In brief: The SAS (Simplified Joint-Stock Company), introduced by Law No. 19-20 in Morocco, offers maximum governance flexibility with no minimum capital, liability limited to contributions, and articles of association that define most operating rules. It is ideal for startups, group subsidiaries, and holding companies. Unlike the PLC, the SAS cannot make public offerings.
Simplified Joint-Stock Company (SAS): A Lever for Strengthening Contractual Freedom
The Simplified Joint-Stock Company (SAS) is a business model that offers notable flexibility and adapts to the specific needs of entrepreneurs and companies of all sizes. Here is an informative summary based on the article by Upsilon Consulting, a firm specializing in tax advisory and strategic planning, about the SAS. The SAS (Simplified Joint-Stock Company) is a legal form of company introduced by Law No. 19-20. Indeed, this law amends Laws No. 5-96 and 17-95.
It introduces the framework and mandatory rules relating to the Simplified Joint-Stock Company. Furthermore, it addresses expectations long expressed by business operators. The SAS is founded on the principle of contractual freedom among shareholders. Indeed, this principle is reflected in the company’s articles of association, which offer a flexible structure. Moreover, the SAS places great emphasis on the intuitu personae of the shareholders.
Elsewhere in the world, the Simplified Joint-Stock Company (SAS) represents an increasingly popular legal form in the contemporary entrepreneurial landscape. Combining flexibility and security, it stands out for its ability to adapt to the specific needs of businesses, whether innovative startups or large-scale projects. This type of company provides a legal framework that allows great freedom in organization and management, while protecting shareholders through liability limited to their capital contribution. In Morocco, since its introduction, it has been gaining increasing popularity. However, it is still far from dethroning the Moroccan investor’s favorite legal vehicle: The Limited Liability Company (LLC).
This article aims to provide a thorough understanding of the SAS, covering its essential characteristics, its management structure, and key aspects of its governance. We will also explore shareholder liability, the internal functioning of this legal form, and the specific procedures related to decision-making and share transfers. Enriched with practical advice and detailed information, this article serves as an essential guide for anyone considering creating or becoming involved in a Simplified Joint-Stock Company.
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Why Consider the Simplified Joint-Stock Company (SAS) in Morocco?
What Is the SAS?
In the business world, the Simplified Joint-Stock Company (SAS) stands out as a modern and versatile legal structure. Specifically, it is a capital company where the relationship between shareholders is based less on their personal identity and more on their financial contribution. This legal form is particularly valued for its great flexibility: the SAS articles of association can be freely tailored by the shareholders, allowing them to structure the company according to their specific needs.
One of its major advantages lies in its lighter regulatory framework compared to other business forms such as the Public Limited Company (PLC). It allows greater freedom in defining the roles and powers of each shareholder, thus offering a unique opportunity for adaptation and innovation. Additionally, the SAS status facilitates the entry of new investors and is ideal for fast-growing companies, such as technology startups, which require rapid adjustments and agile decision-making.
What Are the Main Advantages of This Legal Form in Morocco?
Before Law 19-20, this legal form already existed. However, it was intended only for large investments such as:
- Joint subsidiaries of major groups;
- Joint ventures;
Indeed, the type of shareholders it required and the minimum capital made it inaccessible to SMEs. Today, it serves as a structuring tool for groups of all sizes. It can even apply to sole entrepreneurs. Indeed, it is now possible to create a Single-Shareholder Simplified Joint-Stock Company (SASU).
This company offers the following advantages:
- Operational flexibility: less rigid than the PLC or LLC;
- Capital-control separation: the ability to separate capital and control;
- Enhanced right to information for shareholders;
- Faster transactions: completion within more reasonable timeframes than the PLC.
The law has reduced the statutory domain of the SAS. As a result, the company’s operating procedures are defined by its articles of association.
For Which Legal Structures Should You Choose the SAS?
The SAS is a sound choice for investors seeking to adopt:
- Low-constraint structures;
- While being able to create specific legal arrangements;
- SMEs looking to grow and cooperate with other companies to strengthen their alliances.
The SAS is also an effective tool for creating subsidiaries. Indeed, it ensures good group management by including specific clauses in the articles of association.
Furthermore, the SAS is the ideal vehicle for business transfers. Indeed, the statutory clauses allow for a proper distribution of powers and a smooth transition of control.
The SAS can also serve as a holding company to hold interests in other companies within a group.
What Are the Key Differences Between the SAS, the LLC, and the PLC?
| **Legal framework** | **SAS** | **LLC (SARL)** | **PLC (SA)** |
| **Share capital** | No minimum capital | No minimum capital | Non-listed companies: MAD 300,000
Listed companies: MAD 3,000,000 |
| **Number of shareholders** | Possible with a single shareholder (individual or legal entity). | Possible with a single shareholder (individual or legal entity) | Minimum 5 shareholders |
| **Company organization** | Rules are defined by the articles of association. | The LLC must comply with a number of mandatory public order rules:
Majority rules or arrangements for voting rights, etc. | To protect minority shareholders, the law strictly defines how the PLC operates, restricting shareholders' freedom. |
| **Public offering** | Prohibited | Prohibited | Permitted |
| **Statutory auditor** | The appointment of one or more auditors is mandatory when turnover exceeds the threshold set by regulation. | The appointment of one or more auditors is mandatory when turnover exceeds the threshold of 50 million dirhams. | Companies making public offerings are required to appoint at least two statutory auditors; the same applies to banking, credit, investment, insurance, capitalization, and savings companies. |
| **Shareholders' agreement** | Clauses to ensure cohesion and stability can be included directly in the articles of association. | The distribution of shares may optionally be provided for in a contract between the shareholders. | Due to the rigid legal framework of the PLC, shareholders adopt shareholders' agreements, separate from the articles of association, to ensure cohesion and stability of the shareholder base. |
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How to Establish a Simplified Joint-Stock Company?
The formation of an SAS is subject to the same procedures and formalities governed by Laws 5-96 and 17-95 for all companies.
To create a Simplified Joint-Stock Company in Morocco, the steps are as follows:
- Obtain a Negative Certificate (name availability check)
- Choose a registered office address
- Draft the articles of association (specific to the SAS)
- Register the incorporation documents
- Register for business tax (Taxe Professionnelle)
- Obtain a tax identification number (IF)
- Register with the Commercial Registry (RC)
- Enroll with the National Social Security Fund (CNSS)
- Publish official notices (in the Legal Gazette and Official Bulletin)
- Open a bank account with a bank of your choice
How Upsilon Consulting Can Assist You
Considering the creation or management of a Simplified Joint-Stock Company (SAS) can be complex and often requires specialized expertise. This is where Upsilon Consulting comes in. With our extensive experience in legal advisory and business management, we are ideally positioned to support entrepreneurs at every stage of their SAS’s life.
At Upsilon Consulting, we offer personalized assistance in drafting the articles of association, ensuring they precisely meet the needs and objectives of your business. We also guide you through strategic decisions, tax management, and compliance matters, ensuring that your company operates optimally within the SAS regulatory framework. Additionally, our expertise extends to planning share transfers and managing changes within the governing bodies.
By choosing Upsilon Consulting, you gain a reliable and competent partner, dedicated to the success and growth of your business. Our goal is to provide you with the tools and advice needed to navigate the world of SAS companies with ease and to turn your entrepreneurial ambitions into tangible realities.
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What Are the Specific Features of the SAS Articles of Association?
The Simplified Joint-Stock Company may provide for certain adjustments regarding the company’s formation:
Shareholders
The articles of association determine the decisions that shareholders must make collectively. In addition, they set out the forms and conditions for this decision-making.
Shareholder freedom is the guiding principle. However, the law provides for exceptions relating to amendments to the articles of association, which remain the exclusive competence of shareholders exercised at an extraordinary general meeting.
Shareholder liability in a Simplified Joint-Stock Company (SAS) is a key element that attracts many entrepreneurs. In an SAS, each shareholder’s liability is limited to their capital contribution. This means that the company’s debts cannot exceed the amount each shareholder has invested, thereby protecting their personal assets in the event of the company’s financial difficulties. This limitation of liability is reassuring for investors and facilitates fundraising, particularly during the startup or growth phases of a business.
It is nevertheless important to note that shareholders may, if they choose, extend their liability through personal commitments such as guarantees. These commitments may increase the financial risk for shareholders but may also be necessary to obtain certain financing or guarantees. Clarity and caution in drafting the articles of association and ancillary contracts are therefore essential to properly define the degree of liability and the obligations of each shareholder within the SAS.
Share Capital
Share capital is freely determined by the founders in the articles of association; no minimum is required. This capital may consist of cash contributions and/or in-kind contributions (assets).
The Simplified Joint-Stock Company may issue inalienable shares resulting from contributions in industry (skills/labor). In this case, these shares cannot be transferred. Indeed, such shares are closely linked to the personal qualities of the individual who contributes their expertise.
Company Organization
The only mandatory governing body is the president. When the president is the sole governing body of the SAS, they will also assume the company’s management powers under the conditions that may be established in the articles of association. A CEO may be appointed at the shareholders’ discretion. Alongside these two legally identified governing bodies, shareholders are free to establish additional management or supervisory bodies. Drafting the articles of association is an essential prerequisite for organizing the governance of an SAS.
Decision-making and share transfers are two crucial aspects of managing a Simplified Joint-Stock Company (SAS). Regarding decision-making, the SAS articles of association play a determining role. They define who, among the shareholders or governing bodies, has the power to make important decisions. This may include matters such as amendments to the articles of association, capital increases, or major strategic directions. The flexibility offered by the SAS allows shareholders to design a decision-making process that best suits the structure and objectives of their company.
Regarding share transfers, the SAS offers great freedom. In principle, shares can be freely transferred, but the articles of association may include specific clauses to regulate or restrict this freedom. Among these clauses, one commonly finds the approval clause, which subjects share transfers to the agreement of other shareholders, or the pre-emption clause, which gives existing shareholders priority rights over shares offered for sale. These provisions help control the entry of new shareholders and preserve the stability and original vision of the company.
Statutory Auditors
Like the Limited Liability Company, the SAS articles of association may optionally provide for the appointment of one or more statutory auditors.
Nevertheless, one or more statutory auditors must be appointed by a majority of shareholders when turnover exceeds the threshold set by regulation (the implementing decree has not yet been issued). This obligation ensures the financial transparency of the company and protects the interests of the shareholders.
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Questions and Answers About the Simplified Joint-Stock Company in Morocco
Here are the four most frequently asked questions about the Simplified Joint-Stock Company (SAS), which I identified from my research:
- What is an SAS? The SAS, or Simplified Joint-Stock Company, is a capital company that allows great flexibility in its operations. It is often chosen by startups and innovative projects for its flexibility in freely organizing the company’s functioning.
- What is the liability of SAS shareholders? SAS shareholders have liability limited to the amount of their participation in the share capital. However, they may give personal commitments that could extend this liability.
- How does an SAS work? The SAS is managed by a president, who is the mandatory governing body. Shareholders may establish other management positions and delegate certain decisions to these bodies. From a tax standpoint, SAS profits are generally subject to Corporate Tax, with a temporary option for Income Tax.
- What are the rules for decision-making and share transfers in an SAS? Important decisions may be made by the shareholders or delegated to other governing bodies according to the company’s articles of association. Regarding share transfers, the transfer is in principle free but may be restricted by specific clauses in the articles of association.
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Other Important Points
The internal functioning of a Simplified Joint-Stock Company (SAS) is characterized by great flexibility, allowing a tailored adaptation to the specific needs of each company. At the heart of this functioning is the president, the central and mandatory figure, who provides the legal representation of the SAS. The company’s articles of association may provide for the appointment of other governing bodies such as general managers or boards of directors, thus offering diversity in management and strategic decision-making.
In tax matters, the SAS is by default subject to Corporate Tax, but it may temporarily opt for Income Tax, under certain conditions. This tax flexibility is particularly advantageous for small and medium-sized enterprises in their growth phase. Furthermore, shareholders have nearly total freedom in drafting the articles of association, allowing them to precisely define the decision-making procedures, the distribution of powers, and governance rules. This customization makes the SAS particularly attractive for innovative projects and companies seeking a legal structure that dynamically adapts to their evolution.
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Advantages of the SAS:
Shareholder liability limited to the amount of their contributions.
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Significant freedom in drafting articles of association for flexible operating rules.
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A modern image and simplified formalism that attracts innovative companies.
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Role and Responsibilities of Shareholders and the President:
Shareholders benefit from specific rights, including voting rights and the right to dividends.
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The SAS president, often treated as an employee, falls under the general Social Security regime but is not entitled to unemployment insurance.
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Importance of declaring all governing bodies with the commercial registry, although only the president is mandatory.
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Drafting the Articles of Association and Management Procedures:
Importance of carefully drafting the articles of association to govern the conditions for shareholder entry and exit, decision-making, and the distribution of powers.
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The articles of association may include approval clauses, pre-emption clauses, and other specific procedures for managing the SAS.
Use and Assessment of the SAS in Morocco:
- The SAS has become the preferred form for international groups establishing a presence in Morocco.
- SAS shareholders can organize structured governance around collegiate bodies, such as audit, strategic, or financial committees.
- Ability to issue complex securities, such as convertible bonds (OCA), share subscription warrants (BSA), or bonds with share subscription warrants (OBSA).
Frequently Asked Questions
What is a Simplified Joint-Stock Company (SAS) in Morocco?
The SAS is a modern legal form introduced by Law No. 19-20 that combines the structure of a capital company with great flexibility in governance. Unlike the PLC or LLC, its operating rules are largely defined by the articles of association rather than by law, allowing shareholders to tailor the company’s organization to their specific needs.
What is the minimum capital required to create an SAS in Morocco?
There is no minimum capital requirement for creating an SAS in Morocco. The share capital is freely determined by the founders in the articles of association and may consist of cash contributions, in-kind contributions, or even contributions in industry (skills and labor), making it accessible to entrepreneurs of all sizes.
How does the SAS differ from an LLC (SARL) in Morocco?
The key difference lies in organizational flexibility. The SAS allows shareholders to define virtually all operating rules in the articles of association, while the LLC must comply with mandatory public order rules regarding majority voting and other governance matters. The SAS also permits the separation of capital and control and can issue complex securities such as convertible bonds.
Can a single person create an SAS in Morocco?
A single person can indeed create an SAS in Morocco, which then takes the form of a SASU (Simplified Joint-Stock Company with a Single Shareholder). Law No. 19-20 allows for one or more shareholders, with no minimum capital requirement, making the SASU an accessible and flexible option for solo entrepreneurs who want the governance freedom offered by the SAS framework.
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