SARL

The SARL is France’s traditional private limited company (the equivalent of the US LLC or UK Ltd) among small entrepreneurs and small and medium-sized businesses because of its low capital requirements and ease of incorporation.

The SARL has a hybrid capital company/partnership quality in that it limits the partners’ liability while firmly preserving each’s rights. The Commercial Code prescribes this legal form, so its functioning is highly regulated by law.

A SARL mandates equitable distribution of powers among its partners. For example, voting rights are proportional to the amount of share capital allocated to each investor/owner, and important decisions require explicit approval by all.

A SARL requires at least two people to incorporate, including one director who must be a “natural person” – meaning, not a legal entity – and at least one partner. It allows up to 100 shareholder-partners, and only one class of stock can be issued.

The manager of the SARL acts and represents the company in dealing with third parties. The company’s bylaws are established in the articles of incorporation. An annual shareholders meeting is required to approve the accounts and fiscal disclosures.

SARL is levied on corporate income but can opt to be taxed on the partners’ personal income. No residency requirements exist for the partners and directors of the SARL. 

Europe Incorporations will advise, as needed, on the functioning of the SARL and the applicable social and fiscal regime’s implication for your business.