Transformation of a SASU into an SAS: what are the procedures?

SASU and SAS, single-person or multi-person company

First of all, it should be noted that the single-member simplified joint-stock company (SASU) and the simplified joint-stock company (SAS) are one and the same legal form, the SAS with two modalities. The SAS is a multi-person company made up of at least 2 partners. The SASU is an SAS in which all the shares are held by 1 person. A SASU can become an SAS and vice versa. Without being a transformation of one legal form into another (for example, from an SARL to an SAS), the transition from SASU mode to SAS mode requires a transformation of certain articles of the company’s statutes.

What are the procedures for switching from a SASU to an SAS?

The transformation of a single-member simplified joint-stock company (SASU) into a simplified joint-stock company (SAS) generally occurs in three cases.

In the case of an increase with opening of the share capital

The transformation of a SASU into an SAS occurs when the entrepreneur seeks new financing to develop his activity and increases the company’s share capital. This decision makes it possible to welcome investors through the issue of new shares in the company. In this case, it is particularly useful to have planned the conditions of the share capital from the creation of the company. It is thus possible to plan the issue of preferred shares for the founder of the company, as well as certain strategic shareholders.

In the case of a transfer of shares

The transition from a SASU to an SAS is necessary when the sole shareholder wishes to part with part of his shares. Indeed, the transfer of a portion of the share capital to a third party automatically results in the transformation of your SASU into an SAS.

Unlike multi-person companies such as the SCI or the SARL, for example, compliance with an approval procedure for the transfer of shares is unnecessary for single-person companies (SASU or EURL). Indeed, in a SASU, the sole shareholder entrepreneur has the right to transfer the share capital of his company as he sees fit.

In the event of the death of the sole shareholder

It is customary to include a transfer clause in the articles of association. This provision generally provides that, in the event of the death of the sole shareholder, his shares are distributed among his heirs.

How to switch from a SASU to an SAS? What are the formalities?

Step 1: Change your statuses

Before actually undertaking the formalities to change from a single-member simplified joint-stock company (SASU) to a simplified joint-stock company (SAS), it is necessary to amend the company’s articles of association. This amendment makes it possible to redefine the new articles of association, which must mention the methods of decision-making by the partners, the methods of appointing legal representatives (particularly the president), as well as the rules in the event of the entry and exit of partners. The drafting of the articles of association is very important, because it officially and legally establishes the new operating rules of the company.

Please note: it is useful to add certain clauses such as the approval clause (agreement of the partners for the entry of a new partner), the pre-emption clause (priority of existing partners for the purchase of shares) or the inalienability clause (prohibition on transferring shares during a given period).

Step 2: Registration with the SIE (corporate tax service)

Changing the legal form of your company requires informing the tax authorities:

· In case of transfer of securitiesthe sole shareholder must draw up a deed of transfer, although this is optional, register the transfer with the corporate tax office (SIE) within one month, and enter the transfer of shares in the company’s securities movement register.

· In case increase in share capitalthe sole shareholder must draw up a report of the decision to increase capital, register this increase with the tax authorities, and publish an announcement of modification in a legal announcements journal (JAL) to inform third parties of the changes made.

Step 3: Publication of a legal notice

To inform third parties of the change in the legal form of your company (from SASU to SAS), you must publish a legal notice of modification in a newspaper authorized to receive legal notices. This is a mandatory step to ensure the transparency of this change and make it public. This publication is made in the legal notices newspaper of the place where your company’s head office is located. The publication must take place no later than 30 days following the date of signature of the minutes of the decision. To consult all the rates for publication of legal notices, click here.

Step 4: fill out a form on the one-stop shop website

To formalize the change of legal form of your company, it is necessary to make a declaration to the INPI one-stop shop. This process will allow you to update your company’s Kbis extract.

To complete this process, you can access the section dedicated to company modifications on the INPI one-stop shop website.

You will be asked to provide a list of supporting documents

Reminder of the characteristics to know about the SASU and SAS

The flexible structure of the SAS for the integration of new partners

The SAS offers flexibility in terms of admitting partners, unlike other companies in general, which often impose strict prior consent procedures.

In an SAS, the partners have the freedom to define the terms of entry of new shareholders from the creation in the statutes of the company.

This flexibility is particularly advantageous during fundraising operations, facilitating the rapid integration of potential investors within the structure. It allows the SAS to effectively attract new capital and support the dynamic growth of the company.

Benefits and compensation options for SAS managers

The managers of a SASU and SAS benefit from a protective social regime, similar to that of employees, including coverage including health insurance and retirement. However, they do not receive unemployment insurance. This is the difference with the EURL and the SARL whose managers are affiliated to the non-salaried workers’ regime (TNS).

The chairmen and CEOs of an SAS have the possibility to structure their compensation flexibly. They can choose to receive a salary, opt for the payment of dividends, or receive compensation composed of a salary and dividends.

Investor attraction

Thanks to its ability to accommodate several shareholders and its more elaborate governance, the SAS presents a certain appeal for external investors. Indeed, even after the creation of the company, it remains possible to arrange precise statutory clauses specific to certain shareholders. It is simply necessary that these elements comply with the rules of corporate law.

Reminder of the disadvantages of the SAS

Opting for a simplified joint stock company (SAS) has many advantages for entrepreneurs, but it is also important to remember the potential challenges associated with this choice:

Complexity in drafting statutes

The SAS offers great freedom to the partners to draft the company’s statutes. However, this flexibility requires special attention to avoid the statutory clauses being inconsistent with the law or unfavorable to certain stakeholders.

If the company does not have this type of expertise, it is recommended to use a lawyer to ensure that the statutes are correctly and fairly drafted.

High social charges for managers

The managers of a SASU and SAS, such as the president and the general manager, are considered assimilated employees and are subject to significant social security contributions if they are paid remuneration. Compared to the self-employed workers’ regime, this status can lead to higher social costs.

No possibility of stock market listing:

Unlike public limited companies (SA), an SAS cannot be listed on the stock exchange. This means that the company cannot sell its shares on public financial markets, thus limiting the possibility of access to institutional investors and increased liquidity of the shares.

To consider such an option, a transformation into a SA would be necessary.