Société Anonyme (SA): What You Need to Know
Verified by Directorate for Legal and Administrative Information (Prime Minister)
A public limited company (SA) is a business structure tailored for large-scale companies seeking to list on the stock exchange.
Definition of Public Limited Company (SA)
The public limited company (SA) is a commercial entity that can operate any type of activity, except in certain regulated sectors (e.g., tobacco throughput, legal professions). Its shareholders must number at least two (or seven if listed on the stock exchange), and they can be natural persons (individuals) or legal entities (businesses, associations). There is no upper limit on the number of shareholders.
This business structure is particularly suited for large companies whose capital requirements cannot be met by a small group of people. An SA can raise funds from the public to finance major projects. In exchange for their investment, shareholders receive shares, which can be listed on the stock exchange, offering the potential for dividends.
Please Note
Are you considering creating an SA? We explain how to build the business step-by-step.
SA Share Capital
The share capital of a public limited company (SA) must be divided into shares and must be at least €37,000. It can be formed by cash contributions (money) and contributions in kind (goods such as equipment, vehicles, buildings, goodwill, patents, etc.). However, contributions in the form of industry (e.g., know-how, specific work) are prohibited.
Please Note
Shareholders are only financially liable up to the extent of their contributions. Therefore, creditors cannot pursue shareholders’ personal assets.
At the time of creation, at least half of the cash contribution must be paid into a bank account in the company’s name. The other half must be paid within five years following registration. Contributions in kind must be evaluated by a contribution auditor. The auditor’s report is filed with the Registry of the Commercial Court and is available to shareholders.
Governance of the SA
Management Bodies
The governance structure of an SA depends on whether it is managed by a board of directors or an executive board and supervisory board.
- Board of Directors
The most common governance structure is a board of directors, which determines the company’s direction and ensures that the strategy is implemented. The board is responsible for overseeing the company’s activities, conducting inspections, and making decisions on various matters.
The board of directors consists of between 3 and 18 members, who can be natural or legal persons. Directors elected by employees and directors representing employee shareholders are not included in this number.
A president is appointed from among the members of the board. The president must be a natural person under the age of 65, unless otherwise specified in the company’s articles of association. The chairman is responsible for overseeing shareholder meetings and managing board deliberations (including casting votes).
The first directors are appointed in the articles of association, and subsequent appointments are made by the ordinary general meeting (AGM). The maximum term of a director is six years.
Please Note
The number of directors over the age of 70 cannot exceed one-third of the total number of directors unless otherwise provided in the company’s articles of association.
Additionally, a managing director is appointed by the board of directors or by its chairman. The managing director must be a natural person under the age of 65, who is not necessarily a member of the board of directors, unless the company’s articles of association specify otherwise. The managing director handles the company’s day-to-day management and represents the company in dealings with third parties (e.g., suppliers, customers, and authorities). The managing director may be supported by up to five delegated directors-general.
If the managing director is not a director, the position may be combined with an employment contract, provided it is an actual employment arrangement.
Role of the General Assembly
The General Assembly plays an essential role in the company, handling various important tasks, including:
- Appointment and dismissal of directors and members of the supervisory board
- Appointment of auditors
- Approval of financial accounts
- Distribution of profits
- Amendment of company statutes
- Business dissolution
Annual approval of accounts and ordinary decisions are made during the ordinary general meeting (AGM), while changes to the statutes require an extraordinary general meeting (EGM).
Tax System of the SA
- Taxation of Profits
An SA is subject to business tax (IS). The tax is based on the company’s profits from the last completed fiscal year, with a 25% tax rate. The company is required to submit an income tax return (form 2065) within three months of the end of its fiscal year. If the fiscal year ends on December 31 or if no fiscal year is closed during the year, the declaration must be filed by May 2.
A reduced tax rate of 15% applies to small and medium-sized companies with a turnover of less than €10 million, provided that their capital is fully paid up and 75% is owned by natural persons. This reduced rate applies to the first €42,500 of profits; profits above that amount are taxed at the standard 25% rate.
- Taxation of Managers
There are distinctions in taxation depending on the structure of the SA.
- Board of Directors and CEO: The president and CEO’s compensation is subject to income tax under the wages and salaries category. The remuneration is deductible from the company’s profits and taxed as personal income.
- Executive Board and Supervisory Board: The directors are paid an annual fixed fee approved by the general meeting (typically attendance fees). These fees are deductible from the company’s profits but are subject to flat-rate taxation (12.8% income tax + 17.2% social security contributions, with an option for progressive taxation).
- Taxation of Shareholders
Shareholders receive dividends that are considered income from movable capital. Dividends are taxed at a flat rate of 30%, which includes 12.8% income tax and 17.2% social security contributions. Shareholders can opt for taxation according to the progressive tax scale.
Social System for Directors of the SA
The social system varies depending on the structure of the SA.
- Board of Directors and CEO: Presidents and managing directors are classified as assimilated employees, meaning they receive social security and pension benefits, regardless of their shareholding in the company. They are excluded from unemployment insurance unless they choose to purchase additional voluntary coverage.
- Administrators: If paid, directors are considered assimilated employees and benefit from the social security system. If unpaid, they are not covered by any social protection scheme.
Transfer of SA Shares
In principle, shares in an SA are freely transferable. However, the company’s statutes may include specific clauses that restrict share transfers, such as:
- Accreditation Clause: This clause requires shareholder approval (either unanimous or by majority) for share transfers. It is limited in scope and typically applies only to transfers to non-shareholders or third parties. Transfers to spouses, ascendants, or descendants are generally unrestricted.
- Preemption Clause: This clause grants shareholders a right of first refusal, obligating a selling shareholder to offer their shares to existing shareholders before selling them to external parties.
Please Note
Inalienability clauses, which prevent the transfer of shares for a specified period, are prohibited in the USA.
Registration Fees
The transfer of shares incurs a registration fee of 0.1% of the transfer price. This rate increases to 5% for businesses with a majority of real estate assets (i.e., businesses where more than half of the assets are real property not used in the business’s operations). The minimum fee is €25.
Comparison Between SA, SAS, and SARL (Table)
Feature | SA | SAS | SARL |
Minimum Partners | 2 (7 if listed) | 1 | 1 to 100 |
Leader | Chairman + Board or Executive Board | President + Director(s) | Manager(s) |
Minimum Share Capital | €37,000 | Free | Free |
Release of Cash Contributions | At least 50% at creation | At least 50% at creation | At least 20% at creation |
Tax on Profits | Corporate tax (IS) | Corporate tax (IS) | Corporate tax (IS) |
Taxation of Directors | Income tax (IR) | Income tax (IR) | Income tax (IR) |
Social Security | Assimilated employee | Assimilated employee | Self-employed or employee |
Corporate Securities | Shares | Shares | Shares |
Market Eligibility | Yes | No | No |
Transfer of Shares | Free (with approval clauses) | Free (with approval clauses) | Member approval required |
Registration Fees | 0.1% of transfer price | 0.1% of transfer price | 3% of sale price after €23,000 |
This detailed overview provides essential information about setting up and operating a public limited company (SA).
