An SAS (Société par actions simplifiées - simplified joint-stock company) is a commercial company whose legal status is becoming increasingly attractive to entrepreneurs. It is run by a number of partners, both individuals and corporate entities.
It can be set up as a single-person company, known as a SASU. Its minimum capital is set at €37,000, and this type of company may not issue shares to the public.
The wording of the articles of association remains relatively free, and the organizational rules are freely determined by the partners. It is important to remember that associates' liability is limited to the amount of their contributions.
In most cases, the SAS is taxed at IS (Impôt sur les sociétés) after deduction of directors' remuneration.
Most importantly, it can appoint an external auditor to guarantee the accounting and financial transparency of its accounts. Since the passage of the loi PACTE in spring 2019, the thresholds for their appointment have been modified. And this is no insignificant change!
Let's find out what will change for your SAS in your relationship with your statutory auditor.
The statutory auditor is a legal, external auditor who verifies the sincerity and conformity of the company's financial data with current standards.
It intervenes at least once a year, when the annual financial statements are filed, and carries out a wide-ranging statutory audit. Its scope of intervention is largely defined by law.
In a SAS, its role is very important, particularly when it comes to accounting for items relating to the life of the company, such as capital increases, or ensuring equality between partners when it comes to dividend payments.
However, it must not influence the management or operation of the company.
In the case of small SASs, the statutory auditors are required to comply with "professional standards of practice", which include specific due diligence requirements.
The answer is no, but it depends on the case!
The PACTE Act has rightly modified the thresholds governing the appointment of chartered accountants. From now on, it is compulsory to have one if at least two of the following three thresholds are met:
- If balance sheet total exceeds 1 million euros
- If net sales exceed 2 million euros
- If the number of employees exceeds 20
If this is the case, you are required to appoint a statutory auditor at the close of the relevant financial year. Appointed for a term of six financial years, he or she cannot be dismissed, even if the thresholds are not always crossed.
Other conditions may make the appointment of a statutory auditor mandatory:
- If the SAS controls or is controlled by another company, it must appoint two statutory auditors, one of whom is a full member of the Board, the other a deputy.
- If the associates so decide at a General Meeting
- If one or more associates representing at least 10% of the share capital decide to take legal action to request this.
All these conditions also apply to SASU.
Failure to appoint a statutory auditor in an SAS is punishable by two years' imprisonment and a €30,000 fine.
The tax authorities pay particular attention to the sound management of companies, as their failure to do so represents a risk not only for themselves, but also for their suppliers and customers.
Companies that fail to comply with the conditions of appointment are also liable to penalties.
We remind you that the statutory auditor must be appointed unanimously by the SAS shareholders at the Extraordinary General Meeting.
In the absence of unanimity, the legal representative may file a petition with the President of the competent Commercial Court.
You now have all the information you need to decide whether or not to appoint a statutory auditor to your SAS.
Now the hard part begins: which professional to choose? Before making your choice, take the time to inform yourself and consult several reviews to avoid unpleasant surprises.
Written by our expert Paul LASBARRERES-CANDAU
June 27, 2019
