What is the Difference Between SA and SARL?
Switzerland is one of the top offshore business destinations, widely preferred by business owners and investors. Under French law, the widely chosen business forms in the jurisdiction are Société Anonyme (Public Limited Company or PLC) and Société à Responsabilité Limitée (Limited Liability Company). If you are also planning to set up an offshore company in Switzerland, understanding the differences between an SA and an SARL would be helpful. Let's compare the two in detail.
What is a Société Anonyme (S.A.)?
Société Anonyme (Public Limited Company or PLC) is a popular business vehicle for entities seeking to expand and maintain a sizable management team that supports extensive operations. It is equivalent to the public limited company and exhibits the same characteristics. S.A. can engage in public share trading by listing its stocks on reputable stock exchanges. Such benefits often make them prone to rigorous compliance and reporting requirements.
What is a Société à Responsabilité Limitée (S.A.R.L.)?
Similar to a limited liability company, a Société à Responsabilité Limitée (S.A.R.L.) is an ideal structure for small and moderately-sized companies seeking to operate with limited liability. S.A.R.L. bears the same characteristics as the LLP, offering much-needed flexibility and protection to the active members. Additionally, it provides the potential for expansion by allowing the business owner to accommodate up to 100 members.
SA vs SARL: Understanding Key Differences
| Basis | Société Anonyme (S.A.) | Société à Responsabilité Limitée (S.A.R.L.) |
|---|---|---|
| Type of company | Public Limited Company (PLC) | Limited Liability Company (LLC) |
| Minimum number of partners | Two (2) [Unlisted Company], Seven (7) [Listed Company] | Two (2) |
| Maximum number of partners | Not Specified | One hundred (100) |
| Share capital | Above 37,000 Euros | Above 1 Euro |
| Tax system followed | Corporation Tax | Corporation Tax |
| Type of contributions | In-cash and in-kind | In-cash, in-kind, and in-industry |
| Payment of dividends | Gets determined in the General Meeting of the Shareholders | Gets determined by the number of shares held by each partner |
| Ideal For | Profit-oriented business | SMEs and Family Businesses |
| Presence of local director | A director with individual signing powers must be a domiciled citizen of Switzerland | A director with individual signing powers must be a domiciled citizen of Switzerland |
| The name of the panel of directors | Conseil d’administration | Collège de gérants |
| Approx. entities in Switzerland | 112,518 | 92,000 |
| Possibility of getting listed on the stock exchange | Yes | No |
| The nominal value of shares | Minimum of 1 cent | Minimum of 100 francs |
| Registration with the Registrar | Upon establishment, you must register the company’s name in the commercial register. | Upon establishment, you must record its name in the trade register. |
| The business entity is managed by | The Board of Directors | One or more managers (can be a partner or even a third party) |
| The extent of the partner’s liability | Limited to the share capital | Limited to the shares |
| The extent of the responsibility of leaders | Civil and Criminal Liability of the Manager(s) | Civil and Criminal Liability of the Manager(s) |
| Transmission of business | By transfer of shares, unless provided in the Articles of Association | By transfer of shares |
| Process of transfer of shares | Simple and straightforward | A notary must witness the signing of the sales contract of shares |
| Disclosure of shareholders’ names | Not disclosed (Remains Anonymous) | Names of the shareholders appear in the local commercial register |
| Conversion of a business entity | Can be converted to SARL at any point | Can be converted to SA at any point |
Key Takeaways
- Factoring in operational footprint, growth goals, taxes, and compliance requirements is crucial when selecting between the S.A. and S.A.R.L.
- The high initial capital makes S.A. an unviable option for startups and budget-conscious entities.
- S.A. can accommodate any number of shareholders, enabling broader ownership and growth. On the contrary, S.A.R.L. has a limited potential in this regard.
- Both structures excel in terms of limited liability and management stability.
- Fund procurement is more straightforward with S.A., as it can undergo public share trading. S.A.R.L. does not offer such flexibility.
- Depending on the compliance and paperwork involved, the duration to register such entities with the commercial register may vary from 5 to 60 days.
Switzerland offshore company formation is a strategic and wise move when it comes to investments. Business investors at a global level prefer to incorporate a Swiss offshore company with the guidance of business experts to streamline the documentation process. At Business Setup Worldwide, we handle the SARL company proceedings to support our business investors in establishing their business foundations. Our expert team will assist you in setting up your Société Anonyme or Société à Responsabilité Limitée company in Switzerland. For more information, please don’t hesitate to speak with our business advisors. Contact us today!
