- Category: Which company type?
From SARL to SA
Why doing that?
A société anonyme (SA) has a great deal of flexibility in terms of financing: it can make a public offering and issue various securities on the market.
It may therefore be wise for a limited liability company (SARL), whose rapidly expanding business requires substantial capital, to transform into a limited company.
And from a legal stand point, what are the benefits?
The entry and exit of shareholders from an SA can be organized more flexibly through a shareholder agreement. The transformation of a limited company into an SA is sometimes imposed by law, especially when the SARL has more than 100 shareholders.
Tax and social impact:
The legal representative and the directors of an SA are subject to the tax and social regime of employees (excluding unemployment insurance), irrespective of the size of their shareholding in the share capital.
This can sometimes be an advantage, since the managers of SARL benefit from this social regime only if they are a minority or egalitarian in the capital of the company, which reduces their influence in the decision-making in assembly.