How to create your SAS? The complete guide

The Simplified Joint Stock Company (Société par Actions Simplifiée - SAS) is a legal status that is proving very popular with entrepreneurs.

In 2018, as in 2017, simplified joint stock companies (SAS) accounted for 61% of company creations. Their share was 56% in 2016 and 48% in 2015.

It can be adapted to a wide range of entrepreneurial projects, which is why it is today the preferred status for entrepreneurs and start-ups.

Why set up an SAS?

The advantages of SAS are twofold: flexibility and simplicity.

This dynamism is due to the simplicity of the formalities involved in creating, managing and dissolving an SAS. To create an SAS, you need a minimum share capital of €1, and at least two partners.

An SAS is headed by a Chairman, who may be a natural or legal person.

As a result, it has a solid internal organization and streamlined governance.

Why choose an SAS over a SARL?

The main differences between the two statuses are as follows:

• Contributions made by a partner married under a community property regime using joint assets are more strictly regulated in SARLs than in SASs.
• In SARLs, the share capital is divided into shares, and it is possible to create several classes of shares. In SAS, it is divided into shares of the same class.
• The SARL can be run by one or more managers, while the SAS is run by a Chairman.
• The Chairman of an SAS is covered by the "assimilés-salariés" regime. The manager of a SARL is automatically covered by the "Travailleurs Non Salariés" (TNS) scheme.
• From a tax point of view, SARLs and SASs are governed by the same rules, with the exception of family SARLs, which under certain conditions are taxed under income tax rather than corporation tax.

How much does it cost to set up an SAS?

Setting up an SAS costs next to nothing: you'll need to pay the statutory fees to the Registrar of the Commercial Court responsible for creating your company (these vary from region to region, and range from a few hundred euros).

Apart from installation costs (purchase of fixed assets, equipment, rental of premises, etc.), no additional costs are required.

How long does it take to set up an SAS?

To set up your SAS, you need to file an application with the Greffe du Tribunal de Commerce, which will issue a SIRET number, usually within 3-4 weeks. Your company will then be legally recognized, and you can start trading.

You also need to take into account the time required to draw up the articles of association, deposit the share capital with your bank, fill in the Cerfa M0 form and publish the legal announcement of the company's creation.

What's the difference between a Chairman and a CEO?

The Chairman of an SAS has full powers of internal management and representation vis-à-vis third parties.

The SAS may have a Chairman supported by a Managing Director, to whom he delegates some of his duties.

This structure allows for a more flexible distribution of management responsibilities, where the Managing Director can be assigned specific tasks, such as day-to-day management of the company, while the Chairman focuses on long-term strategies and external relations.

This configuration also facilitates a better distribution of workloads, and can enhance the company's ability to respond effectively to operational and strategic challenges.

Which tax system should I choose?

By default, an SAS is subject to corporate income tax (IS), which means that the company pays tax directly on its profits.

When dividends are distributed to the individual shareholder, he/she pays personal income tax. As an option, it is possible to opt forIR (Impôt sur le revenu) taxation when the SAS is created (valid for a maximum of 5 years).

How are you remunerated?

The director of an SAS may receive a salary, which must be declared as wages and salaries in the same way as an employee.

Remuneration arrangements will be set out in the Articles of Association.

What is the social security regime for SAS directors?

SAS directors have a special social status. They are considered to be self-employed, and are covered by the "assimilés-salariés" scheme, i.e. the general Social Security system.

They therefore benefit from the same social protection as salaried employees, with the exception of unemployment insurance.

What assistance are you entitled to when setting up an SAS?

A number of government grants are available to SAS founders:

• ACRE offers a conditional exemption from social security contributions.
• ARCE is the "Aide à la reprise ou à la création d'entreprise" (support for business start-ups), which entitles the entrepreneur to 45% of the amount of the balance of his or her benefits when the business is launched. A second payment is made six months after the first. A 3% deduction is applied to the capital sum.
• NACRE is a 3-year minimum support scheme to facilitate the creation or takeover of a business. A wide range of services are provided, from project set-up to structuring the financing plan, including operational advice on launching the business. It is even possible to obtain financing directly.

Is a shareholders' agreement mandatory when creating an SAS?

When you set up a company, you must draw up articles of association setting out the basic information. Drafting the articles of association is sufficient to create your company: you are under no obligation to conclude an SAS shareholders' agreement in addition to the articles of association.

However, it is often wise to draw one up. Its purpose is to preserve relations between associates (conditions of sale of shares, right to information, non-competition obligation, distribution of dividends, etc.).

Many entrepreneurs seek professional advice before making a decision.

The SAS offers many advantages for many projects, and often meets the expectations of many entrepreneurs.