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To form an SA in 2022 is to be a superhero

Incorporation of an SA in 2022

April 7, 2022

Easy as breakfast in bed

The public limited company (SA) is designed for large companies and is a commercial company by form, whose capital is divided into shares (registered or anonymous, listed or not on a stock exchange) constituted between partners who are not merchants and who bear losses only up to the amount of their contributions:

- it can make public offers of financial securities (OAP)

- it can have an unlimited number of shareholders;

- shares are tradable securities, on a regulated market, if the company is listed.

A distinction is made between :

- the classic SA: managed by a board of directors, a chairman of the board (CEO) and, if necessary, a managing director, or several deputy managing directors.

- the modern corporation: consisting of a supervisory board and a management board.



Substantive conditions /Shareholders

The SA requires at least 7 shareholders. Failure to comply with this condition will result in a refusal to register the company at the time of incorporation and, during its life, in the dissolution of the company. The judge may grant a 6-month period for regularisation.        

The combination of contributions in the share capitalThe SA is a capital company, so contributions in kind are excluded. All contributions contribute to the formation of the share capital. The requirement for a higher minimum share capital (EUR 225,000) has been abolished for companies whose securities are admitted to trading on a regulated market or which make public offers.Par value of shares : The par value of the share may or may not be determined :- if the articles of association determine the par value of the share, it is impossible to issue shares below par, i.e. for an amount lower than the par value, without amending the articles of association; if the nominal value of the share is not determined, the shares are unit securities; the theoretical value of the share is equal to the amount obtained by dividing the capital by the number of shares.        

In-kind contributions / Valuation control

A contribution auditor appointed by the president of the commercial court must evaluate the contributions in kind. A report by this auditor must detail the valuation method used and the value given to the contribution in kind in order to avoid under- or over-valuation of the contribution. The shareholders themselves must determine the value attributed to the contribution. They do not incur special civil liability as in the SARL, but they may incur criminal liability for overvaluation of the contribution. In companies which are formed with a public offering of securities, the valuation of the value of the contributions in kind and of the special advantages, made by the commissaires, can only be reduced by a unanimous decision of the partners. Without the express approval of the contributors or the beneficiaries of the benefits, the company shall not be formed. Contributions in kind must be immediately paid up. Special benefits are subject to the same control procedure as contributions in kind. They are granted to certain shareholders in return for services rendered at the time of the incorporation of the company or during the life of the company, at the time of an increase in capital, a transformation or a merger. No sanctions are provided for if the procedure for the control of special advantages was not complied with at the time of incorporation of the company (except for the company incorporated by public offering). Control of the purchase by the company of an asset belonging to a shareholder within two years of its creation: there is an obligation to have the asset valued by an acquisition auditor appointed by the commercial court at the request of the chairman of the board of directors (or the management board) if the asset has a value equal to or greater than 1/10 of the share capital The penalty for non-compliance with the procedure is the nullity of the sale.        

Cash contributions / Subscribed funds are deposited with an approved depository before any registration.

After registration, the funds are withdrawn by the company or by a shareholder if the company is not registered within 6 months of the filing of the draft statute with the RCS, or by an ad hoc agent. Half of the contributions must be paid up upon subscription; the remainder must be paid up within 5 years upon call by the management.

Sanctions: there are no longer any criminal sanctions for irregular subscriptions since the NRE law:

- the rights attached to the shares are suspended (access to the GM, voting rights, dividend rights, DPS);

- the shareholder is sued for payment ;

- the directors may be subject to a court order to do so under penalty;        

in listed companies, sanction of execution on the stock exchange (forced sale).

Formal requirements

The articles of association must be signed by the shareholders. The first members of the administrative and supervisory bodies must be designated in the articles of association (the first directors or members of the CS; the first CAC). The CEO (or the management board or the DGU) is responsible for carrying out the publicity formalities: notice of creation published in a legal gazette, application for registration with the RCS, which must first be submitted to the Centre de Formation des Entreprises (Business Training Centre), filing of the deeds with the RCS (articles of association, appointment of directors, certificate from the depositary of funds, report from the auditors)        


The conversion requires that the converting company has at least 7 partners and that its share capital is not less than EUR 37,000. In addition, there are some conditions specific to the conversion into a public limited company. Control of the equity, assets and special benefits. The appointment of a conversion auditor when a company converts into a joint stock company (and thus into a public limited company) is mandatory, unless the company has an auditor who will carry out the audit procedures. This auditor is appointed unanimously by the partners or by the president of the commercial court ruling on a request. The auditor's task is to assess, under his responsibility, the value of the assets of the company and the special benefits, in a report which certifies that the amount of equity is at least equal to the share capital.

The general meeting of shareholders then decides on this report; it can only change the valuation by unanimous vote. The sanction for failure to approve the report is the nullity of the transformation

Conversion of a SARL or SCA into a SA :

- the unanimity rule for the transformation of a limited liability company is relaxed when it is transformed into a public limited company and its equity capital is at least equal to EUR 750,000;

- the decision to convert is then taken by a majority of the shares. If the converting company is an SCA, the decision to convert is taken by a majority of the general partners.

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