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Understanding a SASU for French businesses
The SASU is the French name for the Simplified Joint Stock Company. Basically, it is a SAS, but with only one partner. The number of SASUs has been increasing as of late, because it has interesting characteristic for a business creator who wants to be alone in his business. In 2016, SASU accounted for 67% of new single-member companies.
- The one associate of the SASU
- Financial commitment
- How does the SASU function?
- The tax regime of the SASU
- The social regime of the president of a SASU
- Transferring a SASU
- Main advantages and disadvantages of the SASU
1- The one associate of the SASU
The SASU consists of a single partner who can be either a natural person (an individual) or a legal person (an entity representing several different individuals).
The sole partner makes the decisions alone in accordance with the formal rules laid down in the statutes.
2- Financial commitment
The volume of equity (share capital) is freely determined by the sole shareholder.
The sole partner may make contributions in cash or in kind.
Contributions in kind must in principle be evaluated by an investment auditor. The sole shareholder may however not need one if both of the following conditions are met:
- No contribution in kind has a value greater than 30 000 €,
- The total value of the contributions does not represent more than half of the share capital.
Much like the SAS, at least half of the contributions have to be paid when the company is created, and they must have been paid in full after 5 years. A SASU may also have variable capital.
The SAS cannot offer financial securities to the public, or allow its shares to be traded on the market. It may, however, make offers of financial securities if they are intended exclusively for qualified investors acting on their own behalf, or for portfolio management companies acting for third parties.
3- How does the SASU function?
Construction and functioning of the SASU
The single partner freely determines in the statutes the organization rules of the company.
The statutes may also account for the inclusion of multiple associates if the company ever changes to a SAS.
The first president of the SASU is obligatorily named in the statutes.
He is the legal representative of the company. He may be a natural person or a legal person.
He is criminally and civilly liable (especially in case of management fault).
The president may be the sole partner or a third party.
In return for his activities as manager, the president may or may not receive remuneration.
The components of this remuneration (fixed, variable, etc.) are either determined in the statutes or in a separate document.
It is possible to appoint a Director General and a Deputy Director General.
Their appointment must be brought to the attention of the registry of the Commercial Court and published in BODACC (Official bulletin of civil and commercial announcements). It must also be the subject of a notice in a newspaper of legal announcements.
If the sole shareholder is the same as the chairman, the SASU benefits from simplified construction and operation rules.
Indeed, in this case, the sole associate does not have to:
- prepare a management report each year when the activity does not exceed, at the end of a financial year, two of the following three thresholds:
- 4 million euros for the balance sheet total
- 8 million euros for turnover excluding tax
- 50 persons for the average number of permanent employees employed during the financial year,
- file the management report to the registry of the commercial court(in the case where he would be required to make it). However, he must still make it available to anyone who requests it,
- approve the financial statements. This formality is considered completed by the filing of the annual accounts and the inventory at the registry of the commercial court,
- mention in the company register, the receipt issued by the registry when filing the annual accounts.
The auditor in the case of the SASU
The appointment of an auditor in SASU is only mandatory if one of the following conditions is fulfilled:
- The SASU exceeds at the end of the year two of the following thresholds:
- total balance sheet greater than 1 million euros
- turnover exceeding 2 million euros, and/or average number of permanent employees employed during the financial year exceeding 20 employees,
- The SASU controls other companies.
4- The tax regime of SASU
The SAS is subject by law to the corporate tax.
However, it is still possible to opt for the income tax if at least one of the following conditions is met:
- The company has a commercial, craft, agricultural or liberal activity (excluding the management of its own property),
- The company was less than 5 years-old when this option was chosen
- The company has less than 50 employees and has an annual turnover or balance sheet of less than 10 million euros,
- The company is not listed on a regulated market,
It can be submitted to the tax office for the first 3 months of the fiscal year in which it is to apply.
This is valid for 5 non-renewable years, unless notice of termination is given, after which it is impossible to return to income tax.
Tax regime for the remuneration of the president of SASU
The remuneration of the president is imposed on the income tax in the category of salaries and wages (application of the standard deduction for professional expenses of 10% or deduction of actual and justified professional expenses).
5- The Social regime of the president of a SASU
He is regarded as an Employee. As such, he benefits from the social security and the retirement scheme of employees. However, he does not benefit from unemployment insurance, as he does not contribute to it.
6- Transferring a SASU
The sole shareholder is free to define in the company statutes the conditions in which potential associates enter and leave the company
Disposals of shares are subject to a tax of 0.1% payable by the purchaser, and to the Capital gains tax regime for businesses payable by the seller.
7- Main advantages and disadvantages of the SASU
Advantages of the SASU
- Simplification of formalism.
- The liability of the sole partner being limited to the contributions.
- Evolutionary structure facilitating the partnership.
- Only one-person structure where the leader is affiliated to the general social regime.
- Credibility for potential partners (bankers, customers, suppliers).
Disadvantages of the SASU
- charges and procedures when creating the company.
If you want to learn more about the SASU and how it fares against other company types, you should check out this table detailing the differences between each company type.
And if you want to learn more about one-person companies in particular, this table detailing one-person companies will tell you everything you need to know.