In this article, we have explored how to choose the appropriate legal structure when starting a business. Now, let’s calculate the financial metrics for SARL and SAS companies to evaluate their efficiency under different profit distribution methods. Assume your financial plan projects an annual revenue of 100,000 €, with costs amounting to 60% of revenue during the early years of your startup.

Initial Data:

• Revenue: 100,000 €
• Costs: 100,000 × 60% = 60,000 €
• Pre-tax Profit: 100,000 - 60,000 = 40,000 €

We will perform calculations for two scenarios: profit distribution via dividends and full profit payout to the director as a salary.

Calculation 1: Profit Distribution via Dividends

For SARL:

1. Corporate Tax (Impôt sur les Sociétés):

   The first €40,000 of profit is taxed at 15%:

   • €40,000 × 15% = €6,000

   Profit after corporate tax:

   • €40,000 − €6,000 = €34,000
2. Dividend Taxes:

   Assume the company's equity is €10,000

   • Non-taxable base for dividends: 10% × €10,000 = €1,000
   • Remaining amount: €34,000 − €1,000 = €33,000

   Taxes:

   • Flat Tax (30%) on €1,000: €1,000 × 30% = €300
   • Flat Tax (30%) on €33,000: €33,000 × 30% = €9,900
   • Social Contributions (45%) on €33,000: €33,000 × 45% = €14,850

   Total tax on dividends:

   • €300 + €9,900 + €14,850 = €25,050

Total Taxes (SARL):

• Corporate Tax: €6,000
• Dividend Tax: €25,050
• Total Tax: €6,000 + €25,050 = €31,050

Net Profit:

€100,000 − €60,000 − €31,050 = €8,950

For SAS:

1. Corporate Tax (Impôt sur les Sociétés):

   On €40,000 of profit:

   • €40,000 × 15% = €6,000

   Profit after corporate tax:

   • €40,000 − €6,000 = €34,000
2. Dividend Taxes (Flat Tax):

   In SAS, dividends are taxed only with the Flat Tax (30%):

   • €34,000 × 30% = €10,200

Total Taxes (SAS):

• Corporate Tax: €6,000
• Dividend Tax: €10,200
• Total Tax: €6,000 + €10,200 = €16,200

Net Profit:

€100,000 − €60,000 − €16,200 = €23,800

Comparison of SARL and SAS:

SARL: Net Profit €8,950

SAS: Net Profit €23,800

Calculation 2: Full Profit Payout to Director as Salary

• Social Contributions:
  • For SARL (majority manager): ~45–50% of the gross salary
  • For SAS: ~65–70% of the gross salary
• Income Tax:

  Calculated based on the standard progressive income tax rates in France

For SARL:

1. Social Contributions:
   • On a salary of €40,000
   • €40,000 × 50% = €20,000 (social contributions for both employer and employee)
   • After social contributions: €40,000 − €20,000 = €20,000
2. Income Tax:
   • For €20,000
   • Taxable base: €20,000 − €10,777 (tax-free minimum) = €9,223
   • Tax: €9,223 × 11% = €1,014.53
   • After income tax: €20,000 − €1,014.53 = €18,985.47

For SAS:

1. Social Contributions:
   • On a salary of €40,000
   • €40,000 × 70% = €28,000 (social contributions for both employer and employee)
   • After social contributions: €40,000 − €28,000 = €12,000
2. Income Tax:
   • For €12,000
   • Taxable base: €12,000 − €10,777 (tax-free minimum) = €1,223
   • Tax: €1,223 × 11% = €134.53
   • After income tax: €12,000 − €134.53 = €11,865.47

Net Profit Comparison:

SARL: Net Profit €18,985.47

SAS: Net Profit €11,865.47

Conclusion:

• For profit distribution via dividends, SAS is more advantageous due to lower dividend taxes
• For paying the entire profit as salary, SARL is more beneficial due to lower social contributions

The calculations above provide a general example for evaluating SARL and SAS financial structures. If you want to calculate financial metrics tailored to your specific situation, feel free to consult with Alex Finley. Alex can help you create a personalized financial plan considering your business goals and unique circumstances.