SARL vs SAS: Which French Company Form Should You Choose?

SARL vs SAS: the short answer

The SARL (société à responsabilité limitée) and the SAS (société par actions simplifiée) are the two forms on which almost all new French companies are built, and they share more than founders expect: 

• in both, shareholder liability is capped at the contributions; 
• in both, the capital is set freely in the articles; both are barred from offering securities to the public; and 
• both pay corporate income tax by default, with the same reduced-rate and option mechanics. 

What separates them runs along two independent lines. 

The first is structural: the SARL obeys a body of mandatory rules written into statute, while the SAS is governed by whatever its founders write into the articles — and from that split flow how shares move, what a transfer costs, who can be the director, and how decisions are taken. 

The second is the director's social status, which turns not on the articles but on a rule of social-security law: a SARL's majority gérant is self-employed, while an SAS président is an employee-equivalent whatever his stake — with direct consequences for social charges and for the treatment of dividends. 

Most of the SARL vs SAS decision comes down to these two lines.

Neither form wins in the abstract. The SAS's contractual freedom should appeal to many an SME director, as the classic treatment itself concedes — but freedom must be drafted, clause by clause, and the SARL's fixed framework is precisely what protects partners who do not want to negotiate their own company law. 

This guide runs the comparison the way the decision actually gets made: governance, the director's status and charges, capital and shares, transfers, tax, and the conversion question.

Governance: a statutory frame against contractual freedom

The SARL: a statutory frame. A SARL is run by one or more managers (gérants), who must be natural persons — never a company. Around them, the law fixes the operating system, and none of it can be drafted away:

• Decisions are taken by general meeting, by written consultation where the articles allow it, or by a unanimous decision in a signed deed — but approving the annual accounts always requires a real meeting, from which videoconference participation is excluded.
• Removing a gérant takes shareholders holding more than half the shares on the first consultation, a relative majority on the second unless the articles demand more; removal without just cause opens the door to damages.
• Agreements with a gérant or shareholder run through the regulated-agreements machinery (C. com. art. L 223-19): an after-the-fact report by the gérant or auditor, presented to the shareholders. Where a non-shareholder gérant contracts with a company that has no auditor, the meeting must authorise the agreement in advance.
• Routine operations at normal conditions escape the procedure.

The SAS: the reverse logic. The SAS inverts this. One organ is mandatory — a president, who may be a natural person or a legal entity — and nearly everything else belongs to the articles:

• The founders decide the structure: they may create general managers and deputy general managers exercising the president's powers, install committees of their choosing, and fix how and by whom decisions are taken.
• The decision modes are open: meeting, written consultation, unanimous deed, videoconference, or even an informal gathering — including for the annual accounts, which the SARL reserves to a formal meeting.
• Removing the president is free or for just cause, with or without indemnity, at simple or reinforced majority — whatever the articles say.
• Related-party agreements are covered by an after-the-fact report from the auditor or, failing one, the president, targeting agreements with the president, other executives, shareholders above 10% of voting rights, or their controlling company (C. com. art. L 227-10); routine operations at normal conditions again escape entirely.
• The articles set the rest: a quorum exists only if they created one, a veto right can be given to one or more shareholders, and clauses restricting shareholders' rights can only be adopted or amended unanimously.

The director's status and social charges: where SARL vs SAS is usually decided

For owner-managers, this is the commercially decisive difference.

In a SARL, the gérant's status follows the shareholding.

• A majority gérant — one who, alone or through a management board, and counting the shares of his spouse, PACS partner and unemancipated minor children, holds more than half the capital — is affiliated to the self-employed scheme, and contributes even when he draws no remuneration.
• A minority or equal gérant who takes pay is an employee-equivalent under the general scheme.
• The two regimes price and protect differently: the self-employed scheme's core benefits are broadly aligned on the employee scheme, but it carries no workplace-accident cover unless voluntarily insured, and no AGIRC-ARRCO supplementary pension — which the minority or equal gérant does build.

In an SAS, none of this applies. The majority/minority distinction has no place in it: for social security the president is treated like the chief executive of an SA — an employee-equivalent whatever his stake — and even the sole shareholder of a single-member SAS belongs to the employee scheme. Two consequences follow:

• On dividends: a majority SARL gérant's self-employed contributions bite on the fraction of dividends — his own, and those of his spouse, PACS partner and minor children — above 10% of the share capital, premiums and shareholder-loan-account sums. The employee-equivalent's contributions are built on the mandate pay alone, dividends excluded. So a distributing company is charged on its majority gérant's dividends in the SARL, but not on its president's in the SAS.
• On unemployment: neither the gérant nor the president gets employee unemployment cover from the mandate itself. That opens only through a genuine employment contract for distinct duties — possible for a minority gérant, difficult for an equal one, impossible for a majority gérant, and possible for an individual SAS president who meets the criteria.

Neither route is simply cheaper. The self-employed route usually costs less in contributions for the same envelope and leaves the difference to fund optional cover; the employee-equivalent route costs more and builds fuller rights. Choosing between the forms on this ground means modelling your own salary-and-dividend mix — a calculation that belongs before incorporation, not after.

Capital, contributions and the securities each form issues

On capital, the two forms start level: neither has a legal minimum, both fix the amount freely in the articles, and both allow variable capital — which the SA prohibits. 

The paying-up rules then split, and getting them wrong is a classic incorporation error:

• Cash contributions must be paid up by at least one-fifth at formation in a SARL, and by at least one-half in an SAS — with the balance falling due within five years in both cases.
• Contributions in kind follow the same discipline in both forms: a contribution auditor is mandatory where any single asset exceeds €30,000, or where the total of in-kind contributions exceeds half the capital.
• Contributions of skill and work are open to both — remunerated by special shares in the SARL and by inalienable shares in the SAS — whereas the SA refuses them altogether.

The real divergence is the nature of the securities: 

• the SARL issues parts sociales, non-negotiable shares that can move only by written deed; 
• the SAS issues actions, negotiable securities transmitted by a simple account-to-account transfer. 

Neither form may offer its securities to the public, but the SAS may raise money from a restricted circle of investors, from qualified investors, and through regulated crowdfunding — channels the SARL does not have. 

On headcount, the SARL runs from one to a hundred shareholders, while the SAS runs from one to no limit unless its articles restrict it.

Transferring shares: consent and a deed against negotiable securities

The transfer mechanics carry the character of each form.

In a SARL, a transfer to an outside third party needs the consent of more than half of the shareholders representing at least half of the shares, and the articles can only make that requirement stronger. The transfer itself requires a written deed, which is:

• made enforceable against the company by depositing the original at the registered office against the gérant's certificate, or by formal service (C. civ. art. 1690);
• made enforceable against third parties by filing the amended articles at the registry.

Transfers between shareholders, and to a spouse, ascendant or descendant, are free in principle unless the articles restrict them. The tax cost is a 3% duty, computed after an allowance of €23,000 spread across the total number of shares (CGI art. 726).

In an SAS, transfers are free by default and move by a simple account entry — the only constraints are the ones the founders chose to draft. These can include:

• an approval clause, whether general or limited to certain shareholders;
• a pre-emption mechanism;
• inalienability of the shares for up to 10 years;
• exclusion of a shareholder, with a forced sale on the terms provided;
• suspension of voting rights, or exclusion of a corporate shareholder whose control changes.

Approval can be given by the shareholders or by the president, as the articles decide, and the duty is a flat 0.1%. 

For deals that need shares to move — investors in, founders out, incentives around — that difference in mechanics and in cost is usually decisive on its own, and the corporate form which is chosen is generally that of the SAS.

Taxation: level at the company, split at the owner

Taxation: level at the company, split at the owner

At entity level the comparison is short. Both forms pay corporate income tax by default, and on the same terms:

• the rate is 25%, reduced to 15% on the first tranche of profit within the SME limits;
• the 3.3% social contribution on IS applies only to larger companies — those whose turnover reaches €7.63 million and whose corporate tax exceeds €763,000;
• both can leave IS for personal income tax through the same five-year option, open to companies under five years old, at least 50% held by individuals (with the manager and his tax household holding at least 34%), adopted unanimously and valid for five financial years (CGI art. 239 bis AB).

At the owner's level the distribution is taxed identically in the two forms as a starting point. A dividend bears the flat tax — 12.8% income tax plus social levies — unless the shareholder opts for the progressive scale. Note the rate has moved: the social levies rose from 17.2% to 18.6% for income received from 1 January 2026, so the flat tax is now 31.4% rather than the former 30% (dividends paid in 2025 keep the 30% rate).

Two differences then remain, and each favours a particular profile rather than a form in the abstract:

• The family SARL runs in the SARL's favour. A SARL whose shareholders all belong to the same family can opt for the partnership tax regime on a lasting basis (CGI art. 239 bis AA) — an option the SAS has no equivalent for, and a real advantage for a business meant to stay in the family.
• The dividend charge runs the other way. A majority SARL gérant's dividends above the 10% threshold are subject to self-employed contributions on top of the dividend tax (C. séc. soc. art. L 136-3) — a cost the SAS président never meets, since his dividends stay outside the contribution base.

The practical consequence is that a profitable, distributing, owner-managed company prices the two forms differently every year. The comparison has to be run on your own projected figures, not on the headline rate table.

Auditor thresholds and the annual accounts: mostly common ground

The statutory-auditor rules are now identical across the forms for financial years opened from 1 January 2024 (C. com. art. L 223-35, L 225-218 and L 227-9-1). Appointment becomes mandatory where the company crosses two of three thresholds — a €5 million balance-sheet total, €10 million turnover, or 50 employees — and the same figures apply whichever form the company takes. Beyond that base rule:

• within a group, the head must appoint an auditor where the group as a whole crosses those thresholds, and a subsidiary must appoint one where the group head is itself obliged and the subsidiary crosses €2.5 million of balance sheet, €5 million of turnover, or 25 employees;
• on shareholder demand, shareholders representing at least a third of the capital can force an appointment for three financial years by reasoned demand, while those holding more than 10% can seek a judicial appointment;
• voluntarily, an appointment is always open whatever the figures.

The accounts cycle diverges on the one point already flagged: the SARL must approve its annual accounts in a real general meeting, whereas the SAS approves them in whatever form its articles chose. Filing, by contrast, follows the same discipline for both — paper at the registry within one month of the decision (C. com. art. L 232-23), or electronically through the Guichet unique within two. The confidentiality options are also shared:

• full confidentiality for micro-enterprises;
• a confidential profit-and-loss account for small enterprises;
• a simplified balance-sheet presentation for medium ones.

Can you start as a SARL and convert to an SAS later?

Yes — and the majority rule is the point to know before you count on it: converting a SARL into an SAS is one of the decisions that require unanimity of the shareholders, alongside changing the company's nationality. In a two-founder company that is a formality; in a company with a broader circle, one dissenting shareholder blocks the route. A founder who expects to need the SAS's machinery within a few years should weigh that veto risk now — either by starting directly in the SAS, or by keeping the shareholder circle tight until the conversion is done. The transformation itself, its conditions and its consequences for the gérant, the tax position and the company's continuity are a subject of their own, treated in our dedicated guide to transforming a SARL into an SAS.

SARL vs SAS: the full comparison table

Frequently asked questions about SARL vs SAS

This guide states the rules applicable to the SARL and the SAS as most recently updated, including 2024 thresholds, rates and statistics; figures are revised regularly. It is general information, not legal or tax advice for your situation. Before choosing a form, converting, or transferring shares, take advice on the rules and figures in force at the date of your decision.