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Forms of legal entity for French companies

Société Anonyme - French joint-stock company (SA)

A French SA is broadly equivalent to a public limited company. With a minimum of seven shareholders and initial share capital of 37,000 EUR, an SA’s founders can be individuals or legal entities. Shareholders’ liability is limited to the value of their share contribution. Originally, shareholders in SAs could be anonymous and could also transfer their shares privately so that company management would not necessarily know who owned its shares. However, this facilitated money laundering and tax evasion, so laws were passed to prevent this; nevertheless, shares can still be retained by holding companies to hide the real beneficiary.

Société a responsabilité limitée - French limited liability company (SARL)

Roughly equivalent to a British limited company and a US limited liability company, a SARL requires at least two shareholders and can be formed by a maximum of 100 individuals or legal entities. Shares are not freely transferable other than to a spouse, descendant or other close relative; otherwise, transfers require the agreement of at least 50% of the shareholders. There is no minimum share capital, and liability is limited to the individual’s investment. SARL is the usual structure for small and medium-sized French companies.

Société par actions simplifiée - Simplified joint-stock corporation (SAS)

Broadly the same as a British limited company and a US limited legal company, the SAS designation is similar to but more flexible than the SA; it requires just two partners and does not need a board. A president - who can be a person or another company - must be appointed by the shareholders, and is responsible for the operation of the company. An SAS may also have a General Manager. The SAS entity is often used for wholly owned subsidiaries.

Entreprise individuelle - French sole proprietorship (EI)

No initial capital is required to set up an EI. The sole entrepreneur is responsible for all debts and obligations.

Société en norm collectif - Commercial partnership (SNC)

With no minimum capital stipulation, an SNC requires a minimum of two partners, who are responsible for the debts and other obligations of the partnership to the extent of their personal assets.

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