Corporate law and legal forms in France: what you need to know in a nutshell
The main forms of capital-based companies are Limited Liability Companies (S.A.R.L.), Simplified Incorporated Companies (S.A.S.), and Incorporated Companies (S.A). The choice between these three solutions will depend on strategic and managerial considerations. An SARL is chosen (i) if the capital is meant not to change hands and (ii) if all or a majority of the partners are likewise the directors of the company. If any of these conditions is not met, then one should choose between an S.A.S or S.A.
The choice between an SAS or an SA is linked to the capital structure. An SAS is recommended when there is only one shareholder or if the shareholders all share the same goals. It is generally managed by a chairman, who may be assisted by general managers or CEOs. An SAS does not have a minimum capital requirement. This legal form is particularly recommended for affiliates of foreign groups.
An SA is suitable whenever the shareholders do not all share the same goals (for instance in joint ventures) or for companies carrying out regulated activities (banks and insurance companies). The minimum capital of an SA is €37,500.
An SARL and an SAS must appoint an auditor (CAC) whenever they fulfill certain criteria. All affiliates of foreign groups are under the obligation, in fact, of appointing a statutory auditor (CAC).
On the other hand, an SA must always appoint a chartered accountant (CAC)
Whatever the type of company, the chartered accountant (CAC) is appointed for a term of 6 years (Also see accounting regulations).
Comparison ol legal forms between the US, the UK, Germany
Here is a table of company forms equivalence existing in France and others in the USA, UK and Germany. Equivalence does not mean that these types of companies are absolutely the same. Moreover, it is difficult to detail all of them. Therefore, we have put forward the major differences between the French company forms and their foreign counterparts.
Need more information?