SARL or SAS: which structure for your French company in 2026?

Choosing between SARL (société à responsabilité limitée, roughly equivalent to a private limited company) and SAS (société par actions simplifiée, a simplified joint-stock company) is one of the first and most consequential decisions when setting up a French company. Both structures offer limited liability and are subject to corporation tax by default, but they differ substantially on four points that matter in practice: the manager's social security regime, the tax treatment of dividends, share transfer costs, and governance flexibility.

In the creation files we handle at Hayot Expertise, the question almost always surfaces in the same form: "I've been told SAS is better." Sometimes it is. But a director who wants low social contributions during the early years of a business may actually be better served by the SARL structure. A founder planning a fundraising round in two years should almost certainly choose SAS from day one. The structure must serve the project, not the other way around.

Direct answer: SARL suits stable, family-run, or closely held projects where the majority manager accepts the self-employed (TNS) social regime. SAS is the right choice when fundraising, outside investors, BSPCE share warrants, or significant dividend distributions are part of the plan.

Both the SARL and the SAS are commercial companies with no statutory minimum share capital (one euro is technically sufficient, though inadvisable for credibility). The SARL operates within a framework largely defined by the French Commercial Code: quorum rules, supermajority thresholds, and share transfer procedures are all largely prescribed by law. The SAS, by contrast, gives shareholders almost complete freedom to draft their own governance rules, making it the preferred vehicle for structured investor relationships and complex shareholding arrangements.

In their single-shareholder forms, the SARL becomes an EURL and the SAS becomes a SASU. The fiscal and social rules remain identical to their multi-shareholder equivalents. For a detailed comparison of the solo forms, see our guide SASU vs EURL.

The table below sets out the key structural differences:

Sources: entreprendre.service-public.fr — SARL, SAS, social contributions for SARL, social contributions for SAS.

The decision rarely turns on a single criterion. These are the four questions to work through, in order of structural importance:

1. Which social regime do you want for the manager? This is the most frequent deciding factor in our client files. The majority manager of a SARL pays lower contributions but receives less generous social protection. The president of a SAS pays more, builds a stronger pension entitlement, and pays nothing in months where no salary is drawn.
2. How do you plan to take money out — salary, dividends, or both? Dividends above a threshold in a SARL attract TNS social contributions on top of income tax. In a SAS, dividends are free of social contributions and subject only to the flat tax at 31.4%. Depending on the proportion of dividends in your planned remuneration, this gap can be material.
3. Is your share capital likely to change? If you are planning a fundraising round, issuing preference shares, or granting BSPCE warrants to key employees, SAS is the only viable option.
4. Do you anticipate a share transfer within five years? Registration duties on SARL share transfers run at 3% after a statutory allowance; SAS share transfers attract only 0.1%. On a €500,000 transaction the difference exceeds €14,000.

This is the point that generates the most costly corrections after the fact. The majority manager of a SARL — one who holds, directly or indirectly, more than 50% of the shares — is affiliated to the Sécurité sociale des indépendants (SSI, the self-employed social security fund, formerly known as RSI). Contributions amount to roughly 30–45% of professional income. The regime provides a basic and supplementary pension but no unemployment insurance and more limited income-replacement cover than the general employee scheme.

The president of a SAS, regardless of their shareholding, is treated as an assimilated employee under the general social security scheme. Employer and employee contributions together represent approximately 70–80% of net salary, or roughly 54–55% of total payroll cost. In exchange, pension rights, daily sickness allowances and life-and-disability cover are aligned with those of a salaried executive.

Worked example — same available profit, two structures:

Assume €80,000 of profit available before the manager's remuneration.

These figures are indicative. An accurate calculation depends on the composition of remuneration, options elected, and the manager's personal circumstances. Ask for a simulation before making the decision.

A founder who expects several months without revenue during the early ramp-up will find an immediate cash-flow advantage in the SAS structure: no social contributions are due when no salary is paid. In a SARL, minimum TNS contributions continue to accrue even in months of zero remuneration.

On this point, SAS is the unambiguous answer. Institutional investors, seed funds and business angels work almost exclusively with SAS structures for concrete operational reasons:

• Preference shares (actions de préférence): a SAS can issue share classes with differentiated rights (priority dividend, veto rights, liquidation preference). A SARL cannot.
• BSPCE share warrants: reserved by law to SA and SAS companies, BSPCE allow founders to incentivise key employees with equity upside under a favourable tax regime.
• Free drafting of shareholders' agreements: SAS articles and side agreements can include drag-along, tag-along, ratchet and anti-dilution clauses with very wide freedom. The SARL framework offers far less flexibility.
• Share transfer consent: in a SARL, any transfer of shares to a non-shareholder requires the consent of existing shareholders under procedures set by law. In a SAS, consent clauses are drafted freely in the articles.

If your project starts today as a SARL and you expect to raise funds in two or three years, conversion to SAS is possible but involves costs and administrative steps (see our article on converting a SARL to SAS). Building the right structure from day one is considerably cheaper.

From 1 January 2026, the French flat tax (prélèvement forfaitaire unique, PFU) stands at 31.4%: 12.8% income tax plus 18.6% social levies (an increase of 1.4 percentage points following the 2026 Social Security Finance Act).

In a SAS or SASU, dividends paid to the president carry no social contributions: only the flat tax at 31.4% applies (or the progressive income tax scale if that is more favourable).

In a SARL or EURL taxed under corporation tax, the rule is more complex for the majority manager. The portion of dividends exceeding 10% of (share capital + share premium + shareholder current account balances) is subject to TNS social contributions in addition to income tax. This rule is specifically designed to discourage the substitution of dividends for salary as a way of reducing social charges.

In practice: if a SARL has share capital of €10,000 and the majority manager receives €50,000 in dividends, approximately €49,000 of that amount (€50,000 minus 10% × €10,000) will attract both income tax and TNS contributions — not just the flat tax. Maintaining a low share capital in a SARL mechanically increases the proportion of dividends subject to this surcharge.

The point is often overlooked at incorporation but becomes central whenever a shareholder exits or a new investor enters.

• SARL shares (parts sociales): registration duties of 3% calculated on the transfer price after a statutory allowance of €23,000 (prorated to the fraction of shares transferred).
• SAS shares (actions): registration duties of 0.1% of the transfer price.

On a transfer valued at €300,000, duties amount to approximately €8,230 in a SARL versus €300 in a SAS. This structural gap should be factored into any shareholders' agreement and any exit scenario from the outset.

We recommend SARL when: two or three founders who know each other well are launching a stable business — a trade activity, a local retail operation, or a regulated profession in corporate form — with no fundraising planned. The SARL's statutory framework reduces friction over governance and avoids disputes that arise from vaguely drafted free-form articles. The SARL de famille variant (article 239 bis AA of the French Tax Code) can also unlock an income-tax transparency option that is valuable for family-run property or commercial projects.

We recommend SAS when: the founder anticipates rapid growth, outside investors, or wants to set up equity incentive schemes for key staff (BSPCE). SAS is also the right answer when dividend distributions represent a significant part of the intended remuneration structure, or when a share sale is a realistic scenario within three to five years. For solo founders, the SASU allows the director to pay zero social contributions in months where no salary is drawn — a meaningful cash-flow advantage during the early ramp-up period. For more detail on the president's charges in a SASU, see our article charges sociales SASU.

• The flat tax (PFU) has risen to 31.4% from 1 January 2026 (up 1.4 points under the 2026 Social Security Finance Act). Dividend remuneration models calibrated on the previous 30% rate need revisiting.
• The 10% of capital rule for SARL dividends subject to TNS contributions is unchanged. Keeping share capital artificially low mechanically increases the proportion of dividends that attract these charges.
• Minimum paid-in capital at incorporation is higher in SAS (50%) than in SARL (20%) — a cash-flow point to plan for if the founding capital is significant.
• Converting from SARL to SAS during the company's life generates legal and administrative costs (legal notice publication, articles amendment, INPI filing). Getting the structure right at incorporation is cheaper.

Updated 1 January 2026. Sources: entreprendre.service-public.fr — SARL, SAS, SARL social contributions, SAS social contributions, PFU update.