Entrepreneur SAS or SARL: the match is over remuneration and retirement

SAS or SARL: the match is over remuneration and retirement

The Simplified Joint Stock Company (SAS) and the Limited Liability Company (SARL) are the two most widespread company statutes. In 2020, according to INSEE, of the 218,000 companies created by entrepreneurs, 30% were created in SARL and 67% in SAS. Liability limited to financial contributions, remuneration in the form of salary and dividends, possibility of opening up its capital to investors… these two forms of company share many points in common, but also diverge on some essential points.

If the SAS is the most used, it is because it offers greater flexibility in drafting statutes, which attracts many investors. “The managers of SARLs are, for example, necessarily confronted with the approval clause. They must obtain the approval of the other partners before selling their shares to third parties, ”explains Nicolas Beck, associate lawyer at the firm Skillegal and partner of Captain Contrat. In an SAS, this clause must be added either in the articles of association or in a shareholders’ agreement. “The status is suitable for large-scale projects, for start-ups who want to raise funds,” adds the lawyer.

Remuneration: benefit to the SARL

Between SAS and SARL, the major difference remains social. The president of an SAS is considered an employee and affiliated to the general social security scheme. He then benefits from the same social protection as employees, apart from unemployment insurance.

A majority manager of an SARL comes under the self-employed workers’ regime and, since 2018, has been dependent on the Social Security for the Self-Employed, the former RSI. “SAS status is clearly more expensive because it opens up more retirement rights. A president will pay between 55 and 70% of salary charges, while the rate of social security contributions of an LLC manager is between 35 and 55% ”, estimates Frédéric Thienpont, tax partner in the firm GMBA Walter Allinial.

A corporate officer who wishes to pay himself a net annual remuneration of 36,000 euros will pay around 27,000 euros within the framework of a SAS (excluding mutual insurance) against 15,000 euros in compulsory social charges (excluding mutual insurance and provident insurance) within the framework of an SARL with majority management. “This differential of 12,000 euros must however be balanced by the possibility, for the SAS, of deducting from corporation tax (IS) remuneration and social contributions. The net profit of corporate tax between the two statutes can be estimated at around 9,000 euros, ”analyzes Frédéric Thienpont.

Retirement: benefit to SAS

Between SAS and SARL, it also takes into account the tax issues related to dividends. Since 2018, the dividend tax system has been common: a flat tax of 30% (17.2% social security contributions and 12.8% taxes). For a majority manager of an SARL, this applies within a certain limit: when the dividends paid exceed 10% of the share capital and the average partner’s current account for the year, the excess portion is subject to social contributions, i.e. a rate of levy of about 42%. A majority manager who sets up his SARL with a low share capital of 1,000 euros will therefore pay social charges when the dividends paid go beyond 100 euros.

“In SAS, when you distribute 10,000 euros, a 30% levy applies, which is much more legible. A majority manager who wishes to pay himself dividends therefore has every interest in having significant share capital if he wishes to limit social contributions, ”indicates Frédéric Thienpont. The subtlety doesn’t stop there. In SARL, social contributions on dividends can be borne by the company, and are therefore deductible from corporate tax. “If the SAS wins for its simplicity and readability, the status of majority manager may be more advantageous”, explains Frédéric Thienpont.

But between SAS and SARL, the match is not yet over. Arbitration must also be done according to the age of the leader and his plans. The younger the leader, the more it is in his interest to choose the cheapest plan, namely the LLC, in order to have the maximum amount of funds available to carry out his project. Conversely, an entrepreneur over the age of fifty, anxious to build up a pension, will be more inclined to prefer SAS.

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