SARL the complete guide!

A SARL is a very popular and versatile legal status, as it can be adapted to a wide range of business projects.

Inexpensive, practical and comfortable, the advantages of the SARL are numerous and explain its popularity: 36% of companies created in 2018 adopted this status. SARLs can also be set up as single-person companies (with a single shareholder), known asEURLs.

In other words, this is the simplest form of company, run by a day-to-day manager and an annual general meeting attended by all associates. To set it up, at least 2 partners are required, with a minimum share capital of €1.

Find out everything you need to know to create your SARL in 2019!

Why set up a SARL?

The first advantage is undoubtedly that partners' liability is limited to the amount of their capital contributions to the company. In other words, your personal assets are protected.

In the event of financial difficulties, only your share capital and contributions can be used to settle your debts, except in the case of mismanagement.

Secondly, SARLs are much simpler to manage than SAs, SASs or SASUs.

Administrative formalities are simplified, and you can choose your tax regime.

Why choose a SARL over a SAS?

The two types of company are very similar, and there are no differences on the following points: the wording of the articles of association, the status of associates, the company's lifespan, the scope of activities that can be carried out, share capital contributions andtaxation. The formalities involved in setting up a company are virtually identical.

However, contributions made by a partner married under the community regime using a common asset are more strictly regulated in SARL than in SAS. The agreement of the spouse is required.

The share capital is divided into several classes of shares in SAS companies, and into shares in SARL companies.

The SARL is managed by one or more managers, while the SAS is headed by a chairman.

Lastly, SAS managers are affiliated to the general social security scheme, whereas SARL managers contribute to the social security scheme for self-employed workers.

How much does it cost to set up a limited liability company?

If you're running a commercial business, you'll need to take into account the publication of a legal notice in an approved newspaper (approx. €200), registration in the Trade and Companies Register (approx. €45), registration in the Register of Beneficial Owners (approx. €25) and the start-up preparation course (soon to be optional - approx. €250), for a total of approx. €520.

If you run your own business, you'll need to pay for publication of a legal notice in an approved newspaper (approx. €200), registration in the Trade Register (approx. €230), registration in the Register of Beneficial Own ers (approx. €25) and a start-up training course (soon to be optional - approx. €250), for a total of approx. €705.

How long does it take to set up your SARL?

To set up a SARL, you first need to draw up the articles of association, then place a legal notice in an approved newspaper, and deposit the blocked capital with your bank.

Once all the supporting documents have been gathered, you can complete the official CERFA form and submit your file to the clerk's office of the relevant commercial court (depending on the location of the SARL).

He will process your request within approximately 3 weeks.

Which tax system should I choose?

You can choose between two tax systems:

• Corporation tax. In this case, the SARL is taxed directly on the basis of its profits. Managers and partners may pay dividends to each other, which will be taxed in their own names. This is the default tax regime for SARLs.
• Income tax (impôt sur le revenu) may be elected for a maximum period of 5 years. In this case, the partners include the company's income in their tax return. This option is highly disadvantageous if you are already taxed in a high bracket.

How are you remunerated?

The SARL manager is remunerated by virtue of a decision taken at a general meeting of shareholders. They receive a fixed or variable salary, corresponding to a percentage of EBITDA for example. They may also receivebenefits in kind.

Associates can pay themselves dividends when distributable profits are recorded at the end of the year.

What is the social security system for the manager of a SARL?

If the manager is a majority shareholder (i.e. holds more than 50% of the SARL's capital), he or she is covered by the social security system for self-employed workers.

If you are a minority or equal shareholder, you are treated as an employee and are covered by the general Social Security scheme. They enjoy the same rights as an employee.

What assistance are you entitled to when setting up your SARL?

The manager of a SARL can take advantage of ACRE (Aide aux Créateurs et aux Repreneurs d'Entreprises) to benefit from a 12-month exemption from social security contributions .

He can also receive a lump-sum payment of part of his remaining ARCE entitlement.

Finally, check with your local authorities (mainly your city and region), as there are often support schemes in place for entrepreneurs, in the form of interest-free loans, guarantees or advice to optimize the success of your project.