How is the SAS Different From Other Company Forms in France?

SAS vs SARL, SA, Micro-Entrepreneur and Other Corporate Forms: Choosing the Right Business Form in France

Why compare the SAS to other French companies?

The Simplified Joint Stock Company (SAS) is today the preferred structure of many business founders. It is modern, adaptable, and allows a totally customizable internal organization. But is it always the best legal form for all projects?

To make the right choice, it is essential to compare the SAS with the other French structures: SARL, SA, partnership limited by shares, EURL, SASU, or even the new status of sole trader (EI).

How is the SAS different from partnerships?

Although classified among capital companies, the SAS shares certain traits with partnerships (person-based companies or, in French, “sociétés de personnes“, such as SNC, civil companies, partnerships limited by shares). Similarities include:

• A strong personalization of the relations between partners (intuitu personae),

• The possibility to integrate approval clauses, control of capital, or exclusion,

• A free organization of power and rules of management.

But the SAS distinguishes itself fundamentally from person-based companies, in that:

• It guarantees a liability limited to contributions,

• It can issue all kinds of financial securities,

• It is designed for projects of varied size, including those involving investors and fundraising.

Conclusion: The SAS combines the relational flexibility of partnerships with the legal strength of capital companies.

How is the SAS different from a public limited company (“société anonyme” or “SA“)?

The SAS is generally considered much more flexible than a SA.

The SAS attracts companies that wish to free themselves from the regulatory burdens of the SA. Here are its main assets:

• No obligation of a board of directors,

• Complete freedom of organization (sole president or collegial management),

• Articles of association totally free, without a rigid predefined framework,

• Less formality (decisions in writing or by videoconference, flexible delegation).

However, the SAS cannot make a public offering of securities, contrary to the SA. It is therefore ideal for unlisted companies, SMEs, group subsidiaries, or family businesses.

How is the SAS different from a partnership limited by shares (“société en commandite“)?

Partnerships limited by shares (SCA) remain rare in France and reserved for very specific arrangements. The SAS offers a modern and more secure alternative:

• No unlimited liability (contrary to the general partners),

• Contractual freedom to organize management and control,

• Better readability for partners, bankers, investors.

However, the SAS has a limit: it cannot offer its securities to the public, which the SCA allows. All the same, the SAS often constitutes a more attractive and less risky solution.

How is the SAS different from the SARL?

Historically, the SARL was the dominant corporate form in France. However, since 2015, the SAS has overtaken it in terms of new company creations.

In 2022, statistics showed that 37% of new businesses were incorporated as SASU, while only 14% were formed as EURL. This trend confirms the growing preference for the SAS structure.

The SAS holds several decisive advantages. Its articles of association are freely drafted, whereas the SARL is bound by restrictive legal rules. In addition, the SAS benefits from negotiable shares, which are particularly favorable to investment and fundraising. It also projects a better image of governance, with a president considered more modern and flexible than the traditional manager of a SARL. Finally, the SAS allows voting rights to be organized independently from capital contributions, which offers greater flexibility for shareholders.

Nevertheless, the SARL still retains important strengths. Its structure is simple and reassuring, especially for artisans and shopkeepers. It also provides standard articles of association that suit very small businesses with no complex legal needs. Moreover, the SARL remains well adapted to family-run businesses, where management is straightforward and easy to supervise.

What is the difference between the SASU and the EURL?

These two single-member company forms share a similar purpose: they allow a sole entrepreneur to create a company with limited liability. However, they differ on several important points.

For the SASU:

• The president is subject to the employee social security regime (except if he or she is not remunerated).

• The articles of association are tailor-made, offering great freedom in drafting.

• Corporate income tax (IS) applies by default, with the possibility of a temporary option for personal income tax (IR).

• The president may be either a natural person or a legal entity.

For the EURL:

• The manager falls under the self-employed workers’ regime.

• Personal income tax (IR) applies by default, although there is an option to choose corporate income tax (IS).

• The manager must necessarily be a natural person.

• There are fewer possibilities in terms of investment and the issuance of securities.

In practice, the EURL remains a good choice for a freelancer or artisan. By contrast, the SASU is more suitable for a scalable project, especially one involving fundraising or the hiring of employees.

How is a SASU different from a sole trader status (“entrepreneur individuel” or “EI”)?

Since the 2022 reform, the new status of sole trader (EI) makes it possible to limit liability without creating a company.

The advantages of the EI are clear:

• There is no capital requirement to contribute.

• No separate legal entity needs to be created.

• Personal assets are protected by default.

However, the EI also has significant disadvantages:

• It offers less credibility when seeking to raise funds or hire employees.

• It does not allow for delegated governance.

• It provides no possibility of transferring shares, adjusting voting rights, or similar operations.

In short, the EI is ideal for a simple activity, such as coaching, craft work, or liberal professions. But for a more ambitious or structured project, the SASU remains a stronger and more scalable option.

Does the French SAS have equivalents abroad with which it can be compared?

While the SAS is a uniquely French creation, it is not without points of comparison abroad. Many countries have developed legal forms that share certain features with the SAS, whether in terms of flexibility, governance, or investor-friendliness. Looking at these equivalents helps to better understand how the SAS positions itself in the international landscape of company law.

• Germany and the Netherlands

Several foreign corporate forms can be compared to the SAS: the GmbH and the kleine AG in Germany, the BV and the Flex-BV in the Netherlands, the LLC in the United States, and even the British Limited Partnerships.

When comparing their characteristics, the SAS stands out for offering a higher level of statutory freedom, particularly regarding the organization of management bodies, decision-making between shareholders, and the structuring of shareholders’ rights.

Whereas a GmbH or a BV impose relatively standardized mechanisms, the SAS allows for tailor-made articles of association: a sole president, a strategic committee, preference shares, or even veto rights.

• United States

In the United States, Delaware is considered the most attractive state in which to incorporate a company, thanks to its rich case law, its specialized courts, and its policies favorable to directors and investors.

The SAS does not yet enjoy this level of international attractiveness. However, its freedom of organization, its ability to accommodate investments, and its flexibility in shareholder agreements make it a powerful competitive tool in Europe.

• European Union

For several years, the European Union has sought to harmonize or create common corporate forms, such as the European Company (SE) or the (abandoned) project of the European Private Company (SPE).

The SAS largely inspired these initiatives. The SPE project, launched in 2008, aimed to provide SMEs with a flexible European status based on statutory freedom. Unfortunately, this project was abandoned in 2014.

Today, the SE exists but remains little used (fewer than 200 in France in 2022). Its high minimum capital requirement and rigid formalities limit its attractiveness. By comparison, the SAS offers much greater simplicity for SMEs.

Is the SAS always the right choice?

Not necessarily. However, in the majority of cases, the SAS stands out because of:

• Its flexible governance,

• Its ability to structure projects involving several shareholders,

• Its compatibility with growth, transfer, or investment strategies.

It represents a genuine alternative to the rigid “ready-to-wear” model of the SA or the SARL, offering instead a tailor-made framework designed to evolve.