SA Full Form

What is the full form of SA?

SA stands for Societe Anonyme. It is a French term similar to Public Limited Company in the United Kingdom and Corporations in the United State. Societe Anonyme can be referred to as a legal entity with the power to enter into contracts, transfer ownership, and be held accountable for crimes. It restricts the owners' guilt for the company's actions. It ensures that the business will continue in its usual course without being dependent on the lives of its founders, owners, or shareholders.

This Story also Contains

1. What is the full form of SA?
2. SA: Societe Anonyme
3. Requirements of Societe Anonyme
4. Example of Societe Anonyme
5. Advantages of Societe Anonyme
6. Disadvantages of Societe Anonyme

SA: Societe Anonyme

The French government established SA on January 1st, 1808 as one of the steps made to give the nation's trade structure. It reduces the risk for the shareholder and makes them want to contribute to the capital. It also protects the owners' and shareholders' assets against creditor claims. So, as the risks are reduced more and more individuals are showing interest in starting the company.

It receives its capital funding from numerous investors, some of whom can contribute largely and some contributing small amounts as shareholders. So, it can be said that the key factor of Societe Anonyme will be making the country a capitalist economy. SA as a new country code is regulating the common purpose to prevent the rampant speculation that had destroyed the French market before or during the French Revolution.

The three forms of business codes are Societe en nom collectif, Societe en commandite and Societe Anonyme. In Societe en nom collectif, all the partners in the firm have unlimited liabilities. Societe en commandite is composed of limited partners and active partners. Limited partners provide assets and capital and have limited liability whereas active partners are the ones involved in the management and have unlimited liability.

Requirements of Societe Anonyme

A Societe Anonyme needs to fulfill specific conditions. Numerous criteria might change based on the nation. However, almost all SA are required to submit specific documents related to their articles of incorporation, have a supervisory board, a board of directors, a managing director or management board, a statutory auditor and deputy, a unique number of shareholders, and a minimum amount of capital. It is typically in place for 99 years.

Example of Societe Anonyme

The Societe Anonyme structure is used in many different nations and languages. Some are:

• 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 (N.V.)

• Norway: Aksjeselskap (AS)

• Poland: Spolka Akcyjna

• Sweden: Aktiebolag (AB)

Advantages of Societe Anonyme

• Little risk to shareholders: As the risk is shared among the partners, it is reduced for the shareholder, and their assets are secured from prospective creditors. Through a request to the board of directors for approval of transferability, a partner may freely sell and transfer shares to other shareholders within the firm. This enables the shareholders to take advantage of liquidity and easily manage circumstances like a partner's passing and the transfer to the next of kin.

• Fundraising capacity: The business may exchange securities with the general public to raise a large amount of capital needed for expansion. Depending on its creditworthiness, commercial banks are more likely to provide financial loans to a Societe Anonyme listed on a stock market. The firm will be more accessible after being listed on the stock market, improving its capacity to obtain more capital for growth or operational funding.

Disadvantages of Societe Anonyme

• Strict restrictions: A public limited business must comply with strict stock market filing requirements and stricter restrictions. The corporation must hire at least two managing directors and a properly certified secretary. Annual audits are carried out to give shareholders comfort.

• High capital expenditure: Compared to the funding needs of a private firm, a Société Anonyme has a greater minimum initial capital need. They pay more for the advice of investment and legal specialists.