Limited liability company (SARL): what you need to know
Verified 21 November 2025 - Entreprendre Public Service / Legal and Administrative Information Directorate (Prime Minister)
SARL is a commercial business in which the liability of the partners is limited to the amount of their contributions. It is made up of at least two members, a maximum of 100, legal persons or natural persons. It can be chosen by artisans, traders, industrialists and unregulated liberal professions. It is suitable for family projects.
The limited liability company (SARL) is a commercial business that must at least 2 associates, and maximum 100 associates.
The partners of the SARL may be natural persons (adults or minor) or legal persons (for example, another business, an association).
SARL may exercise any type of activity, with the exception of certain regulated sectors (tobacco outlets, insurance, regulated liberal professions).
There's no no minimum share capital required when creating the business.
The SARL allows to limit liability partners in the amount of their contributions. However, the manager's liability may exceed the amount of contributions in the event of mismanagement. For example, if it performs a declaration of cessation of payments late, that is to say without respecting the deadline, it can be ordered to pay part of the debts of the SARL.
The creation of a SARL requires the drafting of statutes.
Please note
You're considering create a SARL ? We explain how build a business step by step.
Liability of SARL partners
Number of associates
To be partner of a SARL, you have to do a contribution to share capital the business in return for the remission of shares. No minimum share capital is required by law.
The share capital is composed ofcash contributions (money) and/orcontributions in kind (for example, a computer, a car). It is possible to perform inputs to industry(provision of specific know-how or skills) which are not part of the composition of the share capital.
The cash contributions shall be paid as follows:
- 20% inputs when creating the business.
- The balance within 5 years after the registration of the SARL.
The contributions in kind are realized by a transfer of ownership of the property to the benefit of the business. Their evaluation by a reporting commissioner is mandatory in principle. Nevertheless, the partners may unanimously decide not to appoint a contribution commissioner when the 2 conditions the following are combined:
- None of the contributions in kind has a value greater than €30,000
- And the total value of contributions in kind does not represent more than half of the share capital.
In return for his contribution to the capital of the SARL, the person becomes a partner by receiving a certain number of shares that give him the following rights:
- Actively participate in the life of the company at general meetings of shareholders (AGO: titleContent , AGE: titleContent)
- Perceive a share of profits made by the business if the partners decide to distribute the profits
Shares of SARL
Evaluation of in-kind contributions
Amount of contribution in kind that does not require a contribution commissioner
Governing bodies
SARL must be administered by one or more managers.
This manager is obligatorily a natural person which may or may not be associated with SARL.
The manager is appointed by the partners in the statutes or by separate act in a AGO: titleContent.
The manager must accomplish everything act of management. Thus, he can, on behalf of the SARL sign contracts, hire employees, take legal action, etc. All its decisions must be consistent with the social interest of the business, that is to say, be useful to it. The decisions of the manager that have no interest for the business can be qualified as mismanagement and therefore engage the responsibility of the manager.
In some cases, the manager's powers are limited by the statutes. For example, they specify that prior authorization of the partners is necessary to adopt a decision.
The manager is prohibited from carrying out the following acts:
- Borrowings from SARL
- To be consented by the SARL an overdraft in current account
- To be endorsed by the SARL the commitments towards third parties: the SARL can not be surety to guarantee the commitments of the manager towards third parties.
Powers of manager
Acts prohibited to the manager
Decision-making
The manager(s) convene the general meeting of the partners to take any decision affecting the life of the business.
There are 2 types of general assembly:
- The Ordinary General Meeting (AGO) decides on the annual approval of the accounts, the appointment, dismissal and remuneration of the manager. Decisions shall be taken by a majority of the members representing at least half of the shares.
- The Extraordinary General Meeting (AGE) shall be met when the statutes of the business need to be amended. It could be for a transfer of registered office, a change of company name, a increase in share capital. Decisions must be taken by a majority of 2/3 of the shares held by the partners present or represented (or by a majority of 3/4 if the SARL was created before August 4, 2005).
The partners are summoned by registered letter with AR or by email 15 days at least before the meeting.
Decisions are made collectively by the partners. They can be taken in assembly, by collective consultation or by an act.
For more information, please refer to the fact sheet on the decision-making in a SARL.
Warning
The relocation of head office on french territory can be decided by the manager(s) provided that the decision is validated by the partners.
Adoption of decisions in a SARL
Voting rules for amending the statutes
We must distinguish the tax system of the LLC, the tax system of its partners and the manager.
Taxation of profits
SARL is subject to principle business tax (IS). Partners can opt for certain conditions for income tax (IR) when the SARL is less than 5 years old or when it is a family SARL.
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SARL subject to business tax (IS)
THEbusiness tax (IS) is a tax on company profits.
The normal rate is 25% for all companies.
A reduced rate of 15% applies to the share of profits up to €42,500 where the business fulfills the following conditions:
- Turnover HT: titleContent less than €10 million
- At least 75% share capital is held by natural persons
SARL subject to income tax (IR)
The SARL option for income tax (IR) is possible for SARLs under 5 years old and for “family SARLs”.
SARL under 5 years
SARL can opt for income tax (IR) if it completes all conditions following:
- It is primarily engaged in a commercial, craft, agricultural or professional activity.
- It's not publicly traded.
- She employs less than 50 employees
- She makes a annual turnover or to a total balance sheet less than €10 million
- It must have been created since under 5 years old at the time of the option request.
- The voting rights must be held at at least 50% by one or more natural persons
- The voting rights must be held at at least 34% by one or more of the following persons: Chairman, Chief Executive Officer, Chairman of the Supervisory Board, Member of the Management Board or Manager and the members of their tax household.
This option is valid for 5 accounting years (5 years) and cannot be renewed.
When the option for income tax is taken, it is not the business who pays the taxes, but each of the partners according to their share of the profits.
SARL family
The “SARL de famille” is a tax option for the personal businesses tax system. This means that the partners are directly taxed on profits carried out by the business, in proportion to their shareholding (shares). The SARL family plan allows the business to be subject to income tax (IR) without limitation of duration.
This scheme is reserved for LLCs formed between members of the same family: parents in direct line (children, parents, grandparents), siblings, spouses, persons linked by a Civil partnership (civil solidarity pact). It may not be chosen in the case of civil or liberal activity.
This tax option must be decided by all partners.
Taxation of associates
The taxation of partners is different depending on whether the SARL is subject to business tax (IS) or income tax (IR).
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SARL subject to business tax (IS)
Where the partners have decided on a distribution of dividends, each partner's share is taxable for income tax (IR) in the category of income from movable capital (RCM).
RCMs are automatically subject to the single flat-rate levy (PFU) which is 30% (12.8% of income tax and 17.2% of social levies). If the partner so wishes, he can choose, instead of the PFU, to opt for taxation at the progressive scale of income tax.
For more information, please refer to the fact sheet on the taxation of dividends received by shareholders.
SARL subject to income tax (IR)
The profit of the SARL is taxed at the level of the income tax partner (IR) for the fraction corresponding to the number of shares held.
It is in addition to the other income of the tax household of the partner in the category of BIC: titleContent or NCB: titleContent. All income of the partner is taxed at the RI on the application of the progressive income tax (IR) scale.
Dividends are part of the income taxed at the level of the partner. For more information, please refer to the fact sheet on the taxation of dividends received by shareholders.
Taxation of the manager's remuneration
The taxation of the manager's remuneration is different depending on whether the SARL is subject to business tax (IS) or income tax (IR).
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SARL subject to business tax (IS)
The manager may receive remuneration corresponding to the exercise of his corporate mandate (acts of management, representation of the business vis-à-vis third parties). The manager may also perform his duties without being paid.
It can also receive dividends if the business decides to distribute part of its profits.
FYI
The minority manager (i.e. if he holds less than 50% shares of SARL) may also receive remuneration if he has signed an employment contract with SARL.
Remuneration of the manager
The remuneration of the manager (from the corporate mandate and/or salary) is taxed on income tax (IR) in the category of salaries and wages. It is subject to social security contributions.
FYI
The manager's remuneration is deductible from the business' profits.
Payment of dividends
The dividends collected by the manager are taxable in the category of income from movable capital (RCM) which are automatically subject to the single flat-rate levy (PFU) which is 30%(of which 12.8% in respect of income tax and 17.2% of social levies). If the manager so wishes, he can opt for the taxation of dividends at progressive income tax (IR) scaleafter an abatement of 40%.
For more information on the taxation of dividends, please refer to the fact sheet on taxation of dividends received by shareholders.
FYI
Dividends that exceed 10%of the share capital are subject to social security contributions of the self-employed.
SARL subject to income tax (IR)
The manager may receive remuneration for his corporate office. When he is a minority manager (i.e. holds less than 50% shares in SARL) , he may also receive remuneration if he has signed an employment contract with SARL.
The remuneration received by the SARL associate manager is included in his share of profit taxable to the RI in the category BIC: titleContent or NCB: titleContent. All income is taxed at the RI on the application of progressive income tax (IR) scale.
Dividends are part of the profit taxed at the level of the partner.
For more information on the taxation of dividends, please refer to the fact sheet on taxation of dividends received by shareholders.
FYI
The manager's remuneration is not deductible from the business' profits.
Dividend levy
Calculation of business tax
Option for personal businesses tax system: SARL de famille
SARL imposed on the IR
The social security system of the manager depends on his status: either “associate manager” if he holds shares, or “non-associate manager” if he is only corporate officer and does not own shares.
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Associate Manager
To determine the social security scheme of the associate manager, it is necessary to distinguish:
- If he has less than 50% shares: it is then minority
- If he holds half the shares: he is egalitarian
- If he holds more than half of the shares, i.e 50% + 1 share, it is majority
Minority Manager
The manager is minority if it has less than 50% shares.
It is a corporate officer who depends on the general social security system and is treated as an employee. He thus benefits from a social protection very close to that of an employee. In the absence of income, he does not pay social security contributions. The minority manager does not benefit from unemployment insurance under his corporate mandate.
However, the manager minority has the possibility to combine his corporate mandate with an employment contract. In this case, he/she can benefit from unemployment insurance if the employment contract fulfills all of the following conditions:
- Match actual employment
- Plan the exercise of separate technical functions of those exercised as manager (e.g. commercial prospecting or technical manager of the maintenance and maintenance of a company)
- Have remuneration for the position held
- Existence of a subordination link with the employer
For more information, please refer to the fact sheet on the social protection of the leader.
Egalitarian Manager
He is egalitarian when he holds half of the shares.
It is a corporate officer who depends on the general social security system and is treated as an employee. He thus benefits from a social protection very close to that of an employee. In the absence of income, he does not pay social security contributions. The egalitarian manager does not benefit from unemployment insurance under his social mandate.
The manager egalitarian cannot combine his corporate mandate with an employment contract because there can be no subordination.
For more information, please refer to the fact sheet on the social protection of the leader.
Majority Manager
The majority manager holds more than half of the shares, i.e 50% + 1 share.
He has the status of self-employed person (TNS) and is affiliated to the social security of the self-employed.His social contributions are calculated according to his professional income of previous years. He must pay compulsory minimum social contributions (daily allowances, basic old-age pension insurance, invalidity-death) even in the absence of remuneration. The majority managing partner of SARL cannot accumulate an employment contract with its social mandate because the existence of a subordination link is impossible. So he cannot contribute to unemployment insurance.
For the amount of the minimum contributions and bases, refer to the document of CPSTI: titleContent on the calculation of social security contributions.
The Urssaf provides a simulator to help the manager calculate the amount of his social contributions based on his income:
Social contribution simulator for the self-employed
For more information, please refer to the fact sheet on the social protection of the leader.
Non-Associate Manager
He's a corporate officer. If he is paid, he depends on general social security system and is treated as an employee. He thus benefits from a social protection very close to that of an employee. The social contributions and contributions levied on his remuneration enable him to receive social protection in return. He does not receive unemployment insurance under his social mandate.
The manager unrelated has the possibility to combine his corporate mandate with an employment contract. In this case, he/she can benefit from unemployment insurance if the employment contract fulfills all of the following conditions:
- Match actual employment
- Plan the exercise of separate technical functions of those exercised as manager (e.g. commercial prospecting or technical manager of the maintenance and maintenance of a company)
- Have remuneration for the position held
- Existence of a subordination link with the employer
For more information, please refer to the fact sheet on the social protection of the leader.
General social security scheme as an employed person
Social security for self-employed persons
The transfer of shares is governed by different rules depending on the type of buyer (family member, partner or third party):
- The sale of shares to a family member or to one associate is free. The transferor is not obliged to obtain the consent of the other partners to transfer its securities. However, the statutes of the SARL may impose an approval procedure (i.e. the agreement of the partners by majority, or unanimity).
- The sale of shares to a third party (ex: employee, non-associate manager) is subject to the approval of partners : the agreement of the majority of the members representing at least half of the shares is necessary. On the other hand, the statutes may provide for a larger majority.
The sale of shares in SARL must comply with the following formality:
- Establishment of a private deed or a notarial deed of sale of shares of SARL
- Registration of the deed of sale of shares with the tax authorities
- Modification of the statutes of SARL which must be filed within 1 month on the website of the formalities of the companies
The transfer of shares shall give rise to the payment of registration fee to the tax administration.
This fee shall be fixed at 3% of the sale price less a reduction equal to €23,000 and brought back to percentage of the number of shares sold in social capital.
Example :
You own 50 shares in a limited liability company whose capital is divided into 400 shares. You sell your shares to the buyer for a value of €50,000.
The amount of registration fees payable by the purchaser is calculated as follows: Transfer price – (23,000 x Number of shares sold ÷ Total number of shares in the business) x 3% .
This would result in: 50,000 - (23,000 × 50 ÷ 400) = 47,125 × 3% = €1,414 of registration fees.
Transfer of shares to a family member or partner
Sale of shares in SARL to third parties
Registration fees
LLC | ||
|---|---|---|
Number of associates | 2 to 100 | 2 to unlimited |
Leader | Manager (one or more) | President (and one or more Directors-General) |
Share capital | Free | Free |
Release of cash contributions | At least 1/5 from creation | At least 1/2 from creation |
Taxation of profits | Corporate tax (IS). Possible option for IR | Corporate tax (IS). Possible option for IR |
Tax regime of the executive officer | Income tax (IR) in the Salaries and Wages category. | Income tax (IR) in the Salaries and Wages category. |
Executive social security scheme |
| General social security scheme |
Social securities | Shares | Actions |
Transmission of securities | Approval of partners | Free (approval clause possible) |
Registration fees | 3% of the sale price after a reduction of €23,000 | 0.1% of the sale price |
The Urssaf offers a tool to choose the most appropriate legal form (or status) through a detailed questionnaire:
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Liability of SARL partners
Maximum number of associates
Cash contribution
Evaluation of a contribution in kind
Transfer of shares to a family member or partner
Transfer of shares to a third party
Evaluation of an in-kind contribution by an External Auditor (ACC)
Appointment and authority of managers
Acts prohibited to the manager
Decision-making in LLCs
Voting rules in LLCs
Dividend levy
Calculation of business tax
Tax regime of the family LLC
Tax regime for LLCs that have opted for the RI
Registration fees