What Is a Société Anonyme (S.A.)?

Société anonyme (S.A.) is a French term for a public limited company (PLC) and has many equivalents all over the world. A société anonyme is the equivalent of a corporation in the United States (publicly-traded company or incorporated), a public limited company in the United Kingdom, or an Aktiengesellschaft (AG) in Germany. A société anonyme is a type of business structure that establishes a company as a legal person that can own and transfer property, enter contracts, and be held liable for crimes. One of its key benefits is that it limits the owners’ personal liability for the company’s actions.

Key Takeaways

  • A société anonyme is a French business structure that is equivalent to a corporation in the United States or a public limited company in the United Kingdom.
  • In 1808, the French government implemented the société anonyme as one of several measures to provide structure to the nation's commerce and to prevent the rampant speculation that had lead to a cycle of boom and busts.
  • A benefit of a société anonyme is that it limits an owner's risk and protects the owner's personal assets against creditor claims.

Understanding the Société Anonyme (S.A.)

The société anonyme is a popular business structure with equivalents in many other languages and countries. For example, in Spanish it is called a Sociedad Anónima; in Italian, it is referred to as a Società Anonima; in Portuguese, it is called a Sociedade Anônima. In all cases, a company designated S.A. protects its owners’ personal assets against claims by creditors, which makes many individuals more willing to start companies, as it limits their risk.

The S.A. structure also makes it easier to meet a growing business’ capital-funding needs, as numerous investors can contribute large or small amounts of money as shareholders if the company opts for public ownership. The S.A. is thus a key component of a robust capitalist economy.

One of the société anonyme's key benefits is that it establishes the company as a legal person and thus limits the owners’ personal liability for the company’s actions.

History of Société Anonyme (S.A.)

On Jan. 1, 1808, the French government put into effect the provisions regarding the formation and structure of a société anonyme as part of the country's new code regulating commerce. One purpose of these new regulations was to prevent the rampant speculation that had rocked the French markets prior to and during the French Revolution. The code recognized three forms of business organization: the société en nom collectif, the société en commandite, and the société anonyme.

A société en nom collectif is a standard partnership in which all partners have unlimited liability, any partner could act for the others, and all partners are actively engaged in the enterprise. By comparison, the société en commandite is comprised of limited partners (also known as sleeping or silent partners) and active partners. The limited partners provide assets or capital to the enterprise and have limited liability, while the active partners are responsible for all management activities and have unlimited liability.

Requirements of a Société Anonyme (S.A.)

An S.A. is subject to different tax regulations than a sole proprietorship or partnership, and, in the case of a public S.A., different accounting and auditing requirements. In addition, all S.A.s must meet certain basic legal requirements. To be valid, a société anonyme must have articles of incorporation, a board of directors, a managing director or a management board, a supervisory board, a statutory auditor and deputy, capital of at least 37,000 euros (half of which must be released at the constitution of the company, with the balance to be paid within five years), and a unique name. It is generally constituted for 99 years maximum.

Other regulatory requirements vary by country. In Belgium, for example, an S.A. must be funded with at least €61,500 (as of 2018), 25% of which must be deposited during the incorporation process, and have at least two partners. In Costa Rica, nonresidents can start an S.A. without a Costa Rican partner. There are typically fees, which vary by location, for completing the various legal steps for forming an S.A. Well-known companies that are established as S.A.s include Nestlé, Anheuser-Busch InBev, and L’Oréal.

Examples of a Société Anonyme (S.A.)

Many other countries and languages employ the société anonyme structure. Some examples:

  • Brazil: Sociedad Anônima
  • Denmark: Aktieselskab (A/S)
  • India: Public Limited (LTD.)
  • Indonesia: Perseroan Terbatas Terbuka (P.T. Tbk.)
  • Japan: Kabushiki Gaisha (K.K.)
  • Korea: Jusighoesa (J)
  • Malaysia: Berhad (Bhd)
  • The Netherlands: Naamloze Vennootschap (NV)
  • Norway: Aksjeselskap (AS)
  • Poland: Spólka Akcyjna
  • Sweden: Aktiebolag (AB)