Turning an EURL into a SARL or a SARL into an SPA in Algeria: when and how

Three situations, three paths

EURL to SARL: a partner joins

So the EURL is a SARL with one partner. A second partner leaves the company intact, and its legal form largely unchanged. Nothing is dissolved and nothing is created: the articles are updated, the notice is published in the BOAL and the amendment is entered in the trade register.

1. 1

   Choose the path

   Share transfer or capital increase, depending on whether the money should go to the founder or to the company.

2. 2

   Rewrite the articles for two

   Split of shares, meeting and majority rules, approval of future partners, management, profit sharing.

3. 3

   Sign before the notary

   The transfer or increase deed, and the updated articles.

4. 4

   Publish in the BOAL

   The notary prepares the notice of amended details.

5. 5

   Amend the trade register

   Amendment request to the CNRC, with the amended articles and the BOAL notice.

6. 6

   Declare the beneficial owners

   The new partner changes the list of people who own the company: declaration to the CNRC within a month.

7. 7

   Check the manager's social security situation

   If they remain the majority partner, they stay with CASNOS; if they become a minority partner and are paid, they fall under CNAS.

SARL to EURL: when only one partner is left

The reverse happens when one partner buys out all the others. The company carries on, with a sole partner who now alone takes the decisions reserved for the meeting. The articles are updated to reflect this, followed by the BOAL notice, the trade register amendment and the beneficial owners declaration.

SARL to SPA: a real conversion

Becoming a joint-stock company changes the nature of the company: the capital is divided into shares (actions), management is entrusted to collective bodies and the accounts are certified every year. Companies do it to welcome many investors, to prepare to open up their capital, or because the law requires it.

1. 1

   Meet the conditions

   Gather at least seven shareholders (by share transfer or capital increase) and raise the capital to at least 1,000,000 DA if needed.

2. 2

   Prepare the file

   Report on the company's situation (art. 587), choice of governing bodies, draft SPA articles, intended statutory auditor.

3. 3

   Have the partners decide

   The conversion amends the articles: the three-quarters-of-capital rule (art. 586) is the starting point. Have the notary confirm the exact majority required.

4. 4

   Sign before the notary

   Conversion deed, new articles, appointment of the directors and the statutory auditor.

5. 5

   Publish in the BOAL

   Notice of the conversion and the amended details.

6. 6

   Amend the trade register

   Amendment request to the CNRC for the change of legal form. Ask the branch for the exact list of documents for this case.

7. 7

   Update everything

   Beneficial owners within a month, bank, tax office, stamp, invoices and letterhead, which show the legal form.

What the conversion does not change

In principle, the company keeps its legal personality: it is not dissolved to create another. Its contracts, bank account, debts and receivables carry on. Have the notary confirm this for documents that mention the legal form, such as a licence, an authorisation or an ongoing public contract. On the tax side, both the SARL and the SPA are subject to corporate income tax (IBS); still ask your accountant or the tax office whether the operation has consequences in your case.

What it costs

Common mistakes

• Setting up a new company to welcome a partner, when updating the EURL's articles is enough.
• Keeping EURL articles after a second partner joins: no decision rules are provided for two.
• Starting a conversion into an SPA without having seven shareholders or the minimum capital.
• Letting a SARL exceed fifty partners without converting within the year.
• Forgetting the beneficial owners declaration after the operation.
• Continuing to invoice with the old legal form.