EURL: the sole shareholder

Are you an entrepreneur looking to start your own business? Why not consider an EURL?

An EURL, or Single-Member Limited Liability Company, is a type of business entity managed by a single owner

This entity has a number of features, such as the limitation of the sole member’s liability to the amount of their capital contributions.

But what about the rights and obligations of the sole owner of an EURL? To shed some light on this issue, today we’re taking a closer look at the sole owner of an EURL!

The Liability and Rights of the Sole Member in an EURL

Because he is the sole partner, he has a number of specific rights:

• Decisions are made solely by the sole partner. However, these decisions must be recorded in writing. 
• The sole member of an EURL also enjoys the same rights as the members of an SARL. These rights are particularly relevant in cases where the sole member is not also the manager of the company.

They correspond to: 

• A right to information that requires the manager to notify the sole partner prior to any decision, as well as an ongoing right to information.
• Provisions regarding finances stipulate that the sole partner is entitled to all distributed dividends. The sole partner also decides on the amount to be distributed. These dividends must be paid within nine months of the end of the fiscal year.
• A right to bring legal action allowing a partner to act on behalf of the company if the manager’s liability is in question.
• Furthermore, in the event of the company’s liquidation, the sole shareholder may receive a full refund of their capital contribution if, and only if, funds remain available after the assets have been realized and the liabilities have been settled.
• Finally, a sole proprietor may make contributions to a shareholder’s checking account, allowing them to advance funds to their business without running the risk of increasing the company’s capital. These advances are also recoverable. It should be noted, however, that the terms of the shareholder’s checking account must be specified in advance in the articles of incorporation or through a separate agreement.

As mentioned earlier, the sole partner’s liability is limited to the amount of his or her capital contributions

This means that his creditors cannot sue him for his personal assets.

It should be noted, however, that if the sole partner also serves as the president or manager and is found to be responsible for any misconduct, the latter’s liability may be extended.

The obligations of the sole member of an EURL

It should be noted that the sole member of an EURL is required to make the capital contributions to which they committed at the time the company was formed.

The latter is also required to comply with all the provisions set forth in the articles of incorporation.

The Powers of the Sole Partner

Like the partners in a limited liability company (LLC), the owner makes decisions unilaterally while complying with all the procedural rules set forth in the articles of incorporation.

Under no circumstances may a partner in an EURL delegate their powers, even to their spouse

It should be noted that the sole partner may also make any changes, whether statutory or not, provided that the decision is recorded in writing.

Nevertheless, when it comes to amendments to the articles of incorporation, certain requirements must be met:

• The publication of this amendment in a JAL (Journal of Legal Notices)
• Filing this amendment with the court clerk's office
• And, if applicable, registration with the tax authorities

In conclusion, it is important to be aware of all the rights and obligations that apply to the sole owner of an EURL before taking the plunge.

Note that, as mentioned earlier, the sole partner may also serve as the manager!