SARL, abbreviated from Société à Responsabilité Limitée, is a French term that translates to "Limited Liability Company" in English. It is a business entity structure commonly used in France and other francophone countries. SARL is a legal form that allows a company to be established with limited liability for its shareholders.
In a SARL, the liability of shareholders is limited to the amount of their investment in the company, protecting them from personal liability for the debts and obligations of the company. This structure is similar to the Limited Liability Company (LLC) in other jurisdictions.
To establish a SARL, certain requirements must be met. One or more individuals or legal entities can form a SARL, with a minimum of one shareholder. The company's capital is divided into shares, and shareholders are liable for the company's debts up to the amount they have contributed.
Further, a SARL must have a Memorandum of Association, which outlines the company's purpose, management procedures, and other important details. The company must also register with the relevant governmental authorities and fulfill any legal obligations, such as submitting annual financial statements and tax returns.
SARLs are popular structures for small to medium-sized companies, as they offer a level of flexibility and protection for shareholders. They are often chosen by entrepreneurs who want to limit their personal liability while maintaining control over their business operations.
