SAS vs SARL in France – Key Differences and Best Use Cases

France remains one of the most attractive destinations for entrepreneurs and investors looking to establish a European presence . With its large consumer market, strong infrastructure, and position as a gateway to the EU, France offers countless opportunities for business growth. However, choosing the right legal structure is crucial. The two most common forms of incorporation are SAS (Société par Actions Simplifiée) and SARL (Société à Responsabilité Limitée). Both structures come with unique benefits, limitations, and ideal use cases. In this article, we explore SAS vs SARL, their features, key differences, and practical examples of when to use each. 

Understanding SAS (Société par Actions Simplifiée) 

A SAS is a simplified joint-stock company that offers high flexibility in governance. It has become the go-to choice for startups and innovative companies looking for adaptable structures. 

Key Features of SAS

• Requires at least one shareholder and one president. 
• Flexible shareholder agreements and governance models. 
• Shareholders’ liability is limited to their contributions. 
• Can issue shares and attract investors more easily. 
• No restriction on the maximum number of shareholders. 

Who is SAS suitable for? 

• Startups seeking flexibility in management. 
• Investor-backed companies needing freedom to structure shareholder rights. 
• Businesses planning to raise funds through share issues. 

Understanding SARL (Société à Responsabilité Limitée) 

A SARL is a limited liability company with a more structured legal framework. It is one of the most traditional company types in France, preferred by small to medium-sized businesses. 

Key Features of SARL

• Requires between 2 and 100 shareholders (though can be a single-member “EURL”). 
• Stricter rules around governance and decision-making. 
• Shareholders’ liability is limited to their contributions. 
• One or more appointed managers handle management. 
• Perceived as stable and secure, especially in family-run businesses. 

Who is SARL suitable for? 

• Family-owned businesses. 
• Small and medium enterprises (SMEs). 
• Businesses prioritise structure and legal clarity. 

Key Differences Between SAS and SARL 

Here’s a side-by-side look at the SAS vs SARL differences

 Advantages of Choosing SAS 

• Customizable governance – Shareholder agreements can be tailored to specific needs. 
• Attractive to investors – Easier to raise capital through shares. 
• Flexibility in management – Fewer restrictions on structure and decision-making. 
• Modern appeal –  Especially suitable for startups and high-growth businesses. 

Advantages of Choosing SARL 

• Clear legal framework –  Provides structure and legal protection for all parties. 
• Popular with SMEs – Especially trusted for family-run or traditional businesses. 
• Lower setup costs –  Generally less expensive to establish compared to SAS. 
• Stable reputation – Often seen as a secure choice for long-term operations. 

Challenges of Each Structure 

SAS Challenges

• Higher setup and administrative costs. 
• Requires careful drafting of bylaws to avoid governance issues. 

SARL Challenges

• Limited flexibility in shareholder agreements. 
• Less appealing to investors due to restrictions on shares. 

Use Cases – When to Choose SAS vs SARL 

SAS is ideal for

• Startups in technology or innovation. 
• Businesses seeking venture capital or private equity. 
• Companies wanting adaptable governance. 

SARL is ideal for

• Family-owned businesses with a small number of shareholders. 
• SMEs looking for stability and a clear framework. 
• Service providers and local businesses not planning to raise significant capital. 

Recommendation

• Choose SAS if you need flexibility, investor appeal, or long-term growth potential. 
• Choose SARL if you prioritise structure, simplicity, and a safe, traditional setup. 

Step-by-Step Formation Overview 

Forming an SAS in France 

1. Draft the Articles of Association. 
2. Appoint at least one president. 
3. Deposit share capital (minimum €1, though higher recommended). 
4. Register with the French Commercial Court (Greffe du Tribunal de Commerce). 
5. Obtain a SIREN number from INSEE. 

Forming a SARL in France 

1. Draft and notarize the Articles of Association. 
2. Appoint one or more managers. 
3. Deposit minimum capital (€1, but usually more for credibility). 
4. Register with the French Commercial Court. 
5. Obtain a SIREN number and complete tax registration. 

How OAEC Can Help? 

At Open a European Company (OAEC), we simplify the process of choosing between SAS vs SARL and guide you through every step of incorporation. Our services include: 

• Advisory on selecting the proper structure for your goals. 
• Drafting and filing Articles of Association. 
• Full incorporation support with the French authorities. 
• Ongoing services include registered office, accounting, HR, and compliance. 

With our expertise, you can focus on growing your business while we handle the complexities of French company law. 

Conclusion 

The choice between SAS vs SARL in France depends on your business objectives. SAS offers flexibility and investor appeal, making it ideal for startups and growth-focused companies. SARL provides structure and security, suited for SMEs and family businesses. Whichever structure you choose, the key is to align it with your long-term strategy. With expert support from OAEC, you can make the right choice and launch your business in France confidently. 

The post SAS vs SARL in France – Key Differences and Best Use Cases appeared first on Open a European Company.