The Société par Actions Simplifiée (Simplified Joint Stock Company - SAS)
The Société par Actions Simplifiée (SAS) is a form of company very comparable to the Société Anonyme (Public Limited Company [SA]), which was introduced into the Luxembourg legal system in 2016 after the Luxembourg legislator had observed the success of the French SAS.
However, the Luxembourg SAS never achieved the same success as its French counterpart, mainly because the Luxembourg SA (which the SAS was competing with) already offered the possibilities of liberal drafting of the articles of association which the French SA was so lacking and which the French SAS succeeded in providing.
THE CREATION OF AN SAS
The creation of a Luxembourg SAS follows the same formalities as the creation of a SA and must obligatorily involve a notary.
A minimum of one partner is required to set up an SAS. This partner may be a natural person or a legal entity. We speak of "partners" rather than "shareholders" when referring to the owners of an SAS.
An SAS may however not perform a public issue of shares.
The capital of an SAS is at least €30,000.
MANAGEMENT OF AN SAS
An SAS is managed by a Chairman, who has the broadest powers to bind the SAS even in acts which go beyond the corporate purpose of the SAS (unless it can be proved that third parties who have contracted with the SAS knew that the Chairman was committing the SAS beyond its corporate purpose)1.
The Articles of Association of an SAS may not limit the powers of its Chairman2.
The Articles of Association may provide for the appointment of Directors who then have the same powers as the Chairman.
The Articles of Association also set out the conditions under which the SAS is managed3, and it is then possible to create an SAS in which the Chairman may not be dismissed.
A legal entity may be appointed Chairman of an SAS provided that it appoints a natural person as its permanent representative. The natural person appointed then incurs the same responsibility as if they were directly Chairman of the SAS4.
THE TRANSFER OF SHARES IN AN SAS
Share transfers made in violation of the provisions of the articles of association of an SAS are null and void5 (which is not the case for an SA). This then makes it possible to include clauses in the articles of association of an SAS which organise the control of capital ownership much more effectively than when these clauses simply appear in a shareholders' agreement (because this agreement is unenforceable against third parties).
THE GENERAL MEETING OF PARTNERS OF AN SAS
A collective decision of the partners (under the conditions to be set by the Articles of Association of an SAS) is required to decide on the following matters:
- increase, amortisation or reduction of the share capital;
- merger, demerger;
- transformation into another form of company;
- Appointment of the auditor;
- approval of the annual financial statements;
For other matters, it is the Articles of Association which determine6decisions which fall within the sphere of decision of the partners (e.g. the appointment, re-appointment or dismissal of the Chairman) and which then determine the rules of collective decision-making: general meeting or written resolution of the members, majority rules, quorum rules, etc.
1 article 500-4 LSC
2 article 500-4 LSC
3 article 500-3 LSC
4 article 500-5 LSC
5 article 500-9 LSC
6 article 500-7 LSC