Who is responsible for debts in SAS?

Article created by legal experts. The editors did not participate in its production.

The company assumes responsibility for its own debts

When a company such as SAS is formed, it becomes a separate legal entity, separate from its shareholders or owners. This separate legal entity is called “legal personality”. In other words, a company exists as a legally autonomous entity, meaning that it can act in its own name, assume obligations and have rights independently of its shareholders.

It should be noted that the managing shareholder of SAS is more liable than the non-managing shareholder. As a manager, the shareholder bears civil and criminal liability.

When a company incurs debts, it bears primary responsibility for paying them off. Creditors have the right to demand repayment using the assets of the company itself. In other words, it is the company’s resources and assets that are used to pay its debts.

What about the limited liability of partners in SAS?

Before creating an SAS, each partner must deposit a certain amount of money or make physical contributions to the company, thus they constitute social capital. In the event of financial difficulties, creditors have the right to seize the company’s share capital to collect their debts. This means limited liability it is only the professional property of the company and the personal property of each shareholder is protected.

According to Article L227-1 of the Commercial Code, natural persons who participate in the operation of a company in the form of a legal entity have limited liability. This limitation means that their financial commitment to the company, represented by their contribution to the share capital, determines the extent of their liability for the company’s debts.

In other words, if a person has contributed a certain amount of money to the share capital of the SAS, his liability for the company’s debts is limited to that amount. SAS debts cannot exceed the total amount of investments made by shareholders.

In specific casesSAS shareholders may be forced to take on obligations that go beyond their initial investment. In such situations, creditors have the right to claim the shareholders’ personal assets if necessary. Additionally, these shareholders may be legally liable to people outside the company.

This is especially so in the following circumstances:

  • Extension of liability in the shareholder agreement : Shareholders may, by private agreement, decide to assume greater financial responsibility than required by law or the SAS Articles of Association. This may include an obligation to put money into the business in the event of difficulties.
  • Overvaluation of in-kind deposits : If shareholders overstate the value of the assets they contribute to SAS, they could pay the actual difference and even face criminal penalties if they cheated.
  • Loan guarantee : If the shareholders guarantee the SAS loan and the company cannot repay it, the personal assets of the shareholders can be used to repay the loan.
  • De facto management : If a partner acts as a SAS manager without having the right to do so, he may be personally liable, including criminally in the event of mismanagement.

To whom does SAS have to pay its debts?

In a SAS (simplified joint stock company), the company’s creditors are primarily responsible for the debts. Creditors are persons or entities to whom the company owes money. Lenders are divided into two categories:

  • Preferred Lenders : These are creditors who, due to the nature of their debt, have the right to obtain payment before other creditors. In the case of SAS, employees are basically the first privileged creditors.
  • Lenders who have a guarantee : These are creditors who have a guarantee (mortgage or pledge) that allows them to receive priority payment over other creditors. These creditors may be banks or other persons who owe a debt to the company.

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