Entrepreneurship in France|Converting SASU to EURL

Maybe you started your business as a SASU , but now you're wondering if transitioning to an EURL might be a better fit. Micco is here to break it down for you and guide you through the process.

Mar 18, 2024

Maybe you started your business as a SASU (Simplified Single-Shareholder Company), but now you're wondering if transitioning to an EURL (Single-Member Limited Liability Company) might be a better fit. Micco is here to break it down for you and guide you through the process.

You've got a SASU, but maybe it's time for a change. Ever wondered if flipping the script to an EURL is doable? Well, wonder no more. We've got the lowdown on how to make the switch and what it means for you and your business.

Before diving into this process, Micco is here to help manage your SASU/EURL.

Micco stands as an all-in-one financial platform tailored for business creators, facilitating a comprehensive array of services. These include streamlined procedures for company registration, professional bank account establishment, capital deposit management, and more.

Micco's commitment to empowering business creators extends to:

  • Effortless company registration processes
  • Seamless professional bank account setup
  • Convenient capital deposit management solutions
  • A suite of additional financial tools and resources catered to entrepreneurs

With Micco, business creators can access a one-stop solution designed to streamline their financial operations and support their growth endeavors effectively.

Table of Contents:
  1. Why Convert from SASU to EURL?
  2. Steps to Convert SASU to EURL
  3. Consequences of Converting SASU to EURL
  4. How Much Does it Cost to Convert SASU to EURL?
  5. FAQs

1. Why Convert from SASU to EURL?

Defining SASU and EURL:

  • What's SASU?SASU stands for "Société par Actions Simplifiée Unipersonnelle," which translates to "Simplified Single-Shareholder Company" in English. It's a type of business structure known for its operational flexibility. In SASU, the sole shareholder's shares are called "shares," and their liability is limited to the amount of capital they invest.
  • What's EURL?EURL, or "Entreprise Unipersonnelle à Responsabilité Limitée," translates to "Single-Member Limited Liability Company" in English. It's essentially a Limited Liability Company (LLC) with a single shareholder.

Like SASU, EURL offers advantages in terms of limited liability, as the shareholder's liability is limited to their investment.

Reasons to Transition from SASU to EURL:

Whether SASU or EURL, each business structure has its pros and cons. Transitioning from SASU to EURL could be driven by various factors.

Often, it's primarily about changing the tax regime. For instance, while profits in SASU are subject to corporate tax (IS), in EURL, they're taxed under personal income tax (IR), even though you can still opt for corporate tax.

Additionally, one advantage of EURL is that it provides a more secure structure than SASU. It has a clearer legal framework, especially around its articles of association. SASU, on the other hand, is more flexible, which can be both advantageous and less secure.

Another reason to change from SASU to EURL could be that, as an EURL, the spouse of the company manager can become an assistant manager under certain conditions.

💡 Curious about the differences and detailed comparison between SASU and EURL? Check out: Starting a Business in France | Comprehensive Comparison between SASU and EURL

2. Steps to Convert SASU to EURL

Step 1: Decide to Convert from SASU to EURL

The right to decide to convert the company lies with the shareholder. One of the advantages of SASU is that, in the case of a sole shareholder, they're the sole decision-maker. Hence, there's no need for a shareholder meeting, simplifying this step greatly.

However, you'll need to consider drafting a record confirming the decision to convert from SASU to EURL.

Additionally, if SASU has an auditor, they should play a role when the legal status changes. They become the transformation auditor, whose role is to attest that the capital is at least equal to half of the share capital. However, if SASU doesn't have an auditor, there's no need to appoint one specifically for the transformation.

Step 2: Amend the Articles of Association

Since transitioning from SASU to EURL involves deep organizational changes, amendments to the articles of association are necessary.

You'll need to draft a new version of the articles to modify the provisions regarding the company's legal form. It's advisable to update the articles to indicate instructions for both the old form (Simplified Single-Shareholder Company) and the new form (Single-Member Limited Liability Company), along with the date of the shareholder's decision and the effective date of the transition. Other provisions may need updates too. For example, their content might be adjusted to reconfirm their accuracy.

Key provisions to check include:

  • Purpose of the company
  • Duration of the company
  • Company operations
  • Corporate governance
  • Manager's compensation

All articles must be carefully reviewed to ensure they align with the new legal form, especially considering that EURL is subject to more legal constraints than SASU.

Step 3: Fill out the Form on the One-Stop Shop Website

To register the conversion from SASU to EURL with the management authority, you'll need to fill out a form, which can be found on the One-Stop Shop website.

The form includes several pieces of information you may be required to provide, such as the change in legal status:

  • Name, legal form, capital
  • Original legal form, i.e., SASU
  • New legal form (EURL) and required information to be filled
  • Information about the manager: If the president of SASU remains the manager of EURL, check the box for "retain the original position"
  • Address where the management authority can send mail
  • Completed information about the applicant's identity, date, and signature

Step 4: Legal Announcement

It's necessary to notify third parties of the conversion from SASU to EURL. For this, a notice of conversion must be published in the legal announcements (JAL).

The legal announcement must include the following information:

  • Information about SASU: company name, legal form, registered office address, registered capital, RCS number, and the former registered office of SASU
  • The modifications made and their manner. In general, the sole shareholder decided on "...” date to convert the company into EURL without creating a new legal entity
  • Clearly state whether it's the only modification
  • Identity and contact information of the former president and the new manager
  • The following statement: "The articles of association have been amended accordingly. This matter is recorded in the commercial and companies register of…”

Step 5: Submit the Transformation Documents

Finally, to make the transformation effective, you'll need to prepare and submit the modification application documents to the relevant court registry, submitted through the One-Stop Shop, while providing all necessary documents, including:

  • Fully completed and signed form
  • Updated and certified copy of the articles of association
  • Acknowledgment form signed by the sole shareholder
  • Certificate of publication of the transformation notice in the legal announcements, if required
  • If necessary, auditor's report
  • Relevant Non-Employee Workers (TNS) form if the manager of EURL is the sole shareholder
  • Cheque for payment of fees

3. Consequences of Converting SASU to EURL

Legal Consequences of Converting SASU to EURL:

  • The company's manager is no longer a president but a manager
  • The company's shares are no longer stocks but social shares
  • Injecting common property into the company's capital requires spousal consent
  • The spouse of the manager in an EURL can become an assistant manager under certain conditions

☝ After converting SASU to EURL, all documents related to the company, such as quotes, invoices, and contracts, need to be updated to correctly reflect the new legal form.

Tax Consequences of Converting SASU to EURL:

Once a sole proprietorship becomes an EURL, profits are, in principle, subject to personal income tax.

In practice, it's the sole shareholder who declares and pays the tax on the company's income during the annual reporting.

However, the sole shareholder can choose to opt for the corporate tax regime for EURL to maintain the same tax regime as SASU.

Accounting Consequences of Converting SASU to EURL:

Converting SASU to EURL doesn't result in substantive changes in accounting.

In fact, you still need to:

  • Balance sheet
  • Profit and loss statement
  • Tax returns
  • Tax declarations
  • And so forth

Additionally, all these accounts must be approved by the sole shareholder at the end of each fiscal year.

Social Consequences of Converting SASU to EURL:

Finally, changing the status of SASU to EURL affects the manager's social security system.

In SASU, the sole shareholder is considered part of the general social security system as a salary director. In contrast, the manager of EURL is a non-employee worker and is subject to the social security system for self-employed workers, regardless of whether they receive compensation.

Although the TNS system provides less protection than the salary director system, the amount of social security contributions in EURL is lower.

4. How Much Does it Cost to Convert SASU to EURL?

To change the legal form of the company, one must consider registry fees, legal announcement costs, and possible external services (such as lawyers or accountants).

If you're sticking to the basics, the cost of converting SASU to EURL is €212.08.

5. FAQs

Is it necessary to appoint an auditor to convert SASU to EURL?

In the case of converting SASU to EURL, it's not always necessary to appoint an auditor. In fact, if SASU has an auditor, they automatically assume this role during the legal status change. If an auditor hasn't been appointed for SASU, there's no need to appoint one specifically for the conversion.

How to convert EURL to SASU?

The steps are as follows:

  • Confirm in the minutes of the meeting the decision of the sole shareholder to convert EURL to SASU
  • If EURL doesn't have an auditor who can act as a conversion officer, appoint a conversion officer;
  • Update the articles of association
  • Publish a notice of conversion in the legal announcements
  • Submit the modification application documents through the One-Stop Shop's INPI website

What are the benefits of converting SASU to EURL?

Benefits include:

  • Changing the tax regime to include company profits in personal income tax (IR) if it's more advantageous for the sole shareholder
  • Granting the manager's spouse the status of assistant manager
  • Subjecting the company's legal status to more legal constraints

💡 If you haven't yet set up your own SASU or EURL, Micco offers a range of services to help you register your company and its professional bank account, empowering you to pursue your dreams.Micco is your ticket to swift, streamlined financial management tailored to the pace of modern entrepreneurship. Experience the difference today and embrace a future where efficiency reigns supreme.