Changing legal form in Algeria: three movements, two locks, one order

1. 1. Changing form: why are there three movements of different nature?

Everyday vocabulary mixes everything. The law carefully separates:

The distinction is not academic. It commands calendar, cost and above all strategy: an EURL is not « converted » the way a SARL is, and one of the three doors closes by itself when nobody operates it.

2. 2. From EURL to SARL: the door that opens without formalism

An EURL is a single-member SARL. Admitting a third party therefore takes two simple paths, both already marked out by the SARL chapter:

• partial sale of shares by the sole member — approval being moot here since he votes alone, but the notarial deed remaining required (articles 571 and 572);
• capital increase in favour of the incoming party, with release of at least one fifth and, for in-kind contributions, the contributions auditor's report (articles 573 and 574).

In both cases the company keeps its legal personality: no conversion deed, no new form of registration. Our guide Creating an EURL in Algeria details all five possible movements, including the trickiest.

Two neighbouring situations complete the picture. Reverse gear exists: all shares coming into one hand does not dissolve the company (article 590 bis 1) — unless that sole member already solely owns another EURL, in which case a one-year clock starts (article 590 bis 2). And the sole member's death brings the family into the mechanics: shares pass freely to heirs (article 570), the company survives (article 589), and a multi-heir EURL becomes pluripersonnelle mechanically.

3. 3. From SARL to joint-stock company: the exact price of the open door

The joint-stock company is the form investors, structured buyers and large credits read. It has an entry tariff, fully listed by the texts:

Our guide Creating a joint-stock company in Algeria prices what this governance costs each year, and our articles on choosing a form (the plan before the rate) explain when it is justified — and when it is not.

4. 4. The locks and the costs nobody announces

Two statutory locks frame the back-and-forth of forms, and a series of recurring costs accompanies the « open » door.

• The joint-stock company's lock. Article 715 bis 15 forbids a JSC from converting into another form before two years of existence and two approved balance sheets. Choosing a JSC commits for two full years; moving down to SARL is then decided like a statutory amendment (article 715 bis 17).
• The obligation beyond fifty. Article 590 (as rewritten by law 15-20) imposes conversion within the year, failing dissolution — the only change of form the law commands.
• The cost of catching up. Every corporate deed passes before the notary on pain of nullity (art. 545); incorporating bears a registration duty of 0.5 % of capital, a general floor of DZD 1,000 (JSC range: DZD 10,000–300,000) (art. 248 of the registration code); every amendment brings publication and registration back. In the practice we observe, their accumulation over a few months — notary, registration, banking overhaul — more than any single amount is what makes directors give up.
• The recurring cost of the receiving form. Full SCF accounting, financial statements, meeting within six months of closing (art. 584), JSC auditor with no size threshold. The form rents itself out every year, not once.

The conversion itself is now priced by the administration. Where the change of form does not give birth to a new company, the deed recording it bears the fixed duty on unnamed deeds of DZD 1,500; social deeds must be registered within one month of their date, with payment possible in three instalments (the General Directorate of Taxes's « registration duties » pages).

5. 5. Does changing form change your taxes?

The answer fits one sentence: the tax regime follows activity and turnover, not legal form. Two companies of different forms with identical activities bear the same corporate tax (article 150), and dividends everywhere bear the 10 % final withholding (article 104-I). Our article Legal form and turnover demonstrates that separation threshold by threshold.

Two crossings deserve anticipating. First, if the change of form coincides with a change of tax regime — such as opting for the real regime — know that this option must be notified before February 1st and is irrevocable: it gets prepared with the accounting, not with the notary alone. Second, the tax consequences of the conversion operation itself — contributions, revaluations, instruments put in place — call for named-person analysis: we publish no general rule here, because none survives the first particular situation.

6. 6. Should you change form? The questions in order

FAQ — Frequently asked questions

BENSAID Farouk

Financial & Economic Research Consultant — ProfitPilot NextGen Consulting

Certified sole trader and expert in financial studies, risk analysis and market research for SMEs, startups and investors in Algeria. View full profile