What does SARL mean?
SARL stands for société à responsabilité limitée, the limited liability company of French law. Article L223-1 of the French Commercial Code (Code de commerce), checked October 2026, defines it in one sentence: a company formed by one or more persons who bear losses only up to their contributions. Its name must be followed or preceded by the words société à responsabilité limitée or the initials SARL, and by the amount of its capital.
One form, two names
When the SARL has a single partner, that person is called the associé unique and the company is commonly called an EURL, entreprise unipersonnelle à responsabilité limitée. The EURL is not a separate form: it is a SARL with one partner, to which a few rules of the chapter do not apply (article L223-31). A SARL can therefore start with one partner and welcome others later, or shrink to one without changing form (article 1844-5 of the French Civil Code, Code civil).
Where it sits among the French forms
The SARL is the structure of the frame: the Code sets the rules on management, decisions and transfers of shares, and the partners adjust them within limits. The SAS, société par actions simplifiée, is the structure of freedom, in which the statuts write almost everything. The comparison between the two, and with the sole trader status and the branch of a foreign company, is the subject of the guide to starting a business in France.
Is a SARL the French equivalent of an LLC?
It is the closest French form to a limited liability company, and the comparison helps as long as it stops at the right place. Both limit the owners’ risk to what they put in. Both have owners who hold interests that are not freely transferable to outsiders. Both can have one owner. The differences lie in how the company is run and taxed.
| Feature | SARL | What an LLC usually has |
|---|---|---|
| Owners | Partners, one to one hundred, holding equal shares called parts sociales (articles L223-1, L223-2, L223-3) | Members holding membership interests, without a legal ceiling in most states |
| Governing document | The statuts, filed with the registry and public | An operating agreement, usually private |
| Management | One or more gérants, always natural persons (article L223-18) | Members or managers, who may be companies |
| Legal existence | From registration in the trade and companies register (article L210-6) | From filing with the state |
| Tax by default | Corporate tax (article 206 of the tax code); options for the partnership regime exist | Taxed through its owners by default under US federal rules, with an election possible |
| Rules set by law | Many: majorities, transfers, revocation of the gérant | Few: most rules come from the operating agreement |
Who owns a SARL, and what do they risk?
The partners own the company through parts sociales, shares of equal value into which the capital is divided (article L223-2). There can be one partner and at most one hundred; a SARL that exceeds one hundred partners has a year to come back under the ceiling or change form, failing which it is dissolved (article L223-3).
Capital and payment
The amount of the capital is fixed by the statuts and the Code sets no minimum (article L223-2). The shares are all subscribed when the company is formed. Shares paid in kind are paid in full. Shares paid in cash are paid at least one fifth at formation, the balance in one or more instalments decided by the gérant within five years of registration (article L223-7). A contribution in kind is valued in the statuts on the report of a commissaire aux apports, unless the partners unanimously decide to do without one for contributions under a threshold fixed by decree that together stay under half of the capital (article L223-9).
Limited liability, and its exception
Each partner bears the losses only up to their contribution (article L223-1). A creditor of the company has no claim on the partner’s house or savings. The exception is contractual: a bank or a landlord who asks for a personal guarantee obtains exactly what the law withholds. The guarantee, not the form, is where a founder’s personal assets come back into play.
How are decisions taken?
The partners decide in meetings, or, when the statuts allow it, by written consultation or by a deed signed by all of them (article L223-27). The Code fixes the majorities; the statuts can raise some of them and not others.
| Decision | Majority required | Legal basis, checked October 2026 |
|---|---|---|
| Ordinary decisions, including the accounts and the appointment of the gérant | More than half of the shares; on a second consultation, the majority of the votes cast, unless the statuts say otherwise | Article L223-29 |
| Changes to the statuts, companies formed since August 2005 | Two thirds of the shares held by the partners present or represented, with a quorum of one quarter, then one fifth | Article L223-30 |
| Changes to the statuts, older companies | Three quarters of the shares; a clause requiring more is void | Article L223-30 |
| Moving the registered office | More than half of the shares | Article L223-30 |
| Changing the nationality of the company | Unanimity | Article L223-30 |
The accounts of each financial year are submitted to the partners within six months of the year end, with the gérant’s management report and the inventory (article L223-26). If the meeting is not held, any interested person can ask the court to order the gérant to call it. A decision taken in breach of these rules can be annulled at the request of any interested person.
Who runs a SARL?
The company is run by one or more gérants, who are always natural persons and may or may not be partners (article L223-18). They are appointed in the statuts or by a later decision of the partners, for the duration of the company unless the statuts say otherwise.
Powers, inside and outside
Between the partners, the gérant’s powers are those the statuts give them. Towards third parties, the gérant has the widest powers to act in the name of the company in all circumstances, and the company is bound even by acts that fall outside its object, unless it proves that the third party knew it; a clause limiting those powers cannot be invoked against third parties (article L223-18). The gérant answers to the company and to third parties for breaches of the law, breaches of the statuts and faults in management (article L223-22).
Revocation
The partners can revoke the gérant by the ordinary majority of article L223-29, or by a stronger majority if the statuts require one. A revocation without just cause gives rise to damages, and any partner can ask the court to revoke a gérant for a legitimate reason (article L223-25).
Social security of the gérant
The service-public.gouv.fr guide to the SARL, checked October 2026, draws the line that founders feel most: a gérant who, alone or with family members, holds more than half of the shares is covered by the social security scheme of the self-employed; a gérant who holds half or less is treated like an employee for social security, without the unemployment insurance of an employee. The calculation of contributions for a given founder is a question for the company’s accountant.
How are SARL shares transferred?
Shares can only be transferred to an outsider with the consent of a majority of the partners representing at least half of the shares, or more if the statuts require it (article L223-14). The plan to transfer is notified to the company and to each partner. If the company has not answered within three months of the last notification, consent is deemed given.
When the partners refuse
A refusal does not trap the seller. Within three months, the partners must buy the shares or have them bought at a price fixed, failing agreement, by a court-appointed valuer under article 1843-4 of the Civil Code, unless the seller gives up the sale. The company can also, with the seller’s consent, reduce its capital and buy the shares back, with a court able to grant it up to two years to pay (article L223-14).
How is a SARL taxed?
By default a SARL is subject to corporate tax, the impôt sur les sociétés (article 206 of the French tax code, Code général des impôts, checked October 2026). The company pays tax on its profit; the partners are taxed on what they receive as salary or dividends.
Two ways out of the default
Two options lead to the partnership regime of article 8, in which the profit is taxed directly in the partners’ hands. A SARL formed between members of the same family can opt for it. A young SARL can opt for it for five financial years under the conditions of article 239 bis AB: shares not listed, at least half of the capital and votes held by natural persons, and at least a third by its managers and their households. The option has consequences on social contributions and on losses that a founder cannot assess alone; it is the accountant’s question, taken before the first year end.
The EURL starts from the other side
An EURL whose single partner is a natural person is taxed by default through that partner, under the partnership regime of article 8; it can opt for corporate tax. An EURL whose single partner is a company is subject to corporate tax. The official guide to the EURL, checked October 2026, confirms both rules.
What does an EURL change?
The EURL changes the way decisions are taken, not the structure. The single partner exercises the powers of the meeting (article L223-1). The rules on meetings, written consultations and majorities do not apply (article L223-31). The partner’s decisions are recorded in a register; the gérant prepares the accounts, and the partner approves them within six months of the year end. When the single partner is also the only gérant, filing the signed accounts with the registry within that time counts as approval.
Lighter formalities
The Code provides model statuts for the EURL whose single partner, a natural person, is also its gérant; they apply unless the partner files different statuts (article L223-1). The same company benefits from lighter publication formalities. The filing of the accounts with the court registry remains due, within the time limit of article L232-22.
From one partner to several, and back
A SARL does not dissolve because all its shares come into one hand; it becomes an EURL (article 1844-5 of the Civil Code). The reverse is a transfer of shares to a new partner, under the rules of article L223-14 and the statuts. The form stays the same throughout, which is the practical reason founders who are unsure whether a partner will join often start with an EURL.
Concord drafts the statuts and handles the filing for an SAS or a SARL. The registration itself, from the deposit of the capital to the Kbis, is described in the guide to company registration in France.