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Issue Sweet Equity in French SASU
Grant Sweet Equity in your SASU with the help of our French corporate lawyers and paralegals.
We handle everything from start to finish — drafting the legal documentation, defining vesting or performance conditions, updating bylaws, filing with the Registry, and issuing certificates of ownership.
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What is Sweet Equity in a SASU?
Sweet equity refers to shares or share options granted to founders, managers, or key employees as a reward for their contribution to the company’s creation or growth.
It is a common mechanism in French startups and SASUs to align personal incentives with company performance while keeping cash expenses low.
Sweet equity typically involves preferential shares or subscription rights (BSPCE, BSA, or shares issued below market value) tied to performance, time, or exit conditions.
When structured correctly, it combines legal compliance, tax efficiency, and strategic motivation for talent retention or founder rebalancing.
Main Advantages :
Motivational tool: aligns key contributors with company success through equity participation.
Flexible structure: can take the form of shares, BSPCE, or warrants, depending on the stage of the business.
Tax efficiency: potential capital-gains treatment (vs. salary taxation) if structured under BSPCE or equivalent schemes.
No upfront cost for recipients: sweet equity often involves deferred payment or performance-linked acquisition.
Investor compatibility: properly documented equity plans are fully compatible with venture-capital standards.
Sweet equity is particularly suited to founders, managers, or early employees of a SASU preparing for fundraising or long-term incentive alignment.
How to Issue Sweet Equity in France?
Implementing a sweet-equity plan in a SASU is highly regulated but straightforward when managed by legal professionals.
Here is how FrenchCo.lawyer supports you step by step:
Gathering Essential Information
We identify eligible beneficiaries, define the intended equity mechanism (new shares, warrants, or BSPCE), and review the existing capital structure to ensure compliance.
Drafting Legal Documentation
Our lawyers prepare resolutions authorizing the equity issue, amend the bylaws if necessary, and draft subscription or vesting agreements adapted to your case.
Valuation and Pricing Review
We assist in determining fair value and tax-safe pricing to avoid reclassification as disguised salary. If required, we liaise with auditors for valuation certificates.
Filing and Publication
We publish the legal notice, file the documentation with the Commercial Court Registry, and update the company’s corporate records and share register.
Delivery of Ownership Proof
We issue share certificates or equity instruments (BSPCE/BSA) and provide official proof of registration — your sweet equity program is now fully enforceable.
With FrenchCo.lawyer
With registered French lawyers and experienced paralegals, we ensure that your sweet-equity plan is legally valid, compliant with French tax law, and investor-ready. We deliver fast, secure, and compliant solutions so you can focus on rewarding your team and attracting investors with peace of mind.
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What We Need From You to a Issue Sweet Equity in a SASU ?
To implement your plan efficiently and in full compliance, we will simply ask for:
Company Details
Your company name, registration number, and current shareholding structure.
Beneficiary Information
Identity and role of each person eligible for sweet equity (founder, manager, or key employee).
Equity Plan Parameters
Type of instrument (shares, BSPCE, or warrants), number to issue, and vesting or performance conditions.
Valuation Data
Most recent company valuation or supporting data to determine issue price and fair market value.
And Then?
Once we have these elements, our lawyers handle the entire legal process: drafting resolutions and agreements, performing filings, issuing certificates, and updating the company registry. Your sweet-equity program becomes fully effective and legally registered.
Issue Sweet Equity in a SASU – Simple Process, Clear Budget
Flat legal fee starting from €999 excl. taxes*
Additional mandatory costs: publication in the official legal gazette + court registry filing fees
No hidden costs, no unpleasant surprises
Our commitment:
No generic templates or unclear valuations
No hidden intermediaries
We Believe in Transparent, Lawyer-Led Equity Structuring
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Why Choose Us?
We Believe in Transparent, Lawyer-Led Equity Structuring
Accurate and strategic structuring: From valuation to shareholder documentation, we handle each stage with precision.
Legally compliant instruments: Every share class, option plan, or agreement is drafted in full accordance with French corporate law.
Protective legal drafting: Your sweet equity terms are designed to safeguard founder control and align investor incentives.
High professional standards: All work is overseen by licensed French lawyers, ensuring fairness, legality, and accountability.
Let us take care of your equity structuring –
so you can focus on growing your business in France.
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Understanding the Issuance of Sweet Equity in a French SASU
Can a foreigner receive sweet equity in a SASU (and can they serve as president)?
Yes. Foreign individuals or legal entities can be granted sweet equity (e.g., discounted shares, BSPCE, BSA, or performance-linked equity) in a SASU. A foreigner may also serve as president. What matters is residency plans, not nationality.
1) Beneficiaries/Presidents living abroad
No French residence permit is required merely to receive equity or to act as president from abroad. The plan documents and corporate filings can be completed remotely and registered with the RCS.
2) EU/EEA/Swiss citizens
Free to receive sweet equity or preside. If relocating to France, a simple mairie registration after arrival may apply; no residence card is required.
3) Non-EU residents settling in France
They must obtain a suitable residence permit (e.g., entrepreneur/profession libérale, multi-year card, relevant Talent permits). Non-compliance may entail penalties.
4) Special bilateral regimes
Some nationalities (e.g., Algeria, Andorra, Monaco) benefit from treaty-based rules.
5) Registration with the RCS
Once any immigration steps (if relevant) are cleared, the sole shareholder’s decision, issuance terms, and any bylaw updates are filed with the Commercial Court Registry so the plan is opposable to third parties.
What are the social security implications of issuing sweet equity?
It depends on the instrument and beneficiary status:
- President of a SASU/SAS = assimilé-salarié. Social contributions are driven by salary, not by mere equity holding.
- BSPCE/BSA/Share warrants: no social charges at grant; taxation typically arises at exercise/sale (see tax section).
- Free/discounted shares to employees or officers: if the discount is excessive or conditions are weak, the benefit can be requalified as salary and subject to payroll contributions.
- Non-employee beneficiaries (advisors/consultants): equity in lieu of fees can be recharacterized as professional income if not properly structured.
Key point: Structure vesting/performance and valuation carefully to avoid requalification into salary.
What evidence and documents are required?
- Sole shareholder’s decision authorizing the plan (instrument type, pool size, pricing method, vesting/performance).
- Plan rules/agreements (BSPCE/BSA terms, share subscription/award agreements, leaver clauses, anti-dilution where relevant).
- Valuation file (board memo, cap table, recent round references, or auditor note).
- Publication certificate (JAL) if required by the operation;
- Registry forms and bylaw updates (for capital mechanics), plus fees;
Registers: equity instrument register and, on exercise/issuance, share register.
What are the step-by-step formalities for implementing sweet equity?
- Decision of the sole shareholder
Approve the plan type (BSPCE/BSA/shares), pool size, pricing/valuation method, vesting/performance, and enabling bylaw authorizations. - Draft plan rules & agreements
Prepare plan regulations, individual grant letters, subscription/award agreements, and legal notice content. - Grant/Issuance
Execute grant letters or issue warrants; open/update the instrument register; collect any issue price (if applicable). - Publication & filing
Publish in a journal d’annonces légales where required; file the dossier with the RCS (decision, plan terms, publication proof, forms, fees). Ensure bylaws enable future capital increases on exercise/vesting. - Exercise/Vesting → share issue
On vesting/exercise, collect exercise price (if any), issue new shares, update bylaws and Kbis to reflect capital changes; update the share register.
How does a SASU sweet-equity plan compare to EURL tools?
Aspect | SASU/SAS | EURL |
Default tax | IS | IR by default (if individual) or IS by option |
Social regime | President = assimilé-salarié | Majority manager = TNS |
Incentive toolkit | Broad (BSPCE, BSA, preferred shares) | Limited; often converted before grants |
Investor readiness | High (VC-standard instruments) | Lower; governance more rigid |
Bottom line: SASU/SAS is the preferred vehicle for clean, investor-grade sweet-equity incentives.
Is there a minimum “capital” or price requirement for sweet equity?
There is no statutory minimum capital tied to sweet-equity plans in a SASU, but pricing must be coherent and justified:
- Instrument choice drives pricing:
- BSPCE (employee stock warrants): free or low grant price, exercise price set by board/shareholder decision based on fair value.
- BSA/BSA-Air (investor/partner warrants): issue price (often modest) + exercise price defined now for future share subscription.
- Discounted shares/performance shares: issue price or vesting conditions must reflect valuation to avoid salary requalification.
- BSPCE (employee stock warrants): free or low grant price, exercise price set by board/shareholder decision based on fair value.
- Valuation discipline: Use recent financing rounds, formal valuation methods, or an auditor where appropriate—especially before fundraising.
- Vesting/performance: Conditions can reduce upfront cash outlay but must be objective and documented.
Practical note: purely symbolic pricing may undermine credibility with investors and auditors and can create tax/social risk for beneficiaries.
Where can my SASU be registered (siège social) when granting sweet equity?
The registered office options are unchanged by a sweet-equity plan:
- Owned/leased premises (property title or commercial lease);
- President’s home (subject to statutory/lease/co-ownership limits; often time-limited in large cities and without client/stock reception);
- Domiciliation company (prefecture-approved providers);
- Parent company’s address (if one entity lawfully enjoys the premises).
Risks if mishandled: lapsed temporary domiciliation → potential strike-off; lease/co-ownership breaches → termination; non-approved domiciliation → fines. Choose an address balancing cost, compliance, and credibility.
What taxes are relevant for a SASU sweet-equity plan?
Taxation hinges on the instrument and the beneficiary:
- At the company (SASU)
- Corporate tax (IS): unchanged. Legal/valuation costs are generally deductible under ordinary rules if incurred in the company’s interest.
- No tax merely for adopting a plan; taxation arises when shares are issued (capital/premium booking) or when cash is paid/received.
- At the beneficiary
- BSPCE: typically capital-gains style taxation on sale (subject to holding/role conditions).
- BSA/BSA-Air: gain is generally realized on sale of shares after exercise; tax depends on residency and personal regime.
- Discounted/Free shares: if the discount is too high or conditions are not respected, the advantage can be taxed as employment income with social charges.
- Non-residents: check tax treaties; French withholding may apply in certain cases.
- VAT/registration
- Equity grants and warrant issues are generally outside VAT scope; registration duties are limited or inapplicable, except for specific asset contributions.
Good practice: align the exercise price/valuation with recent financings; document vesting and performance to reinforce the capital-gains route.
Sweet equity vs convertible bonds (OCA): which to choose?
Aspect | Sweet Equity | OCA (Convertible Bonds) |
Nature | Equity incentives/options | Debt that can convert |
Cost to company | No interest | Interest until conversion |
Dilution | On vesting/exercise | At conversion |
Cash raised | Usually low initially | High (loan principal) |
Signaling | Talent alignment | Balance-sheet leverage |
Best for | Team motivation, early alignment | Larger financing with deferred dilution |
Sweet equity vs ordinary share issue: what’s the difference?
Aspect | Sweet Equity (BSPCE/BSA/discounted shares) | Ordinary Share Issue |
Immediate dilution | Limited/none (until vest/exercise) | Immediate |
Cash to company | Often modest (issue/exercise later) | Full subscription now |
Talent incentives | Strong (performance/vesting) | Weak (investor-oriented) |
Complexity | Plan rules + filings | Simpler (straight equity) |
Tax for beneficiaries | Often capital-gains-like (if conditions met) | Depends on acquisition context |
Best use | Talent retention, founder rebalancing | Direct fundraising |
Issue Sweet Equity in Your SASU
Let our French lawyers & paralegals handle the process for you.
More About issuing sweet equity in SASU
Can a SASU issue sweet equity?
Yes. A SASU can issue sweet equity shares to reward founders, directors, or key contributors for their value creation or performance.
These special shares — sometimes called preference shares — may offer enhanced dividend, voting, or exit rights.
All rights must be clearly defined in the articles of association or an investment agreement, drafted under French law.
What documents will I need?
To issue sweet equity, you will need:
The updated articles of association reflecting the new share classes;
A shareholders’ (or sole shareholder’s) decision authorising the issue;
The valuation report or supporting documentation (if required for pricing);
Updated cap table and share register;
The filing documents for registration with the Commercial Court Registry (Greffe du Tribunal de Commerce).
Our team prepares and files all necessary corporate and registry documentation.
Do I need statutory auditor?
Not always.
An auditor’s report (commissaire aux apports) is required only if sweet equity is issued for a contribution in kind (e.g. services, assets).
If the issuance is purely cash-based or bonus-based, no auditor is mandatory.
However, we recommend a review if significant valuation differences exist — for legal security and tax purposes.
How long does the process take?
Typically 10 to 15 business days, depending on:
The complexity of the rights being granted,
Whether shareholder or board approval is needed, and
The Registry’s processing time.
We manage drafting, signing, and filing electronically, so the timeline remains efficient and predictable.
Can I issue sweet equity remotely?
Yes — fully remotely.
All steps, including signature of resolutions, amendment of statutes, and registry filings, can be handled digitally.
We prepare all documents, coordinate secure e-signatures, and deliver your updated Kbis extract confirming the sweet equity issuance.
What are the typical costs?
Our flat legal fee for a sweet equity issuance starts from €1,200 (excl. taxes).
Mandatory third-party costs include:Publication in the Legal Gazette (~€200),
Registry filing fees (~€70).
Complex structures (e.g. multiple share classes, cross-border shareholders, or investor agreements) may involve additional work — always quoted in advance.
No hidden costs.
What about beneficial ownership (UBO) and compliance?
Every SASU must update its RBE (Registre des Bénéficiaires Effectifs) when new share classes or rights affect control.
This filing ensures compliance with French AML (anti–money laundering) and transparency obligations.
We prepare and submit the updated RBE form automatically after your sweet equity issuance.
Can I convert or cancel sweet equity later?
Yes.
Sweet equity shares can be converted, repurchased, or cancelled under specific conditions defined in your articles or shareholder agreements.
This may occur when a performance condition is met, employment ends, or in case of exit or dilution events.
We assist with the full legal and tax documentation to maintain compliance and continuity.
