Incorporate.

Why choose the SAS over the SARL or the SA?

The SAS (simplified joint-stock company) has become the standard for startups for three reasons. First, contractual freedom: you organise governance almost however you like, whereas the SARL (limited liability company) is largely locked down by statute. Next, the absence of any minimum capital, unlike the SA (public limited company), which requires EUR 37,000 and carries heavy formalities. Above all, the SAS issues shares and all kinds of securities — preferred shares, BSA (share subscription warrants), BSPCE (employee stock warrants) — which are essential to bring in funds and to give talent a stake in the company. The SARL, by contrast, issues only ordinary units: no BSPCE, no preferred shares, a cap of 100 partners, and a far more rigid process for admitting investors.

How should you think about your share capital and its allocation?

In an SAS, no minimum capital is required (EUR 1 is legally possible), but a purely symbolic capital undermines your credibility with banks and partners: aim for an amount consistent with your needs. For cash contributions, at least half must be paid up at incorporation, with the balance within five years. Contributions in kind in principle require a contribution auditor (commissaire aux apports), save where an exemption applies.

On allocation between founders, steer clear of a frozen 50/50 split with no exit mechanism: it is the leading source of deadlock. Reason in terms of actual contribution and length of commitment, and provide for founder vesting so that a founder who leaves early does not keep all of their shares.

Which provisions in the bylaws are truly strategic?

Four clauses deserve particular attention. The organisation of management (the scope of powers, decisions subject to the collective approval of the shareholders, and the conditions and compensation for removal). The approval clause (agrément), which makes any transfer of securities subject to shareholder consent and keeps out unwanted third parties. The pre-emption right, which gives existing shareholders priority to buy back any securities offered for sale. Finally, exclusion and inalienability: the exclusion clause allows the forced exit of a shareholder in defined circumstances, while the inalienability clause temporarily prohibits the transfer of securities.

First financing: the BSA AIR

The BSA AIR (a convertible-equity instrument: share subscription warrant under a rapid investment agreement) is often presented as the most efficient solution for a first round: the investor advances funds without an immediate valuation of the company, the valuation being set later — at the next round, with a discount that rewards the early risk. It is a powerful tool, but the trap is the valuation cap: if poorly negotiated, it massively dilutes the founders at closing.

Why assign your IP to the company from day one?

At the outset, it is often a founder — not the company — who wrote the code, designed the brand or built the technology. Until something is put in place, these assets remain that founder's personal property, not the company's: the business exists, but it does not own its own product. The issue comes up systematically in due diligence. It is therefore advisable to provide for the assignment of intellectual property to the company from the start, through your shareholders' agreement or your bylaws.

Created by the PACTE Act, the mission-driven company (société à mission) allows an SAS to enshrine in its bylaws a purpose (raison d'être) together with social or environmental objectives. For a startup, the benefit is twofold: a strong signal to impact investors, and an internal compass that rallies teams and sets the company apart.