Comparison between SA and SARL

SA and SARL: the comparison

When deciding to create a company, one always comes up against the choice of legal form. While an LLC and an SA have many similarities, there are still points of divergence that it would be important to compare in order to make the best possible decision. In the case of a small project, it is better to opt for an LLC-type structure.

The number of partners and the starting capital

For starters, the most notable difference concerns the number of shareholders. Indeed, an SARL can be created by a single person and will rather be named EURL. For an SA, on the other hand, a minimum of 7 partners is required. In addition, if no shareholder limit is set for SAs, the LLC can only have 100 at most. For the creation of an SA, it is imperative to have a minimum capital of CHF 50,000. For an LLC, there is no obligation regarding the starting capital.

Regarding the contributions

An LLC can receive contributions in cash as well as in industry or in kind. On the other hand, it is forbidden to make contributions in industry in an SA. The latter is stricter concerning the assessment by a contribution auditor on contributions in kind. Assets contributed to an LLC will not necessarily be subject to this type of valuation if none of the assets has a value greater than CHF 20,000 or if the total contributions in kind do not exceed half of the share capital.

In terms of taxation

With regard to the taxation on profits, the two types of legal forms follow the same regime. This means that LLCs and SAs are liable to corporate tax by default. It is possible to take the temporary option for 5 years for the partnership regime. SARLs made up of members of the same family may benefit from a special regime allowing them to benefit permanently from the regime of partnerships.

The social status of the directors and the functioning

There is a major difference between the social status of the manager of SA and SARL. A manager of SA will necessarily be considered an employee while for an LLC, it will depend on its percentage of ownership in the company. Thus, the latter could be assimilated as an employee or a self-employed person. Regarding the functioning of the company, it should be noted that that of the SA is much heavier than that of the SARL. In the latter, the manager is responsible for management decisions and the shareholders’ meeting will take important decisions such as amending the articles of association. For SA, there are multiple internal bodies, headed by the board of directors.

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