Setting up a business requires a number of administrative and legal steps, including the choice of legal status or form. To clarify the subtleties inherent in each of these statuses, we have selected the information you need to make the right decision.
Make the right choice for your business!
Individual companies
The EIRL status is suitable for craftsmen, shopkeepers and self-employed people working in the agricultural and/or liberal professions. The EIRL offers a significant advantage in terms of asset protection: entrepreneurs operating under the EIRL system do not commit their personal assets to the same extent as the company's capital.
EURL status is ideal for entrepreneurs wishing to expand their business rapidly. A company with EURL status can easily be converted to SARL status with the contribution of one or more new partners. The EURL also limits the manager's liability to his or her own assets (except for civil and criminal liability in the event of mismanagement). Like the EIRL, the EURL is ideally suited to the self-employed.
See our complete guide to EURLs: advantages and disadvantages!
The companies
The Société Anonyme (SA) status is characterized by the sole consideration of the capital and not the identity of the partners. As a result, shareholders enjoy a high level of protection for their personal assets (except in the event of mismanagement). It is a legal form suited to large-scale projects, as it is relatively complex and requires a minimum share capital of €37,000. A minimum of 7 shareholders is required to create a listed SA, and 2 shareholders if the company is not listed. However, there is no limit to the maximum number of shareholders.
The SARL is the most common legal form, thanks to its simplicity of operation. SARLs are suitable for all business sectors, provided they have between 2 and 100 partners. A single-partner SARL is known as an EURL. The liability of each partner is limited to the amount of their respective contributions in kind, in industry or in cash. The share capital is freely defined in the articles of association, with no minimum capital requirement.
See our article on SARL incorporation formalities!
The Société par Actions Simplifiée (SAS) is the most suitable legal status for an SME or start-up. An SAS can be run by a single shareholder, in which case the company is known as a SASU (Société par Actions Simplifiée Unipersonnelle). Decisions are made by the designated chairman and other officers, with no legal constraints. Partners' liability is limited to their capital contributions.
See our complete guide to SASU: incorporation formalities!
Written by our expert Simon Segura
May 23, 2017
