To invest in real estate, we often think of setting up a Society Civil Immobiliser (SCI). However, this is not always adapted to the project, nor is it possible, especially for a partner. Fortunately, there are other forms of companies for real estate investing. Real estate SASU (Simplified One-Person Joint Stock Company) is one of them, especially if you have a commercial project. Have questions about SASU? Its advantages and limitations? What are the interesting options? Overview in this article.
Benefits of a Real Estate SASU
One of the advantages of real estate SASU is its flexibility of constitution and management. For the sole shareholder, it is also of interest in terms of liability and Social Security. You should also be aware that for a single partner with a commercial project, this is the ideal legal form. SASU is governed by Article L 227-1 of the Commercial Code.
1 – Constitution and flexible management
no minimum share capital
The law does not impose a minimum share capital with respect to the creation of a SASU. it’s free. However, for a SASU to qualify as a real estate SASU, the sole shareholder must contribute real estate to the share capital during incorporation. Who says that the contribution in kind also says the appointment of the Commissioner of Contribution. Please note that under certain conditions defined in Article L227-1 of the Commercial Code (contribution in kind does not exceed half of the share capital or the value of the contributed asset is less than €30,000), no liability for Don’t use it.
Who Says Real Estate SASU Says Unique Partner! This is an advantage in case of management as all the decisions are made by a single person. The sole responsibility on him is to appoint a Chairman (who can be himself). For the rest, he enjoys great contractual freedom. He alone can define the management positions of the company and make decisions in the same way. Hence there is no risk of interruption of operations due to disagreement between the partners. This is especially an advantage compared to SCI or SARL which requires at least two partners.
2 – Limited Liability
In the context of a real estate SASU, the sole shareholder’s liability is limited to the amount of the contribution. This is a reassuring point that limits financial risk. It is also an advantage to negotiate a bank loan. However, like any company, its liability can escalate in the event of mismanagement.
3 – Social coverage
Are you the president of your SASU? Note that you benefit from a social arrangement for “consolidated employees” under your corporate office. The advantage of this arrangement is provided in Article L.311-3 al. 23. Condition of Social Security Code to receive income from the company. In the absence of income, there would be no Social Security (be careful not to take the trouble to define the terms of the manager’s remuneration in the Articles of Affiliation). This affiliation allows you to benefit from general plan (health insurance and retirement) benefits, with the exception of unemployment insurance (you can take out voluntary insurance). SASU makes it possible to benefit from a protective social system.
4 – Possibility of a commercial project
Unlike SCI whose objective is civilian, the purpose of SASU is the holding, management and operation of immovable property. It is therefore a business object, involving specific management obligations, especially from an accounting standpoint. Formation of a real estate SASU is therefore the ideal form of company for a commercial real estate activity (buy-resale, furnished rental, seasonal rental, etc.).
Limitations of a SASU for a Real Estate Project
Despite the many benefits it offers, real estate SASU also has some disadvantages.
1 – Double Taxation (IR/IS)
Unlike other forms of companies (especially SCI), SASU is subject to double taxation. In fact, it is subject to the right of corporation tax (IS) by default. Therefore, the income of the company will be taxed on its net income. If the sole partner pays dividends to himself, he will also be taxed on the income, resulting in a double level of taxation that will limit the profitability of the operation.
For information, the provision of Article 239 BIS AB of the CGI provides the possibility for SAS to be subject to tax regime for a partnership (IR) for a period of five years, not applicable in the context of management of its assets.
nice to know
Since January 1, 2020, dividends have been subject to a one-time flat tax (also known as flat tax) of 30%.
To limit the impact, you can be sure to reduce the corporate tax base to benefit from a reduced rate of 15% on fractions not exceeding €38,120 (paragraph 219 IB of the CGI). In addition, 25% tax will be levied on the results.
To reduce the taxable result, you can pass your assets to your heirs (if applicable), create multiple SAS if necessary, or reinvest your profits under particularly advantageous tax terms. .
Due to its heavy management and accounting obligations (commercial accounting, filing annual accounts) compared to SCI, it is strongly recommended to call a professional in the context of managing a real estate SAS, which has a disadvantage due to the high cost. .
2 – Precise formatting of methods
Very rarely framed by the provisions of the Commercial Code, the drafting of statutes is relatively free in the case of SASU. The downside of this flexibility is that the articles of association must be carefully drawn up to prevent any subsequent risk (interruption, legal and financial risk) and to better prepare the operation and management of the SASU. It is strongly advised to stay with (Notary, Lawyer, Legaltech) to protect yourself.
nice to know
As the President of SASU, you yourself decide on the amount of your remuneration. It must appear in the articles of association or minutes. That is, it must be fair, failing which the manager exposes himself to the fault of the management in the event of the bankruptcy of the company.
3 – Higher Social Security Contribution
In the event of a SASU manager’s remuneration, they will be considered an “integrated employee”. The manager, like any employee, must pay the salary portion of the social security contribution (CSG, CRDS, CEG, etc.). SASU, as the employer, will pay the employer’s share and Urssaf will pay all the contributions itself. The Social Security contribution for a manager of a real estate SASU is high (about 65% of the salary received). The manager’s remuneration can then become a major expense for SASU. However this loss can be avoided if the latter chooses to pay dividend instead of salary. It is a different mode of remuneration as it depends on profits and is paid annually (and not like monthly salary). However, beware of the risk to the manager, who in this case would not benefit from any Social Security coverage.
Alternatives to Real Estate SASU
Real estate SASU, although a completely relevant form in the context of a professional real estate project, is not the only possibility. Brief description of possible options.
Forming an SCI can be an interesting alternative to a SASU in the context of a real estate investment, provided it is project-friendly and meets the required conditions. In what cases should SCI prefer SASU?
Terms of Incorporation and Corporate Purpose SCI
The main differences between SCI and SASU relate to the number of partners required and the corporate purpose at the company formation stage. Unlike a SASU, an SCI requires at least two partners to form, whereas a SASU can be formed with a single manager.
With respect to the corporate purpose, SCI has a citizen, whereas SASU has a commercial purpose. Hence it is not possible to do commercial activity with SCI. In addition, the choice of an SCI is relevant if you wish to transmit and manage a real estate inheritance. In contrast, to start a real estate investment activity with regular purchase and resale, SASU would be the appropriate form (it is only sometimes authorized with SCI).
At the management level, SCI has the advantage of not publishing the financial statements at the end of the financial year.
Partners of an SCI are taxed on income (unless they choose IS, mandatory in some cases such as furnished rent). The SASU is subject to IS (unless the conditions are met, the IR is elected for a maximum period of five years).
Liability of Partners
The liability of the partners is unlimited within the framework of SCI, limited to the contribution of the sole partner of SASU.
Like SCI, SARL’s constitution requires at least two partners. However, it is possible to form an LLC with a sole partner (EURL).
Likewise, SARL’s statutes are imposed by law and are therefore less flexible than those of SASU (Article L. 223-1 and the Commercial Code).
SARL is an interesting option to start a business activity with family (then we talk about family SARL). This situation would make it possible to benefit from a favorable tax regime, especially in the context of an LMNP activity (non-professional furnished rental).
It is subject to IS by default and IR (Unlimited for one family SARL) on option for 5 years. For SASUs and SAS, this is subject to management rules (obligation to file accounts, obligation to keep commercial accounts).
For starting a business activity with multiple people, SAS will be more suitable than SASU, which is intended for single partner.
Creating a real estate SAS allows you to enjoy the same benefits as a SASU:
- Flexibility in terms of law and operation (we advise you to stick together to avoid loss of statutory independence);
- Limited shareholder liability.
For SASU and SARL, operating costs will be higher than for SCI due to management of accounting obligations, which require the use of a professional (notary, lawyer, chartered accountant, legaltech).
|SAS (or SASU) real estate||real estate llc||SCI|
|Methods||Certain regulated, significant freedoms by the Commercial Code||strictly supervised (Article L.223-1 of the Commercial Code and the following)||Formulated by law (Article 1835 of the Civil Code)|
|number of partners||SAS: 2 min, SASU: 1||2 or more||2 or more|
|type of activity||Citizen||commercial||commercial|
|share capital||Minimum real estate contribution||no minimum||no minimum|
|Liability of Partners||limited to contribution||limited to contribution||Unlimited|
|accounting liability||Commitment Accounting + Filing Annual Accounts||Commitment Accounting + Filing Annual Accounts||Cash accounting unless IS is an option (commercial accounting + filing annual accounts)|
|to tax||Double Taxation (IS for Company and IR on Dividend)||Double taxation (IS for the company and IR on dividend), IR option if the family SARL||IR (is on option)|
questions to ask
Families SARL or SCI to invest with loved ones?
Everything will depend on your project. If its a legacy business, SCI would be more suitable, while FAMILY SARL, as a commercial company, would be more suitable for a large scale project (sale/rental/real estate complex).
Should an auditor be involved when creating a real estate SASU?
For a SASU to qualify as a real estate company, it must provide assets (commodity contributions). If its value exceeds €30,000 or half of the share capital, it will be necessary to call the Commissioner of Contributions to assess the asset.
What are the options for real estate SASU?
There are 3 interesting options for real estate SASUs: SCI, SARL and SAS.