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The annual general meeting in the S.A.S. and S.A.S.U.

The annual general meeting in the S.A.S.

Article of 30/06/2021 updated on 15/05/2022

The S.A.S. (or S.A.S.U.) is one of the more used social form 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 – Some general remarks

    1.  Exceptional measures until July 31st 2022

The law of January 22nd 2022 introduced adjustments applicable until July 31st 2022 inclusive.

Thus, the members of the governing bodies can take part in collegial meetings by telephone or audiovisual conference. No clause in the articles of association or internal regulations is necessary.

Furthermore, the decisions of the collegiate bodies may be taken by way of written consultation without a clause in the statutes or internal regulations being necessary.

    1. A flexible schedule

Article L. 227-9 al. 2 of the Commercial Code specifies: “The examination of the accounts, their approval or their modification are imperatively the subject of a collective decision under the conditions and deadlines provided for in the articles of association.”

In addition, the holding of a general meeting is not mandatory, the decision can be taken by other means provided for in the articles of association.

The schedule established for “Sociétés Anonymes” companies is not imposed on SAS; the statutes set their own timetable. The following operations may therefore be carried out within the time limits provided for in the articles of association:

  • Notice, where applicable, to the statutory auditors of regulated agreements entered into during the past financial year;
  • Establishment by the president (or the body responsible for closing the accounts) of the inventory and the annual accounts;
  • Convocation of the partners under the formal conditions provided for by the articles of association and sending or making available to them, according to the articles of association, the documents submitted to the meeting;
  • Convocation of the social and economic committee if the SAS employs at least 50 employees.


II – Operations to be carried out before the meeting

    1. 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;
  • 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 management report is not published at the registry of the commercial court, but it is kept at the registered office at the disposal of any person who requests it.

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).


    1. 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.


    1. 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;
    • Etc.


  • 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.


III – The general meeting

There are three methods of consulting associates, at least one of which is provided for in the statutes.

    1. Meeting of partners in assembly

  • Convocation

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.

In any case, the convocation must specify the place, date and time of the meeting of the assembly; it will contain the agenda (approval of the accounts, allocation of earnings, distribution of dividends, regulated agreements, any other question such as the renewal of a term of office as a manager or statutory auditor), the annual accounts, the text of the resolutions.

Where applicable, it will also contain the management report, the auditor’s report, the consolidated accounts, the group’s management report and the auditor’s report on the consolidated accounts.

  • 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.

When the statutes allow it, it is possible to consult the partners remotely. Two methods are possible:

  • Participation by videoconference;
  • Postal voting.


    1. Written consultation

In case of written consultation (if the statutes allow it), 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.


    1. 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.


IV – Formalities after the meeting

1. Publication of accounts at the registry of the commercial court

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.


2. Confidentiality option on all accounts

  • All accounts confidentiality option

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.


V- The legal consequences of economic difficulties

    1. Loss of half of the share capital

  • Definition of the loss of half of the share capital

It is recognized when the amount of shareholders’ equity becomes, taking into account the cumulative losses recorded in the liabilities of the balance sheet, less than half of the company’s share capital.

Equity is equal to the sum of capital contributions (share capital and issue premiums), revaluation differences, undistributed profits, losses, investment subsidies and regulated provisions.

  • Compulsory procedure following the finding of this amount of loss
  • Consultation of the partners on the continuation of the activity or the dissolution

The manager must therefore convene the partners in an ordinary general meeting within 4 months following the approval of the accounts showing the loss.

During this meeting, the partners have the choice between:

    • – Deciding on the early dissolution of the company,
    • – Or decide to continue the activity while waiting to reconstitute the equity so that it is again greater than half of the share capital.


  • Formalities to be carried out following the consultation of the partners

When the partners decide to continue the activity despite the losses, an advertisement must be inserted in a journal of legal notices.

Then, the decision taken by the partners must be filed with the registry of the commercial court. The mention of the loss of half of the share capital will appear on the Kbis extract of the company and will be visible by third parties.

When the partners decide on the early dissolution of the company, the steps to follow are those of the dissolution-liquidation procedure.

  • The consequences of the decision taken by the general meeting
  • If the partners decide to continue the activity despite the losses

In this case, they must regularize the situation no later than the end of the second financial year following that during which the loss of half of the share capital was recorded.

Regularization can take place by making sufficient profits, by increasing the share capital, by reducing it, or by abandoning the partner’s current account (you can read the comment in the next paragraph on this subject).

When the situation is not regularized at the end of the period provided for, any interested party may apply to the courts for the dissolution of the company. The court may grant a maximum period of 6 months to regularize the situation.

  • If the partners decide to dissolve the company early

In this case it is an extraordinary decision, it is therefore necessary to respect the conditions required by the statutes for this type of deliberation. This meeting may be held without notice, directly following the ordinary general meeting relating to the loss of half of the share capital.


    1. The abandonment of a partner’s current account with (or not) return to better fortune clause

As we saw in the previous paragraph, it is possible to reconstitute the capital, if a partner who has a current account of a sufficient amount in the company, agrees to abandon it.

  • Consequences of abandoning a partner’s current account

The amount of debt represented by this current account will no longer appear on the liability side of the company’s balance sheet and the financial situation will be improved accordingly.

The result of the company will be increased by the amount of the abandonment of the partner’s current account, which constitutes a taxable product.

The capital will be reinforced and, if the amount lost is sufficient, the total losses can become less than half of the capital.

The partner who makes the abandonment in the partner’s current account loses the claim he had on the company. He will no longer be able to claim reimbursement of the amount he has abandoned.

  • Better fortune Clause

This clause allows the partner who abandons all or part of his partner’s current account to subsequently obtain reimbursement of the abandoned debt, if the company’s situation improves.

When the claw back clause applies, the reimbursements made constitute an exceptional expense deductible from the company’s results. The profit is therefore reduced by the amount of the reimbursement.

  • Formalities

The abandonment of an associate current account does not require any formality. On the other hand, the clause of return to better fortune must always be the subject of a written act.

This agreement must be signed by the partner concerned and by the legal representative of the company. It will include:

    • – The abandonment of a partner’s current account and its terms (identity of the partner, amount abandoned, etc.);
    • – The claw back clause and its terms.


As usual, we are at your disposal if you need further information about this subject, so feel free to contact us!

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