THE ANNUAL GENERAL MEETING IN THE S.A.S. (SOCIETE PAR ACTIONS SIMPLIFIEE) AND S.A.S.U. (SOCIETE PAR ACTIONS SIMPLIFIEE UNIPERSONNELLE)
The S.A.S. (or S.A.S.U.) is a social form more and more used because of the many attractions it has, the two main ones being:
- The flexibility of this type of company;
- The possibility for managers to benefit from the social security scheme for employees while holding the majority or all of the capital.
I - Operations to be carried out before the meeting
- Management report
First of all, small businesses are exempt from drawing up a management report. These are companies which, at the end of the last financial year, do not exceed two of the following three thresholds:
- € 6 million in balance sheet total;
- € 12 million in net sales;
- And 50 employees on average during the year.
However, the exemption is not applicable to the following entities:
- Credit institutions, finance companies and payment and electronic money institutions;
- Insurance companies, retirement institutions, mutual societies, etc;
- Companies whose securities are admitted to trading on a regulated market;
- Companies appealing to public generosity;
- Enterprises whose activity consists in managing equity securities.
Warning! In matters of S.A.S., it is advisable to always be attentive towards the drafting of the statutes. If the articles of association of a small company require that a management report be drawn up without further clarification, the manager must establish it.
This report is in principle drawn up by the president, but the statutes may designate another body. The management report must be written.
The main chapters that make up the report are as follows:
- Company situation;
- Predictable development;
- Important events occurring during the financial year or after the closing date of the financial year;
- Research and development activities of the company;
- List of branches;
- Accounting and financial information;
- Results of all subsidiaries, equity investments;
- Information on payment terms when the accounts are certified by an auditor;
- Declaration of extra-financial performance (for certain large companies).
- Other reports
We only quote the other reports, specifying that they are not mandatory for all S.A.S.:
- Report on regulated agreements: the chairman, or the auditor if there is one, presents to the partners a report on the agreements entered into directly or through an intermediary between the company and himself, one of its managers, one of its partners with a fraction of the voting rights greater than 10%;
- Report on stock options;
- Report on free allocation of shares;
- Statutory auditor's reports.
- Other operations
- Establishment and closing of accounts
At the end of each financial year, the chairman (the managing director or a collegial body, if the statutes so provide) of the S.A.S. must establish the inventory and the annual accounts. These documents, possibly accompanied by the management report, are made available to the statutory auditors (when there are any).
Companies that do not exceed two of the following three thresholds, € 20 million in balance sheet total, € 40 million in net turnover and 250 permanent employees, can adopt a simplified presentation of their income statement.
- Verification of the statutes in order to:
- Note the management body empowered to close the accounts and launch the A.G.M procedure;
- Retain the means best suited to consulting partners according to the options retained by the articles of association;
- Know the deadlines and methods of summoning associates;
- Know the procedures for monitoring shareholders' rights of communication: documents to be sent or made available to them, deadlines to be observed before the meeting;
- Check the possible rules of quorum and the majority conditions according to which the decision must be taken;
- Check the rules of representation;
- Check the conditions for the appointment or renewal of directors' mandates when some of them expire, or if a dismissal must be considered;
- Partners information
Nothing is provided for by law concerning SAS. However, the annual accounts, the text of the resolutions, and, where applicable, the management report, the auditor's reports as well as the consolidated accounts, the management report of the group and the report of the statutory auditors on the consolidated accounts are part of the minimum information due to the partners.
- Information for employee representatives
The articles of association designate the social body with which the social and economic committee (C.S.E.), if the S.A.S. employs at least 50 employees, can exercise its rights. Two of its members can attend the general meeting.
II - The general meeting
There are three methods of consulting associates, at least one of which is provided for in the statutes.
- Meeting of partners in assembly
Exceptional measures due to the Covid-19 health crisis: meetings can be held in camera when, on the date of the convening of the meeting or on that of its meeting, an administrative measure prevents the physical presence of the partners.
The chairman (or the management body designated for this purpose by the articles of association) convenes the shareholders' meeting as well as, where applicable, the auditor and the social and economic committee.
The articles of association determine the methods of convocation:
- By simple or registered letter, electronic mail or oral summons;
- The notice period.
- Participation and vote of associates
Any associate of S.A.S. has the right to participate in collective decisions. It is necessary to control the articles of association of the company in order to verify the terms of participation of certain partners such as bare owners, usufructuaries, etc.
We recommend to establish an attendance sheet as proof even if this is not an obligation.
- Written consultation
Exceptional measures due to the Covid-19 health crisis: the decision to approve the accounts can be taken by written consultation even if the statutes have not planned for it, provided that the conditions defined by decree 2020-418 of the April 10th 2020.
In case of written consultation, the text of the proposed decisions, a reply form and the documents necessary for informing the partners must be sent to each of them in writing. They must also be addressed to other persons having the right to attend the collective decisions of the SAS.
The decisions taken must be recorded in a report drawn up by the president which must mention:
- The date of the decisions;
- The text of the proposed decisions;
- Documents sent to partners;
- The date on which the documents and information were sent to the partners and the deadline given to them to respond;
- The identity of the partners who sent a response received by the expiry date of this period and the number of votes held by each of them;
- For each proposed decision, the result of the written consultation.
- Consent of partners in a deed
The partners can give their consent in a private or notarial deed, in paper or electronic form if the articles of association so provide. Decision making in a deed requires the signature of all partners to prove that each has been consulted.
Special case of a S.A.S.U.:
The sole shareholder approves (or rejects) the accounts within 6 months of the end of the financial year, after having possibly taken note of the auditor's report. He then decides on the allocation of the result and the possible distribution of a dividend in the event of distributable profit.
His decision is listed in a register, under penalty of nullity of decisions at the request of any interested party.
III - Formalities after the meeting
Any commercial company is required to file, within one month of the approval of the annual accounts or within two months in the event of electronic filing, in a single copy, at the clerk of the commercial court:
- The annual accounts (balance sheet, profit and loss account and, if applicable, the appendix), where applicable the report of the statutory auditors;
- The profit allocation proposal submitted to the collective decision of the partners and the allocation resolution voted on.
The management report does not have to be filed but is kept at the head office and is available to anyone who requests it.
Special case of a S.A.S.U.:
If the partner is a natural person and the president, he can approve the accounts by simply submitting the inventory and the duly signed annual accounts to the registry. This deposit must be made within 6 months of the end of the financial year. The president is then exempted from entering the receipt issued by the clerk of the commercial court in the register of decisions.
Confidentiality option on all accounts:
Micro-enterprises can, if they wish, declare that the annual accounts they file will not be made public to third parties. These are companies that do not exceed, for the last closed financial year and on an annual basis, two of the following three thresholds:
- € 350,000 in total balance sheet;
- € 700,000 in net turnover;
- 10 employees.
Profit and loss account confidentiality option:
Small businesses may not make their income statement public. This option concerns companies which do not exceed for the last closed financial year, and on an annual basis, two of the following three thresholds:
- € 6 million in balance sheet total;
- € 12 million in net sales;
- 50 permanent employees.
As usual, we are at your disposal if you need further information about this subject, so feel free to contact us!