Société anonyme (SA): what to know
Verified 19 December 2023 - Legal and Administrative Information Directorate (Prime Minister)
A public limited company (SA) is a legal form adapted to large-scale companies wishing to enter on the stock exchange.
The public limited liability company (SA) is a commercial business which may exercise any type of activity, with the exception of certain regulated sectors (tobacco outlets, insurance, etc.).
Its shareholders, at the minimum number of 2 (or 7 if listed on a stock exchange), may be natural persons (individuals) or legal persons (businesses, associations). The law does not set a maximum number of shareholders.
Public limited liability is a particularly important form suitable for large companies whose capital needs cannot be met by a small circle of people. It can raise capital by using the public to finance large-scale projects.
In exchange for their investment, shareholders receive shares that can be admitted to trading on a stock exchange and thus generate profit (dividends).
Please note
You are considering create SA ? We explain how build a step-by-step business.
The share capital of the SA is divided into shares and must be at minimum of €37,000. It may be constituted by contributions of cash (money) and contributions in nature (goods: equipment, vehicles, buildings, goodwill, patents...). On the other hand, inputs into industry (know-how, specific work) are prohibited.
Please note
Shareholders are not financially responsible only to the extent of their contribution. Thus, the creditors of the SA may not sue shareholders over their personal assets.
From the time of creation, at least half of the cash contribution must be freed, i.e. paid into an account at the disposal of the business. The other half must be released within 5 years that follow registration.
Contributions in kind must be assessed by a commissioner for contributions.
Management bodies
It is necessary to distinguish the functioning of the SA with a board of directors and that of the SA with executive board and supervisory board.
Board of Directors
Most often, AS is administered by a board of directors which determines the guidelines for the activity and ensures that they are implemented. It shall carry out such checks and inspections as it deems appropriate.
The board of directors shall comprise 3 to 18 members, natural or legal persons. Directors elected by employees and directors representing employee shareholders are not included in this statement.
One president shall be appointed by the Management Board from among its members. This must be a natural person under the age of 65 (unless otherwise specified in the articles of association). The Chairman shall be responsible for chairing the meetings of shareholders and for dividing up the deliberations of the Board (casting vote).
The first administrators are designated in the articles of association. In the course of social life, the appointment of directors falls within the competence of theordinary general meeting. The term of office of directors shall be limited to Maximum 6 years.
Please note
The number of administrators over the age of 70 years may not be more than 1/3 of the directors in office (unless otherwise provided in the articles of association).
In addition, a managing director shall be appointed by the Management Board or by its Chairperson. This must be a natural person under the age of 65, who is not necessarily a member of the board of directors (unless the articles of association provide otherwise).
The Director-General shall ensure the day-to-day business management and represents business in its dealings with third parties (suppliers, customers, administrations). It may be assisted by delegated Directors-General (up to 5).
If he is not a director, the managing director may combine his duties with a employment contract, provided it is an actual employment.
Executive Board and Supervisory Board
More marginally, SA can be run by 2 organs :
- A Executive Board : it determines the strategic directions of the business' activities and ensures their implementation. It is vested with the broadest powers to act in all circumstances on behalf of business. It is composed of 2 to 5 members (or up to 7 if the SA is listed on the stock exchange), including 1 chairman. However, if the share capital is less than €150,000, the Executive Board may be composed of a single member called " single managing director ”.
- A supervisory board : it monitors the management of the business by the Executive Board (without being able to interfere in the conduct of social affairs) and audits the accounts drawn up by the latter. The Board shall appoint the President and the members of the Executive Board who may be chosen from outside the shareholders (unless otherwise specified in the Articles of Association). The board itself consists of 3 to 18 members who are appointed in the statutes or appointed, in the course of social life, by the ordinary general meeting.
Please note
This business with Executive Board and Supervisory Board can be adopted even in existence business.
Role of the General Assembly
The role of the General Assembly is essential. It is responsible for many tasks, including:
- Appointment and dismissal of directors and members of the supervisory board
- Appointment of auditors
- Approval of social accounts
- Profit distribution
- Amendment of the statutes
- Dissolution of the business
The annual approval of accounts and ordinary decisions are taken in accordance with ordinary general meeting (AGO) whereas decisions to amend the statutes are taken in extraordinary general meeting (AGE).
Taxation of profits
Business tax (IS) —Default regime. The taxable profit is calculated, inter alia, after deduction of the remuneration of the director.
Income tax (IR) : option available for 5 exercises, subject to compliance certain conditions (creation for less than 5 years, less than 50 employees, CA less than 10 million euros...). The option for the personal business scheme entails taxation of profit or loss directly at the level of the members.
Taxation of managers
It is necessary to distinguish according to the form of the SA.
Board of Directors and Chief Executive Officer
Taxation should be distinguished from the following:
- President and CEO : the remuneration of the chairman of the board of directors and the director-general shall be subject to the tax system of wages and salaries. Such remuneration shall be deductible from the profits of the business and taxable to the persons concernedincome tax (IR).
- Administrators : in remuneration for their activity on the board, directors receive a fixed annual sum allocated by the general meeting (ex-attendance tokens). The distribution of this amount among directors is determined by the board of directors. The sums paid are deductible from the profits of the business. They are taxable in the income from movable property and therefore subject to flat-rate levy (PFU) that is 12.8% income tax and 17.2% of social security contributions (option available for progressive scale).
Executive Board and Supervisory Board
Taxation should be distinguished from the following:
- Executive Board : the remuneration of each member shall be determined by the Supervisory Board. Their remuneration shall be subject to the tax system of wages and salaries. Such remuneration shall be deductible from the profits of the business and taxable to the persons concernedincome tax (IR).
- Supervisory Board : in remuneration for their activity within the board, members receive a fixed annual sum allocated by the general meeting (ex-attendance tokens). The distribution of this sum among the members shall be determined by the Supervisory Board. The sums paid are deductible from the profits of the business. They are taxable in the income from movable property and therefore subject to flat-rate levy (PFU) that is 12.8% income tax and 17.2% of social security contributions (option available for progressive scale).
Taxation of shareholders
Shareholders receive dividends that fall into the category of income from movable capital.
Dividends are taxed ex officio at the flat-rate levy (PFU) of 30% of which 12.8% in respect of income tax and 17.2% social security contributions. Shareholders may opt for taxation at the tax scale in income.
It is necessary to distinguish according to the form of the SA.
Board of Directors and Chief Executive Officer
The social system must be distinguished from the following:
- President and managing director : they are covered by the assimilated employees. Thus, they benefit from the social security and employee pension scheme in respect of their managerial duties, regardless of the number of shares they hold in the business. They are excluded from the unemployment insurance scheme, unless they take out additional voluntary insurance.
- Administrators : when remunerated, directors are assimilated employees and benefit from the social security system. On the other hand, if they are not paid, they are not covered by any social protection scheme.
Executive Board and Supervisory Board
The social system must be distinguished from the following:
- Executive Board : the members of the executive board are covered by the assimilated employees. Thus, they benefit from the social security and employee pension scheme in respect of their managerial duties, regardless of the number of shares they hold in the business. They are excluded from the unemployment insurance scheme, unless they take out additional voluntary insurance.
- Supervisory Board : when paid, board members are assimilated employees and benefit from the social security system. On the other hand, if they are not paid, they are not covered by any social protection scheme.
Disposal of shares
In principle, the sale of shares in SA is freeHowever, the law does not provide for any approval procedure. The shares of the public limited-liability company are easily negotiable and transferable, shareholders can easily enter or leave the business.
However, the statutes of the business may include specific clauses to restrict divestiture opportunities:
- Accreditation clause —It allows share disposals to be submitted to the agreement of the shareholders, unanimously or by a majority of them. In the SA, the authorization clause has a limited scope, it can only cover transfers of shares to shareholders and third foreigners to the business. Thus, assignments to the spouse, ascending or descending remain free.
- Preemption clause : it offers the target shareholder a right of priority to redeem the shares that another shareholder plans to dispose of. Thus, the disposing shareholder is obliged to offer his shares to the receiving shareholder before any transfer.
Please note
However, inalienability clauses which prevent the disposal of shares for a specified period are forbidden in the USA.
Registration fees
The transfer of shares shall give rise to the payment of a registration fee to the tax administration. The amount of this tax is 0.1% of the transfer price.
The rate changes to 5% for businesses with a predominance of real estate, that is to say, businesses in which more than half of the assets consist of immovable property not used for the purposes of their business.
Please note
The amount received by the tax authorities may not be less than €25.
SA | LOCK | SARL | |
|---|---|---|---|
Number of partners | 2 minimum (or 7 if listed on the stock exchange) | 1 minimum | 1 to 100 |
Leader | Chairman + Board of Directors or Executive Board | President (and one or more Directors-General) | Manager (one or more) |
Share capital | €37,000 | Free | Free |
Release of cash contributions | At least 1/2 from creation | At least 1/2 from creation | At least 1/5 from creation |
Taxation of profits | Business tax (IS). Possible option for IR | Business tax (IS). Possible option for IR | Taxes on businesses (IS). Possible option for IR |
Tax treatment of the director | Income tax (IR) in the Salaries and Wages category | Income tax (IR) in the Salaries and Wages category | Income tax (IR) in the Salaries and Wages category |
Social security of the director | Assimilated employee | Assimilated employee | TNS if majority management, treated as employee in other cases |
Corporate securities | Actions | Actions | Shares |
Eligible for trading on a regulated market | Yes | No | No |
Transmission of securities | Free (possible approval clause) | Free (possible approval clause) | Authorization of members |
Registration fees | 0.1% of the transfer price | 0.1% of the transfer price | 3% of the sale price after a reduction of €23,000 |
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SA regime (legislative part)
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