The legal form of SAS, or Société par Actions Simplifiée, is undoubtedly the type of company best suited to the needs of today's start-up entrepreneurs.
In particular, it's the legal flexibility available to founders in the running and management of their business that makes it a truly attractive legal status.
Flexibility in management and control, definition of the number of partners, etc.
These are just some of the benefits that continue to attract start-up founders.
Today, we focus on the reasons to choose the SAS to create a start-up!
To begin with, it's worth highlighting the flexible conditions that characterize the creation of an SAS and , which are a real advantage for a start-up.
This flexibility can be seen in a number of ways:
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Number of partners: to set up a SAS, you need at least 2 partners, although technically one partner may be enough: this is known as a SASU. The law does not specify a maximum number. The same applies to the nature of the associates, who can be either natural persons or legal entities.
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In terms of share capital: there is no legal minimum. Share capital can be made up of cash contributions, or contributions in kind. It is also possible to mobilize " industrial" contributions, when certain participants have specific skills.
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Appointment of a statutory auditor: last but not least, the appointment of a statutory auditor is by no means mandatory, unless the start-up is controlled by a legal entity.
It is important to note that, in principle, the share capital of a Société par Actions Simplifiée is divided into a multiplicity of shares belonging to the same category, the "ordinary" category, with identical rights attached, such as voting rights, certain financial rights...
However, it is possible for associates to opt for another solution.
The latter may decide to create other classes of shares, called "preference shares", to which specific rights will be attached.
These preference actions can be of several types, depending on the benefits they provide:
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Patrimonial advantages for preference shares: a first type of preference share can give a partner the opportunity to obtain a larger share of profits than partners holding only ordinary shares. These employer advantages can also take the form of "priority redemption rights for certain preference shares", or privileged rights to "liquidation surpluses", etc.
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Extra-patrimonial advantages for preference shares: itis possible for certain preference shares to be created without attached voting rights. This means that the holder of such shares is not entitled to vote at shareholders' meetings. It should be noted that this type of share cannot represent more than half of the start-up's share capital. The reverse is also possible. In fact, this type of share can give access to a much higher voting right than that available to ordinary shares.
- It is important to note that other benefits may accompany preference shares. These include an enhanced right to information, or a right of representation on certain company management bodies.
We need to look at the governance system of an SAS.
First and foremost, it is essential to appoint a Chairman.
From this point onwards, it is possible to develop a certain number of management and control bodies within the start-up, according to these needs.
The following can be named
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A general manager and, if necessary, deputy general managers
- A Board of Directors
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Various committees, each with its own role
This means that the flexibility to create your own SAS governance system is central to the way start-ups operate. So you can build a governance system that's just right for you!
Finally, it's important to talk about the entry and exit of associates in SAS.
The latter are completely free, as no provision of the French Commercial Code sets a framework for them.
This role then falls to the founders, who must set out how it is to operate directly in the company's articles of association.
If necessary, an approval procedure can be set up to define operating procedures or a possible right of pre-emption.
Finally, it is also possible to include a "joint exit" procedure in the Articles of Association, enabling minority shareholders to leave the SAS in the event of a change of control.
In conclusion, it's true that the flexibility that characterizes the SAS tends to appeal to many young entrepreneurs! A very popular status among start-ups.
Written by our expert Quentin Moyon
June 25, 2018
