How to Create an SAS in France: Conditions and Process

The Société par Actions Simplifiée (SAS) has, over the past two decades, become the leading corporate form for entrepreneurs in France. Start-ups, family-owned groups, and even large multinational subsidiaries are choosing this structure because of its flexibility, adaptability, and efficiency. Unlike the traditional Société Anonyme (SA), which is governed by rigid rules, or the SARL, which can be restrictive, the SAS provides shareholders with freedom to design their own governance model.

But this flexibility does not mean informality. On the contrary, the creation of an SAS is subject to a strict legal framework. Founders must respect both conditions of validity and a multi-step incorporation process. Every detail — from shareholder consent to the deposit of share capital, from bylaws drafting to registration — has to be handled carefully, as mistakes can lead to delays, liabilities, or even nullity.

This guide provides a comprehensive overview of the conditions and procedure for creating an SAS, highlighting the legal foundations, the role of shareholders and contributions, the drafting of bylaws, and the administrative formalities required for registration.

1. Legal Foundations for Creating an SAS

The SAS is governed by the general rules applicable to commercial companies as set out in Articles L. 210-2 to L. 210-9 of the French Commercial Code. To this common core are added:

• Specific rules for joint stock companies (Articles R. 224-1 and R. 224-2 of the Commercial Code),

• References to provisions on SAs (Articles L. 225-3 to L. 225-16), especially for contributions and appointment of directors.

At the same time, the SAS enjoys several statutory exemptions:

• It cannot be created by a public offering of shares (contrary to the SA),

• It benefits from more flexible rules for contributions in industry,

• Its internal organization is largely left to shareholder autonomy, except for the mandatory presence of a president.

In short, the SAS combines the corporate form of a joint stock company with the contractual flexibility of a partnership, which explains its rapid rise in popularity.

2. Validity Conditions for Incorporating an SAS

Creating an SAS is, at its core, the conclusion of a contract between shareholders. Therefore, both contract law principles and company law rules apply.

a. General conditions of contract law

Like any contract, the SAS incorporation agreement must meet the following requirements:

• Consent must be free and informed, without error, fraud, or duress.

• Each shareholder must have legal capacity to contract. For example, minors or protected adults can only participate under strict conditions.

• The corporate purpose (objet social) must be lawful and achievable. An unlawful activity (e.g. trafficking) would make the SAS void.

b. Conditions specific to company law

To qualify as a company, the SAS contract must include:

• Affectio societatis (the common intention to cooperate as associates),

• Participation in profits and losses,

• A minimum of two shareholders, except in the case of an SASU (single-shareholder SAS).

Failure to meet these conditions can jeopardize the validity of the incorporation.

c. Nullity and legal security

Article L. 235-1 of the Commercial Code restricts nullity of companies. A company may only be annulled if the law expressly provides for it. Consequently:

• Defects in consent,

• Incapacity of one shareholder (unless all founders are affected),

• Leonine clauses (clauses excluding a shareholder from all profits or losses)

→ Do not cause nullity of the SAS.

Nullity, however, will apply if the corporate purpose is unlawful or contrary to public policy, in line with European Directive 2017/1132.

This system ensures legal certainty: once registered, an SAS cannot easily be challenged.

3. Shareholders and Share Capital Requirements

a. Who can be a shareholder?

The SAS is open to any natural or legal person, French or foreign. There are no nationality restrictions. Even minors can be shareholders under certain conditions (generally through legal representatives).

This openness explains why the SAS is often used for international joint ventures: foreign companies can easily take equity stakes without nationality or residency restrictions.

b. Share capital of the SAS

Unlike the SA, the SAS has no minimum legal capital requirement. The capital may be set freely and can even be symbolic (e.g. €1). Shareholders may choose between fixed capital or variable capital, depending on whether they want flexibility to adjust capital without amending the bylaws.

Contributions can take three forms:

1. Cash contributions (apports en numéraire):

   • Must be deposited into a blocked account (bank, notary, or lawyer’s CARPA account) before signing the bylaws.

   • A deposit certificate is required.

2. Contributions in kind (apports en nature):

   • Assets (real estate, equipment, intellectual property) contributed to the SAS must be valued by a commissaire aux apports (auditor).

   • Exemption: if the contribution is below €30,000 and does not exceed 50% of share capital.

   • The valuation report is annexed to the bylaws.

3. Contributions in industry (apports en industrie):

   • Involve providing know-how, services, or reputation.

   • Do not contribute to capital, but grant shares and voting rights.

   • Must be explicitly detailed in the bylaws.

This flexibility makes the SAS particularly attractive for start-ups, where founders often contribute expertise or intellectual property rather than cash.

4. Step-by-Step Process of Incorporating an SAS

Creating an SAS is not limited to signing a contract. It follows a precise, multi-step procedure.

Step 1: Drafting the bylaws

The bylaws (statuts) form the constitution of the SAS. They must include:

• Legal form, name, and registered office,

• Corporate purpose,

• Share capital amount,

• Duration (maximum 99 years),

• Governance rules (appointment of president and other bodies),

• Distribution of profits and decision-making processes.

The bylaws may also contain optional clauses, such as:

• Approval clauses for share transfers,

• Inalienability clauses,

• Drag-along/tag-along clauses in case of sale,

• Founders’ rights or restrictions on control.

A schedule of acts carried out on behalf of the company before registration can be annexed.

Step 2: Deposit of cash contributions

Cash contributions must be deposited in a blocked account. The depository issues a certificate of deposit, which is mandatory before signing the bylaws.

Step 3: Valuation of contributions in kind

If assets are contributed, they must be valued by an auditor of contributions unless exempted. The report is annexed to the bylaws and secures the interests of shareholders by preventing over-valuation.

Step 4: Signature of the bylaws

Once contributions are finalized:

• The bylaws are signed by all shareholders (or their proxies).

• They may be executed under private signature or by notarial deed.

• In the case of an SASU, the sole shareholder signs alone.

The identity of the initial directors and beneficiaries of special advantages must appear.

Step 5: Post-signature formalities

1. Legal notice publication

   • A notice must be published in an authorized journal of legal announcements in the département of the registered office.

   • It must mention the company form, name, purpose, share capital, directors, and decision-making rules.

2. Registration

   • The incorporation file is submitted to the single business formalities desk (guichet unique).

   • Required documents include: bylaws, deposit certificate, Form M0, and declaration of beneficial owners.

   • Registration at the RCS (Registre du Commerce et des Sociétés) gives the SAS legal personality (Art. L. 210-6).

   • The incorporation is published in the BODACC.

3. Takeover of prior acts

   • Acts entered into before registration must either be expressly adopted or authorized in advance.

   • If not, the individuals who signed remain personally liable.
     

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5. Appointment of Directors, Auditors, and Beneficial Owners

• Directors: The president must always be appointed in the bylaws. Other governance bodies may be added.

• Statutory auditors (commissaires aux comptes): Not mandatory at incorporation but required if certain thresholds are exceeded (e.g. turnover, balance sheet, employees).

• Beneficial owners: Since 2017, a declaration is mandatory identifying individuals holding more than 25% of shares or voting rights, or exercising control.

6. Mandatory Information on SAS Documents

All commercial documents (invoices, letters, websites) must include:

• Corporate name + “SAS”,

• RCS number and registry city,

• Registered office address,

• Amount of share capital,

• Mention of variable capital if applicable,

• Liquidation status if applicable.

Conclusion: A Structured Process, Not Just a Formality

The incorporation of an SAS may appear flexible and simple compared to other French company forms, but in reality it is a structured legal process. From obtaining shareholder consent to depositing funds, drafting bylaws, appointing directors, and completing registration, each step involves precise rules and potential liabilities.

For entrepreneurs, the SAS offers unparalleled contractual freedom and adaptability. But this freedom must be exercised with rigor. Poorly drafted bylaws or neglected formalities can lead to disputes, liability, or invalidity.

For this reason, seeking legal and accounting support (from a lawyer or chartered accountant) is strongly advised. An expert can secure the incorporation process, ensure compliance with the Commercial Code, and help tailor the governance of the SAS to the needs of the business project.