Legal forms of a company
Sole proprietorship and micro-enterprise, EURL, SARL, SASU, SAS and SA: number of partners, capital, liability, manager, social security scheme and taxation, then choosing the form to fit the project.
- 27 cards
- 5 topics
- Free
The outline, topic by topic
Each topic is weighted the way the exam weighs it.
- Concepts
- Questions
- Sort and link
- Scenarios
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A few cards from the deck
Legal form: what is it?
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The legal framework chosen at creation, which sets who owns the business, who runs it, who answers for its debts and how profits are taxed.
Changing form is possible but costly in formalities: choose according to the project at three or five years, not just the ease of starting.
Two friends launch a start-up with 2,000 euros of contributions. Why is a public limited company (SA) not right for them?
- It requires a minimum capital of 37,000 euros
- It requires at least seven partners from the start
- Its managers cannot be paid
- Its partners answer without limit for the debts
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It requires a minimum capital of 37,000 euros
The SA is the only one of the six forms to require a minimum capital. It has limited liability, its managers are paid, and the threshold of seven shareholders only applies to a listed company.
The SARL is run by a … (gérant), the SAS by a ….
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The SARL is run by a manager (gérant), the SAS by a president.
A majority manager of a SARL falls under the self-employed scheme; a SAS president is treated as an employee, as is a minority manager of a SARL.
Limited liability: what is it?
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The principle that partners answer for the company's debts only up to what they contributed to it.
It protects personal assets, except for management misconduct or a personal guarantee: banks often ask for such a guarantee from the manager of a new company.
Two developers want to team up and bring in an investor in a year's time, with special rights. Which criterion should decide the form?
- The amount of minimum capital required at creation
- The cheapest social security scheme for the managers
- The maximum number of partners the law allows
- Freedom of the articles to organise the entry of partners
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Freedom of the articles to organise the entry of partners
An investor negotiates rights (voting, exit, information) that must be writable into the articles. Capital is free in a SARL as in a SAS, and the social scheme has nothing to do with an investor coming in.