WeCount Team
01 July 2021
The simplified joint stock company (SAS in french) is one of the legal forms available when setting up a new business in Morocco. The simplified public limited company is generally composed of several natural or legal persons. The number of shareholders in a SAS is unlimited.
The other fundamental characteristic of this legal form is that the personal assets of the associates are protected insofar as the latter only bear the losses up to the number of their contributions which can be in value or kind.
But which tax system and which specificities for the simplified public limited company in Morocco? How does the tax system work for a simplified public limited company? Why create a simplified public limited company in Morocco? To whom does this type of company correspond, and for what kind of activity?
On the other hand, for what type of activity is a simplified public limited company not suitable?
When creating your company in Morocco, the choice of legal status is not to be taken lightly. Here is an article informing you about the simplified public limited company in Morocco to know if this legal form will correspond to your needs.
In Morocco, creating a simplified public limited company (SAS) is governed by law 17-95 (art 425 to 440), allowing two or more companies to form a joint subsidiary or create a company that will become their standard parent company. This bill has recently been updated (in June 2019) to better meet the current needs of SAS in Morocco.
From this point of view, the simplified public limited company offers many advantages. Still, it exposes the shareholders to risks that we will detail.
In Morocco, the advantages of the simplified public limited company are not negligible.
One of the significant advantages of the simplified public limited company in the Kingdom is the flexibility of the Moroccan legislator, who gives total freedom to the shareholders of these companies to organize or manage their companies whose organization and functioning are governed by articles of association.
In Morocco, simplified limited companies are protected from certain risks. When a company embarks on a significant investment program, it is stabilized by a clause of inalienability of shares for a period not exceeding ten years.
Another notable element is that only two shareholders must create a SAS. In contrast, at least five are needed to found a limited liability company (LLC). However, they can be natural and legal persons and may or may not be residents in Morocco.
The amount of the capital of a simplified public limited company is freely fixed by the shareholders with a minimum of 300.000 MAD. It is the shareholders who determine it together.
If the shareholders bring this amount in foreign currency, it must be converted into Moroccan Dirhams beforehand.
With an uncomplicated administration, the management of the simplified public limited company is much easier and more flexible than that of the limited company.
Suppose this legal form offers many advantages, including, among others, a certain flexibility in the setting up of the minimum capital and great freedom in the drafting of the articles of association as well as a limited liability company like a LLC. In that case, this legal form presents, however, some limits.
Indeed, whatever the amount of the capital, the funders must pay it up at the time of the signature of the articles of association of the simplified public limited company.
Another significant handicap is that the simplified public limited company is automatically excluded from public offerings.
In addition to being reserved for large companies, the articles of association of the simplified public limited company, which constitute the basis of its operating rules, are rather complicated to draft. Indeed, the drafting of these articles requires good skills in the field. The assistance of a specialized lawyer or a chartered accountant is highly recommended for this essential step when creating a new simplified public limited company.
There are many steps to follow during the creation of the simplified PLC in Morocco.
Everything starts with the name of the company, and to do this, a negative certificate. Essential for the identification and registration of the company, this document is granted on request by the Moroccan Office of Industrial and Commercial Property represented in the regional investment center of Casablanca.
The second step consists of the establishment of the articles of association. This is also an essential step because it is from this information that the technical details of the company being created are defined.
We recommend that you appoint a chartered accountant or a specialized lawyer to take care of this delicate step because it is a job that requires a certain level of competence in the field of business law.
After drafting the articles of association comes the drawing up of the subscription forms, which is also the responsibility of accounting firms, trustees, notaries, legal advisors, or lawyers.
To get this step done successfully, one condition is required. It consists of providing a subscription form signed by the subscribers.
The amount of the capital paid up in full at the time of the constitution must now be blocked in a bank account.
It should be noted that an auditor evaluates the contributions in kind, and there is no minimum required by the law (art 427 / law 17-95). However, it is forbidden to make contributions in kind within the framework of a SAS.
The blocking of the amount of the paid-up capital is a crucial step that needs to be done within eight days after the company's receipt.
The documents to be provided and the steps to be carried out are among others.
Suppose more and more shareholders opt for the legal form of the PLC for its flexibility of operation. In that case, they are also attracted by its optional tax regime. If you are in this category, you should know that SAS is subject to corporate income tax in Morocco.
If creating a simplified public limited company is relatively simple and advantageous in Morocco, the profits made by companies that have opted for this legal form are automatically taxed at the reduced rate of 10% if the net profit is less than or equal to 300,000 DHS.
This rate is doubled if the net profit is between 300.001 DHS and 1.000.000 DHS. With turnover between 1.000.001 and 5.000.000 DHS, the rate rises to 30%.
The latter reaches 31% with a net profit higher than 5.000.000 DHS and rises to 37% for credit institutions and insurance companies.
While there is virtually no difference between a SA and a simplified public limited company from a tax point of view, the two legal forms have differences in other respects.
Indeed, suppose the simplified public limited company is known for its great statutory freedom, the simplicity, and the flexibility of functioning that it offers to the persons having opted for this legal form. In that case, the limited company is distinguished by the rigidity and the strict rules it imposes.
Within the framework of a corporation, the operating rules require that the management, administration, and control of the company be ensured by several directors, from the CEO to the managing director or the board of directors.
The use of an auditor and the establishment of a board of directors or a supervisory board is mandatory. In addition, many rules of the commercial code, sometimes restrictive and of public order, apply to the limited company.
In contrast to a public limited company, in the case of a simplified public limited company, the appointment of an auditor is only mandatory above certain thresholds.
The other fundamental difference lies in the fact that a single president can manage and administer a simplified public limited company. Even better, the partners have a large margin of maneuver to run their company.
With tremendous flexibility of operation, the simplified public limited company offers its founding partners the freedom to determine the articles of association, the share capital, and the organization's rules of the organization.
In addition to certain flexibility in the setting up of the minimum capital as well as great freedom in the drafting of the articles of association and the functioning, the simplified public limited company offers other advantages such as the fact of being able to benefit the majority manager from the general social security regime.
However, this legal form has some disadvantages because whatever the amount of the capital, the funders must pay it up at the time of the signature of the articles of association of the simplified public limited company.
Another significant handicap is that the simplified public limited company is automatically excluded from public offerings.
In addition to being reserved for large companies, the articles of association of the simplified PLC, which constitute the basis of its operating rules, are somewhat difficult to understand.
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