What is a Société à Responsabilité Limitée (SARL)?

Last updated: 27/06/2023

Features and benefits


The société à responsabilité limitée is one of the most common legal forms.
 It limits the shareholders' liability to the amount of their contributions.
 It gives a family touch to the firm.
 It enables a firm to be set up with less capital.
 It can be managed by a third party.


At least two shareholders are needed to set up an SARL. There is no maximum number of shareholders (see article 35-1 of the code de commerce)

Shareholders may be natural or legal persons. Since commercial capacity is not required, minors, even those who are not emancipated, and adults under judicial protection, guardianship or curatorship can be shareholders.

The SARL must carry out commercial activities. The professions and non-trading activities cannot be performed by an SARL. Some other activities cannot be performed by an SARL, such as finance and insurance, with the exception of insurance brokerage.

The minimum share capital for an SARL is EUR 15,000. It may be composed of cash contributions (money) and/or contributions in kind (equipment, patent, etc.). Contributions in skills or services are not authorized.

Setting up an SARL

The Memorandum and Articles of Association

The Memorandum and Articles of Association are drawn up as a privately-signed deed or as an official deed (notarized instrument).

However, when the share capital is formed, in whole or in part, of property assets subject to land registration at the Mortgage Registry Office, the notarized deed must be used.

Mandatory inclusions

The Memorandum and Articles of Association must include:

  • The company's legal form
  • The number of shareholders
  • The duration: the duration of a firm cannot exceed 99 years. The date of effect of the company must be stated: the date of signature of the Memorandum and Articles of Association, date of registration or fulfilment of the condition precedent of obtaining official authorization to do business.
  • The company name (see article 35-2 of the code de commerce)

  • The registered office
  • The company objects

  • Allocation of shares among shareholders, and shares paid up
  • The company year-end
  • Appointment of Managing Director(s)
  • The conditions under which the company is to be run
  • Resolutions to be taken by the shareholders at General Meetings
  • Procedures for calling and holding meetings and majorities required when passing resolutions

Optional items

The Memorandum and Articles of Association may include other items, for example:

  • How shares may be transferred
  • How the firm may be liquidated

Documents to be appended to the Memorandum and Articles of Association

The following must be appended to the Memorandum and Articles of Association:

  • The auditors' report, if applicable
  • A special power of attorney granted to a proxy, if applicable

Number of copies

You must provide:

  • 1 original copy of the Memorandum and Articles of Association for each shareholder
  • 2 original copies for the registration formalities
  • 2 original copies for the Business Development Agency
  • 1 original copy to be deposited at the registered office of the company
  • Several copies certified as true copies by the legal representative to be deposited with various entities such as the bank


The Memorandum and Articles of Association must be registered with the Registration Office at the Department of Tax Services.

No required period has been laid down for registering the Memorandum and Articles of Association in the form of a privately-signed deed.

However, if there are contributions of goodwill, registration must take place within three months (article 3 de l’ordonnance loi n°155 du 17 juin 1931).

Nevertheless, registration of the Memorandum and Articles of Association is a pre-requisite in order to examine a "new business declaration" or "application for authorisation of a new business".

Share capital

Share capital, amounting to a minium of EUR 15,000, is divided into equal shares.

It must be fully paid up. This means that the amount of share capital defined in the Memorandum and Articles of Association of the firm must correspond to the founders' total undertakings.

Each shareholder makes a contribution in cash or in kind to the company share capital and in return receives shares.

Cash contributions

When the company is formed, cash contributions must be fully paid up, amounting to the minimum required share capital.

Additional amounts must be paid up within three years of incorporation, subject to the share capital being reduced at the request of any interested party.

When application for registration is made to the Trade and Industry Registry, effective payment of cash contributions forming the minimum share capital is checked by means of submission of a certificate of deposit of funds, issued by the credit institution with whom an account has been opened for this purpose.

Contributions in kind

Contributions in kind must be fully paid up upon incorporation.

As a general rule, contributions are made by transferring ownership of the asset to the company. However, a contribution of enjoyment, by means of which the asset contributed is rented to the firm in exchange for the allocation of shares, can also be considered.

If there are contributions in kind such as goodwill, a valuation must be made by an auditor chosen by the future shareholders unanimously, from among Monegasque chartered accountants.

However, the future shareholders may decide unanimously that they will not use the services of an auditor.

In this case, they are jointly and severally liable for 5 years in respect of third parties for the value attributed to the contributions made when the company was formed. Third-party action is not permitted in excess of this amount.

The shareholders' liability may also be incurred if the value of contributions chosen differs from the amount proposed by the auditor.

Allocation of shares

In return for their contribution to the share capital of the SARL, shareholders receive a number of shares. The latter bestow upon them a right to participate actively in the life of the firm, to receive a share in profits made by the firm and imposes an obligation to contribute to losses recorded bv the firm.

The registered office

In principle, the registered office of an SARL is established on commercial premises (commercial lease, short-term lease or temporary tenancy agreement).

However, it is possible to domicile the firm at the Managing Director's personal address in Monaco for a duration of one year, that may be renewed once, as from publication in the Journal de Monaco of the transcript of the Memorandum of Association if:

  • No legislative, regulatory or contractual provision is opposed thereto
  • The firm's activities do not involve reception of clients or the storage or display of goods
  • The firm employs no staff

It is also possible, under certain conditions, to domicile the firm:

  • Either with a domiciliation company for a period limited to one year (may be renewed once)
  • Or on premises occupied by another firm

See: "Acquiring a domicile"

The Managing Director

An SARL must be managed by one or more natural persons. A company cannot therefore be the Managing Director of an SARL(see article 35-4 of the code de commerce)

Management may be performed by a shareholder or by a third party. The Managing Director, even if they are not a shareholder, is not considered as a trader.

Appointment and removal of the Managing Director

The first Managing Director(s) are appointed by the shareholders in the Articles of Association and may be removed under the conditions laid down therein.

In the absence of clauses to another effect in the Articles of Association, they are appointed for the whole duration of the company.

During the course of the company's existence, Managing Directors are appointed by the body of shareholders.

Managing Partners

Managing Partners fall under the social security regime for self-employed workers: they must therefore be affiliated to the Caisse Autonome des retraites des travailleurs indépendants and the Caisse d’assurance maladie, accident et maternité des travailleurs indépendants.

Powers of the Managing Director

With regard to the shareholders

The Managing Director may carry out any and all acts that are required or appropriate in fulfilling the company objects, subject to powers bestowed by law or the Articles of Association upon the shareholders.

If the Articles of Association have not limited his/her powers, the Managing Director may thus carry out any and all acts of management insofar as the latter are related to the activities of the SARL and are in line with the firm's interests.

In this regard the Managing Director may, in the name of the firm and in line with the company objects, sign contracts and agreements, hire staff, take legal action, etc.

Since the company objects enable the extent of the Managing Director's powers to be defined, this clause of the Articles of Association should therefore be drafted with particular care.

The Managing Director's powers can be limited by:

  • The Articles of Association: some clauses in the Articles of Association may render certain acts subject to prior authorization by the body of shareholders
  • The powers bestowed upon shareholders by the law: the company's legal representative cannot take any action that is solely incumbant upon the shareholders, such as amendments to the Articles of Association or transfers of goodwill leading to the liquidation of the firm

A Managing Director cannot, therefore, take a unilateral decision to amend the company objects.

Managing Directors that exceed their powers incur their personal liability in respect of shareholders, who may obtain compensation for the prejudice or remove the Managing Director for just cause.

With regard to third parties

In respect of third parties, the Managing Director is granted the most extensive powers to act in all circumstances on the company's behalf, subject to the powers attributed specifically to shareholders by the law.

Clauses in the Articles of Association limiting the Managing Director's powers cannot be enforced against third parties, even if the latter were aware of the existence of such a clause.

The Managing Director's obligations

In respect of the shareholders

Holding meetings

The Managing Director must hold two kinds of meeting: Ordinary General Meetings (OGMs) and Extraordinary General Meetings (EGMs).

Ordinary General Meetings (OGMs)

The annual accounts must be approved by the OGM.

Resolutions are passed in accordance with the Articles of Association (See Article 35-5 of the code de commerce)

No rule establishes a quorum for resolutions.

Extraordinary General Meetings (EGMs)

EGMs have the purpose of ruling on any amendments to the Articles of Association such as changes in legal form, changes in the company name, capital increases, etc.

Resolutions are passed in accordance with the Articles of Association.

However, resolutions pertaining to a change in the nationality of the firm, transformation into a société en nom collectif, société en commandite simple or société en commandite par actions, or early liquidation of the firm must be passed unanimously.

Informing shareholders

If there is a meeting, the Managing Director must invite the shareholders and send them all documents enabling them to vote in full knowledge of the facts.

For Ordinary General Meetings, the Managing Director must make available to the shareholders or their proxies, at the registered office of the company:

  • The annual accounts
  • The management report

Shareholders or their proxies may take copies thereof.

In respect of third parties

In order to render certain corporate deeds enforceable against third parties, the Managing Director must perform publication formalities which vary according to the nature of the resolution.

In this regard, any amendment to the Articles of Association relating to the form of the company, its objects, the appointment of Managing Directors, the amount of share capital, duration of the company, and transfer of the registered office require notice to be published in the Journal de Monaco and the depositing at the General Registry of the minutes of the Extraordinary General Meeting, so that they may be posted there.

Liability of the Managing Director

The Managing Director is responsible to the company and to third parties for negligence that they might commit in carrying out their duties. In this regard, the Managing Director incurs their civil and/or criminal liability.

Civil liability of the Managing Director

The Managing Director's civil liability may be incurred if:

  • The Managing Director has committed negligence
  • Such negligence has caused prejudice (to the firm, to shareholders or to a third party)

There are three types of negligence that may incur the Managing Director's civil liability:

  • Infringements related to legal and regulatory provisions applying to company law
  • A breach of the Articles of Association (disregard of clauses in the Articles of Association requiring the Managing Director to obtain prior approval from the shareholders when taking certain decisions)
  • Mismanagement such as, for a Director, accepting orders that he/she knows perfectly well the company will not be able to honour

With regard to the tax administration and social security administration, the legal representative of the SARL may incur their personal liability if it is proved that, through fraudulent manoeuvres or through serious and repeated non-compliance with tax and/or social security obligations, they have made the recovery of sums due by the company to said administrations impossible.


Individual liability in the event of collective proceedings

In the event of collective proceedings, the Managing Director may be ordered to pay all or part of the SARL's debts if they have committed mismanagement, on the basis of article 560 of the Code de Commerce.

Liquidation of assets will be declared pursuant article 565 of the Code de Commerce against Managing Directors that have:

  • Done business in their personal interests or on behalf of a third party under cover of the company, masking their actions
  • Used company assets as their own
  • Improperly continued operations generating losses that could only lead to suspension of payments for the company, in a personal interest or on behalf of a third party

The Managing Director may also be the subject of personal bankruptcy measures or a prohibition from directing, managing, running or controlling a privately-held commercial undertaking or a company, on the basis of articles 573 à 578 of the Code de Commerce.

Criminal liability of the Managing Director

The Managing Director may incur their liability, pursuant to article 51-12 of the Code de Commerce in the following cases:

  • If they have not instigated the appointment of one or more auditor(s) or if they have refused to communicate to the auditors the documents required in order for them to fulfil their duties.

  • If they have not had the certificate relating to the annual accounts described in article 51-7 of the Code de Commerce signed by a member of the Ordre des experts comptables et comptables agréés or if they have refused to communicate to the latter the documents necessary to obtain their signature

The Managing Director may incur their liability, pursuant article 51-13 of the Code de Commerce in the following cases:

  • If they have not produced accounting documents or if they have not submitted those documents for approval by the shareholders' meeting in breach of the provisions of article 51-6
  • If they have not sent these documents to the Trade and Industry Registry in breach of the provisions of article 51-7 of the Code de Commerce

The Managing Director may incur their liability if they commit the criminal offences laid down in loi n°1144 du 26 juillet 1991, such as, for example, carrying out activities outside the limitations of the company objects.

The shareholders of an SARL

The shareholders have a right of oversight concerning the management of the firm insofar as they participate actively in company life by voting in resolutions pertaining to the operation of the company.

Powers to manage the firm

Participating in meetings

All shareholders of an SARL are entitled to participate in Ordinary and Extraordinary General Meetings and no shareholders may be excluded therefrom.


Any shareholder may be represented at a meeting by:

  • Their spouse, except where the company is formed only of the two spouses
  • A shareholder, except where the company has only two shareholders
  • A third party that has been granted a special power of attorney

Representation presupposes the existence of a mandate, which cannot be enduring.

In other words, the mandated person must have the power to vote in the stead of the person represented, for all decisions taken at the meeting.

Legal persons that are shareholders can be represented in meetings either by their legal representative, or by any other person that has been granted power of attorney.

Voting on resolutions

The right to participate in a meeting implies a right to vote at said meeting.

Each shareholder has a number of votes equal to the number of shares that they own.

Shareholders may be consulted in writing only if the Articles of Association so provide. However, written consultations are prohibited for the annual meeting approving the accounts and for resolutions amending the Articles of Association. 

Right to information

Each shareholder has a twofold right to information.

Prior to every meeting

Before any meeting is held, a number of documents must be sent to the shareholders in order that they may vote in full knowledge of the facts.

Ongoing communication

At any time of the year, shareholders are entitled to examine the annual accounts and management report at the registered office of the company.