Bylaws For Single Shareholder Corporation: The Complete Guide (2020)
Bylaws For Single Shareholder Corporation: This is an ultimate guide for bylaws for single shareholder corporation. In this guide you will come to know:
What are bylaws for single shareholder corporation?
Which bylaws for single shareholder corporation are most beneficial for the entrepreneur?
How you can use bylaws for single shareholder corporation?
What are the features of bylaws for single shareholder corporation?
Let’s get started!
To start a business, you have to choose the right legal form. And bylaws for single shareholder corporation i.e. SASU (or “Simplified Unipersonal Joint Stock Company”) is one of the most used legal ways by entrepreneurs.
It has been a great success because it offers several interesting advantages, including that of being very flexible in its operation.
In addition, the drafting of the statutes is very flexible, which allows them to be modified very simply.
Be careful, however, because it is important to mention specific clauses essential to the operation and development of SASU.
In this article, we will introduce you to the main features of SASU (bylaws for single shareholder corporation) and everything you need to know (administratively, legally, socially, and fiscally) before you started.
1. WHAT ARE THE BYLAWS FOR SINGLE SHAREHOLDER CORPORATION THAT IS SASU?
The main features of SASU
SASU is a simplified single-member joint-stock company made up of a single partner. A SASU.
Therefore, remains a SAS, but a SAS which will vary depending on the number of partners.
A SASU can become a SAS even if it means becoming single-person again later without each time bringing about the legal transformation of the company.
SASU is an alternative to EURL: this alternative has been all the more interesting since 2009.
Since the bylaws for a single shareholder corporation has eliminated the minimum capital requirement and the obligation to appoint an auditor.
The 2008 law on the modernization of the economy made it possible to significantly simplify access to this legal form.
It has many advantages and makes SASU the social form most appreciated by entrepreneurs.
The advantages of SASU
- partner’s liability within the limit of the contributions he has made
- The form which accompanies the possible evolution of the company: sale, transformation, the addition of partners, and transmission …
- Reduction of certain accounting and administrative formalities
- Assimilation to the employee plan for the president of bylaws for single shareholder corporation.
- Taxation of the benefits of SASU to the SI (but the possibility of temporarily opting for the IR )
- No social security contributions on dividends (unlike EURL) and maintenance of the ARE if the president does not receive remuneration
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2. THE REASONS FOR CHOOSING SASU
The limited liability of the sole partner
The interest of SASU is first and foremost to limit the liability of the sole partner and allow him to separate his personal assets from his professional assets.
However, it should be remembered that this limitation can sometimes prove superficial in single-person forms.
Creditors have increasingly inclined to ask the sole partner for personal guarantees in return for credits or advances.
Share capital and the statutory auditor
The simplified one-person joint-stock company. That is like the EURL (One-Person Company with Limited Liability).
It can be incorporated with a capital freely determined by the sole partner.
The partners can make various contributions to constitute the share capital of SASU.
It is in cash (sum of money), or in-kind (movable property, real estate, etc.).
In addition, since the Law of Modernization of the Economy (law LME) of 2008.
And contributions in the industry (know-how, technical knowledge, address book …) are also possible.
By their nature, they cannot concretely appear in the share capital.
But the contributing partner still benefits from actions in exchange for their contributions.
Therefore a right of access to shared benefits.
In SASU, the appointment of the statutory auditor is only compulsory.
And if SASU exceeds two of the following thresholds at the end of a financial year.
- $ 2,000,000 in turnover excluding tax
- 1,000,000 $ balance sheet total
- More than 20 employees
Even if these conditions are not met, the appointment of an auditor has requested in court by one or more partners representing at least one-tenth of the capital.
SASU accounting and administrative formalities
SASU benefits from specific reductions in accounting and administrative formalities.
Thus, for example, they do not have to file the management report with the court office (but it must have made available to anyone who requests it).
The sole partner, a natural person, who assumes the chairmanship of the company.
He is even exempt from drawing up the management report when certain following thresholds have not exceeded.
He is exempt from inserting the opinion in BODACC (official announcements bulletin civil and commercial) to which any registration normally gives rise!
You would like to know more about what this status implies on the SASU tax and social security system.
The transformation of SASU
The fundamental advantage of SASU is also to change the structure of society to meet development or transmission objectives.
It is thus easy to sell shares or transform SASU into other social forms.
Thanks to its flexibility, a simplified joint-stock company can be alternately single-person or multi-person (SAS).
It can be formed by a single partner, be opened thereafter to new partners, then become one-person again by combining all the actions in one hand.
3. THE FUNCTIONING OF SASU
The special feature of SASU is that the decision-making power is concentrated in the hands of a single partner who (in most cases) will exercise the functions of the president.
However, it is obviously possible to appoint an unrelated chairman in a simplified one-person joint-stock company.
For the rest, it is the Bylaws For Single Shareholder Corporation which applies.
Thus, the conditions for the release of contributions, the evaluation of contributions in kind, the deposit of funds.
And also as well as the formalities of publicity and registration in the Trade and Companies Register are those of public limited companies.
Therefore those of SAS ( However, as we have seen, an exception exists when the sole natural person assumes the presidency of the SASU alone.
There is exemption from the insertion of a notice to the BODACC).
Like other companies, SASU can benefit from the resumption of acts performed by the sole partner during the period of incorporation of the company, in the name and for the needs of the latter.
SASU is also a way of simplifying the drafting of these statutes by providing for statutes that work for both an SAS and a SASU.
In fact, it is possible to adopt clauses relating to shareholder controls, such as inalienability, approval, change of control and exclusion clauses.
At the same time providing that they will only apply when the company will no longer be one-person
(these clauses having any meaning when all the shares are combined in the hand of a single shareholder).
Thus, if you decide to move from SASU to SAS, you will not have to re-write your statutes.
4. THE PRESIDENCY OF SASU
The sole partner, the natural or legal person, maybe appointed chairman.
This characteristic can, in groups of companies.
It proves to be an advantage of SASU compared to EURL , since an EURL (ie a legal person) cannot be the sole partner of another EURL. SASU is, therefore, a practical management tool for holding companies (a SASU can itself be managed by a SASU and so on).
When this sole partner personally assumes the chairmanship of the company. The 2008 law on the modernization of the economy simplified the formalities for setting up the company.
Its constitution is subject to streamlined advertising formalities.
- The simple deposit of the duly signed accounts with the RCS within six months of the end of the financial year implies their approval,
- SASU which does not exceed certain thresholds is exempt from the obligation to draw up a management report. The thresholds are identical to those described above for the appointment of the statutory auditor.
The compensation of the president of SASU
The right to the remuneration of the president of SASU must be provided for contractually in an agreement. This is one of the important features of bylaws for a single shareholder corporation. However, this regime is subject to a few constraints with the SASU since it is sufficient that the agreement between the SASU and its manager has entered in the register of decisions of a single partner.
In addition, the sole partner has also intended to receive all of the dividends likely to be distributed.
The amount is freely fixed. The president then has the choice:
- Receiving a salary: this allows him to benefit from social protection and remuneration even if the company does not make any profits.
- Do not pay yourself a salary and get paid through dividends: in this case, the latter has no social security coverage but may benefit on a personal basis from a 40% reduction before taxed on the income tax. Of course, this means having money to distribute (profits or reserves).
The tax and social system
The tax regime of the president of SASU is the same tax regime as that of the president of the public limited company (SA) .
In the case of a natural person, the president’s remuneration is taxed in the category of salaries and wages.
The president of SASU (natural person) is covered by the social security plan.
Whether he is a sole partner or not and benefits from the employee retirement plan.
Let us also remember that there is no incompatibility between the non-remuneration of the president and the maintenance of his allowances. (if he has opted for the maintenance of the AER ).
Regarding the possibility of combining the social mandate of the president with an employment contract.
This is not possible for the association president since the latter would have no hierarchical superior. the condition of subordination of the employment contract would, therefore, be not respected.
On the other hand, for the non-associate chairman, this cumulation would be possible as long as he can justify the exercise of effective technical functions and he remains in a state of subordination towards the company.
5. THE DRAFTING OF THE STATUTES OF SASU
The importance of long-term status
When the creation of a SASU, the only partner is the only decision-making person within the company. This position of exclusive power can motivate you to delay your attention on the drafting of the company’s statutes. However, even if you are currently Chairman and sole shareholder, it is difficult to predict precisely and precisely the changes that your business will have to undergo. In this sense, the drafting of the SASU statutes is both a formality allowing you to define rules, but it is also a security measure. It is about being able to foresee the opportunities, such as setting up variable capital, and the risks.
However, the SASU makes it possible to freely set up the conditions which have attached to the relations between the partners and especially the fate granted to the actions.
The importance of drafting statutes
The drafting of the statutes of a SASU has said to be free, however, it is a step that should not be overlooked. As a business creator, it is difficult to protect yourself and contemplate the worst. However, badly drafted statutes can have irreversible consequences on society: ban on carrying out an activity not provided for by the corporate purpose, litigation over the end of an executive’s mandate …
These failures may oblige the entrepreneur to modify these statutes and therefore incur unwanted additional costs. This is why it is better to supervise the creation of your business and benefit from the expertise of a professional in corporate law.
You could, of course, consider using a free SASU status model, found on the internet, but this carries a high degree of risk. In addition, if you subsequently wish to attract investors, optimize the remuneration of the manager or even provide for the conditions of transfer of your business, you will need clauses provided for this purpose in your articles of association.
6. A WORD ON THE CLAUSES TO BE INSERTED FOR SASU
Here are some examples of clauses that you will have to consider if you choose not to be accompanied in the drafting of your statutes.
We could just as easily speak of a social pact or company contract. They have necessarily drawn up in writing and must contain different information .
The written document has not required as a condition of validity.
But as a condition of evidence and above all as a prerequisite for the formalities of registration.
The social object
We talk about the social object for everything that has an interest in the description of the activity of the company. It is advisable to write something both broad and comprehensive to plan all current and future activities of the company. Other clauses mean for example the life of the SAS (often 99 years).
Management and decision-making
The President has appointed at the creation of SASU. The rules which allow the appointment of another President or the renewal of the seat in the assembly must be notified in the statutes. The rights and responsibilities of the partners are specified in the statutes, and this is a part for which the creators of the company have almost total freedom.
The amount of share capital
The amount of the capital of a joint-stock company may vary. Shares have indeed shares which has revalued following a financial statement. You can still set a minimum and a maximum amount in the statutes. The clause can also define the conditions which allow the modification of the amount of capital. The inclusion of contributions in kind must be subject to a specific clause.
The SAS may have only one partner, who may or may not be the manager of the company, we speak of SASU. This characteristic is reversible and the SASU, depending on the number of partners, will again become multi-person , even if it means becoming single-person later , without each time entailing legal transformation. The clauses specific to SASU have precisely linked to the freedoms that this social form brings.
This question is relatively complex, since you need to have mature experience in company law in order to be able to foresee all future contingencies. The advice of a lawyer specializing in the drafting of the statutes of the SAS then appears to be essential.
Here is a sample of the clauses specific to SASU for which you will have to pay particular attention. However the statutes of a company, and even more those of a SASU.
They have personalized according to your desires, but also the constraints related to your activity.
The preemption clause
When movements have made in the capital of the company.
It is among others by the arrival or the departure of a partner.
It happens that certain actions need to find a buyer. So when a partner leaves the company. He must sell these shares.
This procedure is in principle in the form of a financial transaction.
The preemption clause then makes it possible to give priority to partners who are already in the business, over a third party.
Indeed, the latter would then join the group of shareholders and would then have rights as an officer of SASU.
The preemption clause aims then to favor the initial core of the founding leaders. In principle, a SASU has a single founder and partner.
However, it has recommended to include this clause in view of the developments that SASU may experience in the future.
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The non-transferability clause
The non-transferability clause, also known as the inalienability clause, is a condition that reduces the power of the partners.
During a period which has not exceeded 10 years, the partners have not entitled to transfer their shares. Like the preemption clause, it aims to preserve unanimous management that is faithful to the company’s initial aspirations.
These are some of the bylaws for single shareholder corporation to take into account. The easiest way is to have a legal expert accompany you who can advise you. And I hope you must have understood detailed information on bylaws for single shareholder Corporation.
I am sure that you will definitely take advantage of these bylaws for single shareholder corporation.
All information provided about bylaws for a single shareholder corporation has drawn from the best resources. However, we don’t take any responsibility for any kind of trouble you will face if you follow this information on bylaws for single shareholder corporation. We request you to discuss this with your personal lawyer. Thank you.
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