

• For a complex project: detailed clauses, control mechanisms, shareholder agreement…

👉 It is not the form which is complicated, but the poor legal anticipation which can become so. Hence the importance of professional support.

Does the SAS present a risk in labor law?

Some critics feared that the SAS would allow bypassing certain social obligations. But this does not withstand analysis.

The SAS remains subject:

• To the labor code like any company,

• To the presence of a Works Council (CSE) once thresholds are crossed,

• To controls of abusive delegation of powers by case law.

The freedom of internal organization does not allow removing collective rights, but it facilitates effective governance while respecting the legal framework.

Does the SAS protect minority shareholders?

Yes, if the bylaws are drafted carefully.

It is possible to insert:

• Approval clauses,

• Preemption or joint exit rights,

• Exclusion clauses under conditions.

👉 Properly framed, the SAS allows protecting both the majority founder and the minority shareholders, contrary to the image sometimes conveyed.

Is the SAS a company of the future?

Absolutely. The SAS is today:

• The most created form of company in France,

• Recognized for its flexibility and legal strength,

• Adapted as well to micro-enterprises, SMEs, family groups, investment funds, as to international companies.

It offers an evolving, secure framework, compatible with modern fiscal, social and contractual requirements.

Choosing the SAS as legal structure

A flexible, secure company adapted to modern entrepreneurship

The Simplified Joint Stock Company (SAS) attracts more and more entrepreneurs, investors and groups in France and internationally. Halfway between the contractual flexibility of partnerships and the advantages of the corporation, the SAS stands out by its flexibility, its protection of the shareholders and its capacity to adapt to all types of projects, from the start-up to the subsidiary of an international group.

1. Limited liability and advantageous taxation

• Liability of the shareholders: It is limited to the amount of contributions. No shareholder can be held personally liable for the corporate debts.

• Tax regime:

  • By default, the SAS is subject to corporate tax (IS).

  • It can operate under income tax (IR) temporarily, up to five fiscal years, if it meets certain conditions (less than 50 employees, annual turnover or total balance sheet < €10M, created for less than 5 years, etc.).

  • This choice is often strategic at the launch phase, in particular for founders wishing to offset the initial losses against their global income.

2. A closed, secure and controlled company

The SAS is a “closed” company: it cannot make public offerings. This means:

• A controlled circle of shareholders: The shareholders are generally people who know each other or who share a common project.

• Strictly regulated transfer: The bylaws may contain approval, preemption, or inalienability clauses to prevent the entry of undesirables.

  • In case of violation, the sanction can go as far as the nullity of the transfer, which is much more dissuasive than a simple compensation.

  • These clauses have enforceability against third parties, because the bylaws are public, filed with the registry of the commercial court.

3. Flexibility in organization and governance

The SAS offers great statutory freedom, far superior to the SARL or the SA:

Governance:

• Only legal obligation: appoint a president, natural person or legal entity, who represents the company with respect to third parties.

• The shareholders can freely:

  • Create other management bodies: managing director, strategic committee, internal board of directors, etc.

  • Define the terms of appointment, removal, remuneration and organization of powers.

  • Establish a hierarchy of directors or a collegial system.

Delegation:

• The president may delegate his powers to any other director provided by the bylaws (managing director, deputy managing director, etc.).

• This delegation can be total or partial, temporary or permanent.

Conclusion: a tailor-made tool for modern entrepreneurs

The SAS has become, in France, the corporate form preferred by entrepreneurs, start-ups, foreign investors and groups. Its modularity and reinforced legal protection make it a real contractual tool, provided that time is taken to draft solid and balanced bylaws.