Company Formation Services

S.A.R.L. (Société à Responsabilité Limitée)

While France now offers a variety of limited liability legal formation structures, the SARL is the foundational private limited company (the equivalent of the US LLC or UK Ltd). The SARL is traditionally common among small entrepreneurs and small-medium-sized businesses because of its low capital requirements, quasi-partnership characteristics, and ease of incorporation.

In recent years, however, other private limited liability structures have emerged with some of the same advantages of the SARL but are much less restrictive.

The SARL requires at least two people to incorporate, including one director and at least one shareholder. The director must be a “natural person” – meaning, not a legal entity. It allows up to 100 shareholders and only one class of stock can be issued. The SARL does not trade on any stock market or any public exchange.

E.U.R.L. (Entreprise Unipersonnelle-Responsabilité Limitée)

The EURL is a single-person SARL – a sole-proprietorship SARL. A natural or legal person (entity) can incorporate an EURL. However, a natural person must be the manager.

Most other conditions of the SARL apply, except taxation and social regimes. With an EURL, taxes are levied on personal income, but it can opt to be taxed on corporate income at the time of incorporation. Sole proprietors of EURL fall into a different social regime and may also opt for applicable micro-taxation regimes.

S.A.S. (Société par Actions Simplifiée (Multi-PartnerJoint Stock Company)

The SAS is a limited liability simplified joint stock company formed by a minimum of two people – at least one director and one shareholder – with no limit on the maximum number of shareholders. The manager for SAS can be a natural or a legal person, and legal persons (companies) can be appointed directors to manage a SAS entity.

The SAS offers immense flexibility for its owners to design and define the entity’s operations to their requirements in the by-laws of the articles of incorporation. The shareholders freely establish the rights attached to their shares. The SAS may sell private shares but cannot make public offerings, so its shares cannot be listed on the stock market or any public exchange.

S.A.S.U. (Société par Actions Simplifiée Unipersonnelle – Sole Proprietor)

The SASU is a sole-proprietor (single owner-partner) SAS. It is a flexible entity popular with startups in recent years due to its customizable operation from A to Z. Unlike the SARL, whose operations are primarily prescribed by the commercial code, the established articles of incorporation drive the operations of the SASU. The owner-partner can be a natural or legal person.

Its articles of incorporation allow owners to freely define their rules: duration, capital modification, types of contributions, etc. The SASU also provides flexibility for operation with several partners in the event of an upgrade to a SAS later on. In a SASU, you are the sole entrepreneur, “the sole owner.” You will be the only one to contribute to the initial “share capital” and the only one to whom dividends are accrued.

While the SARL is France’s most well-known limited liability company, the SASU is the most popular legal form locally for single-owner business creators. In 2020, SASUs represented 67% of new companies created in France.