How much share capital should you set for your SAS or SARL?

Quick answer. The legal minimum share capital for a SAS, SASU, SARL or EURL is EUR 1, but this symbolic amount weakens your credibility with banks and exposes you to undercapitalisation risk. In practice, set the capital based on your start-up needs and target image: often between EUR 1,000 and EUR 10,000.

Setting the share capital is one of the first concrete decisions when forming a company, and one of the most poorly handled. Many founders pick EUR 1 because the law allows it, without weighing the signal sent to banks, suppliers and future investors. Others needlessly lock up cash that would have been more useful in a shareholder current account.

The question is not "what is the minimum?" but "what amount serves your project". This trade-off depends on your business model, your funding needs and the confidence you must inspire. If you are still hesitating on the legal form, our SARL or SAS comparison clarifies the choice upstream; the rules on capital amount and payment detail the legal framework. Here we address the only real operational question: how much to register.

Share capital is the sum of the shareholders' contributions in exchange for their shares. It serves two distinct functions, which must be clearly separated to decide well.

First function: it funds the start-up. Cash contributions become available cash once the company is registered and the account is unblocked. Capital that is too low forces founders to find other funding from the very first expenses.

Second function: it materialises the guarantee offered to third parties. In a SAS, SASU, SARL or EURL, the shareholders' liability is limited to the amount of their contributions. The capital is therefore the "pledge" creditors see. A capital of EUR 1 signals that no shareholder has genuinely committed their own resources.

These two functions rarely combine the same way across projects. An intellectual-services company has few start-up needs but must reassure its clients; a company that buys stock or equipment needs immediate cash. Capital is therefore not a standard figure, it is the result of reasoning specific to your activity.

Our reading. Capital is not an administrative formality: it is a message of solidity addressed to your ecosystem. The right amount is the one that makes this message consistent with your actual business. An amount aligned with your needs and your ambition is worth more than a round figure chosen out of habit.

Since freedom of incorporation was introduced for these forms, no legal minimum capital is imposed: EUR 1 is legally sufficient for a SAS, a SASU, a SARL or an EURL. This is real progress for projects with no immediate capital needs.

But what is legal is not always advisable. A capital of EUR 1 produces three undesirable effects.

1. Damaged credibility. Banks, landlords and suppliers read capital as a sign of commitment. A trivial amount complicates opening an account, obtaining a loan or securing payment terms.
2. No cash at start-up. With EUR 1 contributed, the company has no resources of its own for its first expenses and starts in immediate dependence.
3. Undercapitalisation risk. A company whose equity is clearly insufficient for its activity exposes the director: in the event of a management fault that contributed to the shortfall in assets during a liquidation, the director's liability may be sought.

Symbolic capital is sometimes justified, for example for a very light umbrella-type company with no funding needs and no banking relationship ahead. But these cases remain a minority. In the vast majority of files, EUR 1 is chosen by default, not by strategy, and turns out to be a hindrance as soon as the company has to build serious commercial relationships.

The underestimated risk. Undercapitalisation is not just an image issue. In early-failure cases, symbolic capital combined with poorly documented current-account contributions is a factor that weakens the director's position. Capital consistent with needs reduces this risk, and it also makes any future discussion with a lender simpler, since the lender will first look at the balance between equity and debt.

The method we apply when supporting company formation starts from needs, never from the legal minimum. Three questions structure the trade-off.

What are your start-up needs? List the expenses of the first months before revenue covers costs: equipment, stock, deposits, first salaries, safety cash. The capital, supplemented where appropriate by a current-account contribution, should cover this phase. We advise reasoning over the first twelve months and not the opening month alone: it is over the year that the gaps between receipts and disbursements appear.

What credibility are you targeting? A consulting activity without heavy investment can start with modest capital. A company that will seek a bank loan, sign commercial leases or respond to tenders has an interest in showing more substantial capital. The capital appears on the Kbis extract, a document your partners consult: it is read as proof of the shareholders' personal commitment.

Does a partner impose a threshold? Some banks make financing conditional on a minimum capital or a capital/debt ratio. Some markets or franchisors also set requirements. Check these constraints before fixing the amount.

The capital-to-debt ratio, a concrete banking benchmark#

When you apply for credit, the bank examines the share you finance yourself against what it lends you. Capital that is too low unbalances this ratio and weakens the application, because the institution then bears most of the risk. There is no legal standard, but a significant own contribution reassures and often conditions approval.

Capital is not the only possible contribution: a shareholder current account also helps. But to a lender, capital, locked in for the long term, carries more weight than an advance repayable at any time. Setting the capital at a credible level before building a banking file is therefore a useful reflex, and it is one of the points we work on ahead of a financing request.

Quick decision by profile#

These benchmarks are indicative: they do not bind the firm and must be adjusted to your specific situation. Two projects with the same forecast turnover can justify very different capital depending on their investment intensity and their dependence on credit.

Setting the amount does not mean paying it all immediately. The law distinguishes subscribed capital (the total commitment) from paid-up capital (the part actually paid at incorporation).

Trade-off. Announcing a high capital while paying only the minimum lets you show a credible base without mobilising all your cash on day 1. It is a useful option, but the balance remains due: until it is fully paid up, the company cannot, for example, benefit from the reduced corporate income tax rate (the capital must be fully paid up for the 15 % rate up to EUR 42,500 of profit). Calibrate this against your priorities, because the unpaid balance remains a debt of the shareholder towards the company, due within the legal five-year period, and the bank may require full payment before financing.

The shareholder current account is often the best answer to the dilemma "I want to fund my company without locking up too much capital". It is an advance of funds the shareholder grants to the company, repayable, and possibly remunerated with interest.

It offers a flexibility capital does not have: the sums can be recovered without a capital increase or reduction formality, subject to available cash. It is a valuable lever to absorb occasional needs, for example a seasonal gap or an unexpected investment, without touching the company's legal structure.

But it does not replace credible capital. To third parties, a repayable advance does not have the same guarantee value as capital committed for the long term. A structure funded with EUR 1 of capital and EUR 50,000 of current account remains, from the outside, undercapitalised: the current account can be claimed back at any time and therefore offers creditors no stable base.

In practice. We often recommend capital consistent with the activity, supplemented by a current account for variable funding. The current account must be documented (written agreement, rigorous accounting follow-up) and its monitoring made easier by a tool such as cash-flow monitoring with Pennylane. An important detail for majority managers: the portion of dividends exceeding 10 % of the share capital, issue premiums and current-account balances is subject to self-employed (TNS) social contributions (art. L131-6 of the Social Security Code). Low capital therefore lowers this 10 % threshold and can increase contributions on dividends. This effect is often overlooked at formation, and it deserves to be quantified from the start for directors who plan to take part of their pay as dividends.

The capital amount has no isolated effect: it interacts with the director's social regime, which depends on the form and the distribution of the shares.

The majority manager of a SARL, like the sole managing shareholder of an EURL, is a self-employed worker (TNS), affiliated with the self-employed social security scheme. The remunerated minority or equal manager, as well as the president of a SAS or SASU, fall under the general scheme (assimilated employee). In none of these cases does the corporate mandate open unemployment insurance rights.

This matters when setting the capital, because the distribution of shares determines both power and status. Holding more than half the shares of a SARL switches you to majority management, hence to TNS status, with a different way of calculating contributions and treating dividends. The amount and the distribution of capital are therefore not two separate decisions: they are thought through together. Our SARL or SAS comparison and legal advice on the articles of association help align amount, distribution and social regime consistently.

Setting a reasonable starting capital is not fixed in stone. The capital can be increased later, through a cash contribution, the incorporation of reserves, or a contribution in kind.

This is a reason not to oversize the initial capital "just in case". You can start with an appropriate amount, then adjust it when the activity justifies it or when an investor comes in. An increase, however, requires a collective decision, formalities to amend the articles of association and a legal notice: it has a cost and a delay that are better anticipated than suffered under pressure. The procedures are detailed in our article on increasing the capital of a SAS.

What the authorities look at. For contributions in kind (equipment, business goodwill, shares), the declared value is subject to scrutiny. A contributions auditor is mandatory if a contribution in kind exceeds EUR 30,000 or if the total of contributions in kind exceeds half of the share capital; failing that, the shareholders may unanimously decide to dispense with one (SARL and SAS). By dispensing with the auditor, the shareholders personally assume responsibility for the value used for five years, which is not neutral in case of overvaluation. Its appointment is covered in our article on the appointment of a contributions auditor, and we carry out this contributions auditor engagement when required.

In formation files, one pattern recurs: a director wants to create a SASU with EUR 1 of capital to "lock up nothing", then is refused a leasing arrangement and supplier terms within the first weeks. The fix then goes through an early capital increase, more costly in formalities than if the initial amount had been calibrated from the start.

The lesson is simple: the right amount is thought through before registration, by looking at the needs of the first twelve months, not by seeking the smallest acceptable figure. Conversely, we also see founders lock up EUR 30,000 of capital when a more modest amount supplemented by a current account would have preserved their personal cash. Both mistakes stem from the same cause: capital set without reasoning, by default or by excess of caution. An accountant specialising in company formation helps you build this reasoning and document it for your partners.

• Beneficial owner. Whatever the capital, you must declare the beneficial owner(s) to the register of beneficial owners through the INPI one-stop shop, at registration or within 15 days, then update within 30 days of any change. A failure or false information is punishable by 6 months' imprisonment and a EUR 7,500 fine.
• Capital / activity consistency. Capital clearly insufficient for the volume of business remains a sensitive point in case of difficulties.
• Current-account documentation. Any shareholder advance must rest on a clear agreement and regular accounting follow-up.
• Fully paid-up capital for the reduced corporate tax rate. If you target the 15 % rate up to EUR 42,500 of profit, check that the capital is fully paid up and that the other conditions are met.

• The legal minimum capital is EUR 1 for SAS, SASU, SARL and EURL, but this amount weakens credibility and cash flow.
• Set the capital based on your start-up needs and target image, often EUR 1,000 to 10,000 for an ordinary project, more for bank financing.
• The minimum payment is 20 % for a SARL and 50 % for a SAS at incorporation, the balance within 5 years; the reduced corporate tax rate requires fully paid-up capital.
• The shareholder current account funds the company without locking up capital, but does not replace a credible base.
• The capital can be increased later: there is no need to oversize it at the start.

This article is for information and does not replace a review of your situation. To align the amount, the share distribution and the director's status, let us discuss your project: our firm, registered with the Ordre des experts-comptables of Ile-de-France, supports you from the decision to registration.