Advantages and disadvantages of SAS (Simplified Joint Stock Company)
The Société par Actions Simplifiée (SAS) is a modern, flexible legal form offering great freedom of organization and operation. Autonomous from the Société Anonyme (SA), it is ideal for entrepreneurs seeking an adaptable legal framework.
Discover the advantages and disadvantages of SAS to better understand whether this status is right for you.
The advantages of SAS
1. A structure accessible to all
SAS can be set up by one or more individuals or legal entities. It can be used for both individual (SASU) and collaborative projects, offering great flexibility.
2. Organizational freedom
SAS associates enjoy considerable autonomy in defining the company’s operating rules. With the exception of the appointment of a Chairman, the internal structure is entirely flexible (creation of boards, committees, etc.).
3. The ability to create share categories
The SAS makes it possible to create different classes of shares (priority dividend shares, non-voting shares, shares with multiple voting rights, etc.), offering unique flexibility for structuring the shareholder base according to the partners’ needs.
4. A flexible tax system
By default, an SAS is subject tocorporate income tax (Impôt sur les Sociétés – IS). However, under certain conditions, it can temporarily opt to payincome tax (Impôt sur le Revenu – IR), enabling associates to adapt the tax system to their objectives.
5. An advantageous social status for managers
SAS directors are considered to be assimilated employees. They benefit from the social protection of the general regime, with no minimum contributions in the absence of remuneration.
6. Dividends not subject to social security contributions
Dividends received by managing partners are not subject to social security contributions, whatever their amount, unlike those received by SARL majority managers.
7. Advantageous tax treatment of share sales
Registration fees for the sale of SAS shares are set at just 0.10%, a much lower rate than for SARL shares.
The disadvantages of SAS
1. Weak regulation: a double-edged sword
The freedom of organization offered by the SAS makes the drafting of articles of association more complex. An error or omission in these documents can have major consequences for the company.
2. Complex administrative procedures
Creating an SAS requires a number of formalities (drafting the articles of association, blocking share capital, legal announcements, registration with the registry…), which are often costly and time-consuming.
3. High social security contributions
SAS directors who are assimilated employees pay higher social security contributions (around 75% of net income) than non-salaried workers (45% for SARL majority managers).
4. Inadmissibility of a public offering
Unlike Sociétés Anonymes (SA), SAS companies cannot be listed on the stock exchange, thus limiting their financing possibilities via public offerings.
SAS: A status to be studied in detail
The SAS offers undeniable advantages in terms of flexibility and social and tax optimization, but it requires careful thought before being chosen.
Alternatives to SAS
Other legal forms can also meet your needs:
- SARL: A more regulated structure, ideal for projects requiring strict regulations.
- SA: A purely capital-oriented company, suitable for large companies and projects requiring substantial financing.
- SNC or limited partnership: Articles of association tailored to specific situations.
Our lawyers and business start-up experts
Nadia TRIAL
LegalSébastien JONQUIERE
Associate chartered accountant
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