The EURL is a SARL with a single partner : we detail here all the information necessary for its creation and operation.
EURL, Limited Liability Company with one partner, is a legal status widely used by entrepreneurs who start their own business.
In this dossier, we provide you with an exhaustive overview of the particularities of the EURL : corporate purpose, share capital and contributions, sole shareholder, management, etc.
The EURL is a SARL with a single partner : we reveal in this document all the information necessary for its establishment and operation.
What is allowed in an EURL?
Most activities are legal and possible in an EURL. On the other hand, there are exceptions to this rule. Insurance, capitalization and savings activities, and medical biology laboratories are prohibited in a SARL.
In addition, certain activities are exclusively reserved for other legal forms and cannot be carried out as a limited liability company. This is particularly the case for tobacconists, which must be operated in their own name or in a general partnership.
For more details on this subject, you can consult the specification of the corporate purpose of the EURLs.
Amount of share capital and contributions of the sole shareholder of an EURL
An EURL must necessarily have share capital, the amount being chosen freely by the sole shareholder in the articles of association. There is no minimum value and it is therefore possible to set up an EURL with a share capital of 1 euro.
The sole shareholder of the EURL can also opt for variable capital rather than fixed capital. In this case, the operating procedures must be detailed in the statutes.
The sole shareholder of an EURL can make contributions in cash and in kind, which contribute to the formation of the share capital, as well as contributions in industry.
In the event of contributions in kind on the occasion of the creation of an EURL, the sole shareholder may decide not to appoint a contribution auditor if the following two conditions are met:
- none of the goods contributed has a value greater than 30 euros,
- and the sum of contributions in kind does not represent more than half of the share capital.
For more information on this topic: contributions to the share capital of an EURL.
The sole owner of the EURL
An EURL cannot have only one owner, natural person or legal person. If there are several partners, it is a limited liability company. If the sole proprietor is a legal person, the profits are subject to corporation tax.
The sole proprietor receives shares in exchange for his share capital contributions. He exercises the powers normally vested in the shareholders' meeting in SARLs.
Thus, the sole proprietor makes unilateral decisions: the annual approval of the corporate accounts and the attribution of the result, changes in the corporate capital (increase and reduction), the change of corporate purpose, name change, relocation of the head office, dissolution – liquidation of the EURL, appointment of the manager, etc.
The sole proprietor holds several rights :
- the financial rights, in particular the dividends and the liquidation bonus, which he receives in full as sole shareholder,
- political rights, since he exercises the powers normally devolved to the meeting of partners in LLCs,
- the rights to information, with the right to permanent information and the right to information prior to each decision within its jurisdiction,
- as well as other rights, such as being able to ask questions of the manager, to be able to take legal action and to be able to request management expertise.
In return, the sole proprietor must pay the obligations following:
- he is bound by social liabilities within the limit of his contributions,
- and it undertakes to pay up the capital contributions provided for in the articles of association.
The legal representative of the EURL and his role
The manager and the legal representative of the single-person limited liability company. It must necessarily be appointed. He must be a natural person and can be the sole shareholder or an unassociated third party (compulsory when the sole shareholder is a legal person).
The manager represents the company vis-à-vis third parties and has the broadest power to act in all circumstances on behalf of the company.
With regard to the sole shareholder (if it is not the same person), he can take all the measures that prove necessary for the good of the company, however his powers may be limited by statutes. This limitation is not enforceable against third parties.
During social life, the manager of the EURL may be replaced in certain circumstances.
Tax on dividends earned by the EURL
By default, if the sole proprietor is a natural person, the EURL falls under the status of partnerships and profits are taxed directly to the sole proprietor's account.
However, a selection for IS is possible and cannot be undone.
Finally, if the sole proprietor is also the manager of the EURL and the company falls under the status of a partnership, an option for the micro-enterprise regime is possible.
If the sole proprietor is a legal person, the profits must absolutely be subject to corporation tax.
EURL Properties
Here are the main legal properties of the EURL :
- For constitute, the preparation of EURL statutes is obligatory. You must comply with several other formalities to obtain his registration.
- An EURL must have a corporate name. You can also indicate a commercial name as well as an abbreviation.
- A EURL must have a the head office, even if it is a simple direct debit.
- La lifespan of the EURL must be fixed in the articles of association, it is for a maximum of 99 years and can be extended to its term.
- The closing date of the financial year must be established in the statutes of the EURL. Each financial year has a duration of 12 months but a first financial year of a different duration (with a maximum duration of 2 calendar years) can be planned.
- Transfers of shares must be notified in writing.
- In EURL, the approval procedure normally applicable in SARL is irrelevant in the event of transfer of securities given that there is only one partner.
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