Let’s look at the characteristics of the société anonyme simplifiée (S.A.S.), the new rules for conversions of company types and the introduction of the S.à r.l. simplifiée (S.à r.l.-S.).
Characteristics of the new company type société anonyme simplifiée (S.A.S.)
- Cannot list its shares (art. 101-19)
- Represented towards third parties by President (art. 101-21)
- Large flexibility in terms of organisation (art. 101-20); this allows the company to for example, mirror the articles of group companies in foreign jurisdictions
- New rules for conversions of company types
- Rather than requiring a valuation report by an independent auditor, the new procedure requires an interim financial situation, or the year-end accounts if year-end has been closed for less than six months (art. 308bis-16)
- This interim financial situation can be waived by unanimous decision of the shareholders, unless there has been a contribution in kind, which was not appraised by an independent auditor, during the two years preceding the conversion (art. 308bis-16)
- The interim financial statement (or the year-end accounts which serve as interim financial statement), unless validly waived, need to be reviewed by an independent auditor (art. 308bis-17)
- The management must submit a report justifying the need to convert; this report may also be waived by unanimous decision of the shareholders (art. 308bis-18).
Introduction of the S.à r.l. simplifiée (S.à r.l.-S)
The law of 23 July 2016 introduced S.à r.l. simplifiée which is aimed at local startups who need to have a corporate object requiring a business licence. Only individuals can be shareholders or managers. One individual cannot hold shares in more than one S.à r.l.-S. The initial share capital may be as low as €1 and needs to be below €12,000. The company does not have to be incorporated by notarial deed but can also be set up by private deed which is published in its entirety.
*All references to articles mentioned above are references to the law of 10 August 1915 unless expressly mentioned.
The SAS is modelled after the French example. As the SAS is represented by the sole signature of its president, the SAS will not be an option for those who wish to be represented in the management of their Luxco, but may provide a rather flexible vehicle if direct control is not required. Generally, however, it is expected that this company form will more be used by local businesses.
The rules on the conversion of company types confirm that an entity needs to be in good standing if it should be converted unless the structure of the share capital does not require protection of minority shareholders, as formal requirements may be waived by unanimous consent of all shareholders. The S.à r.l.-S. has only been included for purposes of completeness and will only be of interest to local startups.