SAS vs SARL: differences and impact on executive compensation

1. Introduction

When incorporating a business, choosing between SAS and SARL is one of the most structuring decisions. Both work for SMEs and larger companies, but they differ significantly, especially regarding social protection and the cost of executive compensation.

2. Legal and organisational differences

SARL (limited-liability company): strict legal framework (Commercial Code), regulated operations (share transfers, governance), ideal for family projects or already-linked partners.

SAS (simplified joint-stock company): great statutory freedom, flexible governance, very popular with start-ups and investors.

3. Executive social status: TNS vs assimilated employee

SARL executive (majority manager): TNS, depends on the self-employed social security scheme, social charges of about 40–45% of net compensation.

SAS executive (president): assimilated employee, depends on the general scheme, employee and employer social charges of about 70–80% of net, better social protection but no unemployment insurance except with a GSC contract.

4. Social charge comparison

For €1,000 of net compensation paid: SARL (TNS) ~€1,400–1,450 (mid-level protection) — SAS (assimilated employee) ~€1,700–1,800 (high protection).

5. Dividends: very different treatment

• SARL (majority manager): beyond 10% of capital + current accounts, dividends are subject to social contributions. Flat tax (12.8%) advised.
• SAS: dividends never subject to social contributions (with rare exceptions). Flat tax 30% or progressive-scale option. Watch out for the PUMa tax.

6. Which status to choose?

Choose SARL if: you want to optimise compensation at the lowest cost, you run a stable, family or craft business.

Choose SAS if: you want better social protection, plan to bring in investors, or intend to be paid mainly in dividends.

7. Conclusion

SARL is more economical for the company. SAS is more protective and more flexible for the executive but costs more. Simulating several scenarios before deciding is essential — do not hesitate to consult your chartered accountant.