In short. The manager of an Algerian SARL must be a natural person (art. 576), appointed by shareholders holding more than half the capital, and removable by that same majority without the articles being able to tighten it (art. 579). Towards third parties he holds "the broadest powers" and binds the company even outside its corporate purpose (art. 577). Towards the company he answers on three grounds — breach of the code, violation of the articles, mismanagement (art. 578) — and where bankruptcy reveals a shortfall of assets, he must prove his diligence, rather than the receiver proving his fault. Five criminal offences target him specifically (art. 800 to 804), and article 805 extends them to anyone who manages in fact without being registered.
Key points
Chapter 01
How does someone become the manager of a SARL, and for how long?
Article 576 of the commercial code runs to three sentences, and each one dispels a common belief.
"The limited liability company is managed by one or more natural persons. The managers may be chosen from outside the shareholders. They are appointed by the shareholders, in the articles of association or by a subsequent instrument, under the conditions laid down in article 582, paragraph 1."
First sentence: a legal entity cannot manage an Algerian SARL. The text says "natural persons", with no alternative. A holding company may own 100 % of a SARL's shares; it cannot be its manager. It must appoint an individual.
Second sentence: the manager need not be a shareholder. This is the basis of salaried management, and it also makes possible the most delicate position in SARL law — a manager with no shares, removable by a majority he does not control, and yet personally liable.
Third sentence: the appointment majority is that of article 582 §1, namely more than half the share capital, not three quarters. Appointing a manager is not an amendment to the articles — unless, precisely, the articles name him: they must then be amended, which requires the three-quarters majority of article 586.
A drafting choice that is paid for ten years later. Naming the manager in the articles or by a separate instrument is not a formality. In the articles, removal appears to require an amendment to erase his name, whereas article 579 allows it with more than half the capital; in practice the conflict resolves in favour of article 579, which treats "any contrary clause" as unwritten, but it generates avoidable litigation. By separate instrument, both appointment and removal use the same simple majority, and the commercial register extract is enough to prove it.
And the term? The code says nothing. No maximum term, no minimum, no age limit, no renewal rule. The silence is total, and it is filled by the articles of association. Three options in practice: an open-ended term (the most common), a fixed renewable term, or a term tied to shareholder status. None is imposed; none is forbidden.
Chapter 02
What can the manager decide alone, and what goes back to the meeting?
The boundary is not found in the articles of association but in the division the law itself makes. Article 577 gives the manager, towards third parties, "the broadest powers to act in all circumstances in the name of the company, subject to the powers the law expressly grants to the shareholders." Everything turns on that reservation — and the list is short.
| Decision | Who decides | Majority | Text |
|---|---|---|---|
| Day-to-day management, purchases, contracts, hiring | The manager | — | Art. 577, 554 |
| Approval of the annual accounts | The meeting | > 1/2 of capital | Art. 584, 582 |
| Appointment and removal of a manager | The shareholders | > 1/2 of capital | Art. 576, 579 |
| Amending the articles (capital, purpose, seat, form) | The meeting | 3/4 of capital | Art. 586 |
| Consent to a third-party transferee | The shareholders | Majority representing ≥ 3/4 of capital | Art. 571 |
| Capital reduction | The meeting | Conditions for amending the articles | Art. 575 |
| Continue or dissolve after loss of 3/4 of capital | The shareholders, consulted by the manager | > 1/2 of capital | Art. 589, 803 |
Two points a quick reading misses.
Article 586 caps the majority itself: "in no case may the majority compel a shareholder to increase his shareholding." A capital increase voted by three quarters binds the company, never the wallet of a shareholder who declines to subscribe.
Article 587 imposes a step almost nobody anticipates: "except in the case of a transfer of shares to a third party, decisions of extraordinary general meetings must be preceded by a report prepared by an approved expert on the company's situation." Every EGM — capital increase, change of purpose, conversion into a SPA — therefore presupposes that report beforehand. A manager who convenes without having obtained it exposes the resolution.
The trap of the cap clause. Many Algerian articles of association cap the manager's signature. That clause works perfectly between shareholders — it makes exceeding the cap a fault under article 578 — but it cannot be raised against third parties: the contract concluded above the cap binds the company. The only cap that actually stops a transaction is the one filed with the bank as a signature mandate.
Chapter 03
Which statutory deadlines can a manager not afford to miss?
Five obligations are dated by the code, and four of them carry criminal sanctions. They form the backbone of a SARL manager's calendar.
| Deadline | Obligation | Text | Sanction |
|---|---|---|---|
| All year round | Keep available to every shareholder, at the registered office, the accounts, inventories, reports and minutes of the last three financial years | Art. 585(2) | Fine of DZD 20,000 to 200,000 (art. 801(3)) |
| 15 days before the meeting | Convene by registered letter stating the agenda, and communicate the accounts, draft resolutions and auditor's report | Art. 580, 584, 585(3) | Fine of DZD 20,000 to 200,000 (art. 801(2)); resolution voidable (art. 584) |
| 6 months after year-end | Hold the meeting and submit the inventory, accounts, balance sheet and management report | Art. 584 | 1 to 3 months' imprisonment and DZD 20,000 to 200,000 (art. 802) |
| Every financial year | Prepare the inventory, general operating account, profit and loss account, balance sheet and report on the year's operations | Art. 584, 801(1) | Fine of DZD 20,000 to 200,000 |
| 4 months after approval of the accounts | If net assets fall below a quarter of the capital: consult the shareholders on dissolution, then file and publish the decision | Art. 589, 803 | 1 to 3 months and DZD 20,000 to 100,000; any interested party may seek dissolution |
The first item is the most often forgotten, and the easiest to comply with. Article 585(2) is not a one-off duty before the meeting: the shareholder may come "at any time", inspect and take copies, and "be assisted by an approved expert". A manager who answers "come back at the general meeting" commits the offence of article 801(3).
The last item expresses one threshold in two ways. Article 589 speaks of "loss of three quarters of the share capital"; article 803 speaks of "net assets falling below a quarter of the share capital". Same situation, opposite framing. Article 803 supplies what article 589 omits: the starting point (approval of the accounts revealing the losses) and the deadline (four months).
One permanent obligation is cheap to meet. Article 804 requires that "all instruments and documents issued by the company and intended for third parties" state the company name preceded or followed by the words "Société à responsabilité limitée" or "SARL", the amount of the share capital, and the address of the registered office. The fine is modest — DZD 2,000 to 50,000 — but the offence is proved on the face of the document, and a non-compliant invoice takes thirty seconds to find.
The SARL manager's workbook
Ten sheets to fill in, not to read. They turn the duties in this guide into dated checks, to run once a year and before every sensitive decision.
- The manager's annual calendar, from accounts to general meeting, with the article and the penalty against each item
- The grid "is this act mine or the meeting's?", decision by decision
- The diligence file to start building today, with article 578 in mind
- The debit shareholder current account test, and the three grounds on which it exposes you
- The end-of-mandate checklist, from resignation to deregistration at the commercial register
Chapter 04
Remuneration, advances, contracts with the company: what the code allows
This is where Algerian law departs most from what foreign material describes — and it departs in both directions.
The manager's remuneration
The commercial code sets no cap, no calculation method and no competent body for fixing the remuneration of a SARL manager. The silence refers back to the articles of association and, failing that, to a collective shareholder decision under the majority of article 582. In our observed practice this is the safer route: remuneration paid without a traceable decision is an immediate point of scrutiny, for the tax administration and for the statutory auditor where one has been appointed.
For tax purposes, management remuneration is deductible from the company's result where it corresponds to genuine work and is not excessive, and it is subject to the progressive personal income tax scale in the recipient's hands. The switching point between remuneration and dividends is covered in detail in our dedicated article.
Agreements between the manager and the company
Here is the finding, and it deserves precise wording because it rests on the absence of a text. The chapter of the commercial code devoted to the SARL (articles 564 to 590 bis 2) contains no regime of regulated agreements and no prohibition on a manager borrowing from the company.
Those rules do exist in Algerian law — but for the joint-stock company. Article 628 makes any agreement between the company and one of its directors subject to prior board authorisation, following the auditor's report, and lays down an absolute prohibition:
"On pain of absolute nullity of the contract, directors of a company are prohibited from contracting loans from the company in any form whatsoever, from obtaining an overdraft from it in current account or otherwise, and from having it guarantee or endorse their commitments to third parties."
Article 671 extends the same prohibition to members of the management board and supervisory board. No equivalent text targets the manager of a SARL.
Do not confuse "not prohibited" with "risk-free." The absence of a prohibition in company law does not neutralise three other grounds, and that is where the trouble actually arises:
- tax recharacterisation of a debit shareholder current account as a distribution of profits;
- misuse of the company's assets or credit, article 800(4), where the use is contrary to the corporate interest and serves a personal end — an advance to the manager is the textbook case;
- the statutory auditor's review, where one has been appointed: a debit current account is a systematic audit point.
This reading rests on a negative finding — the absence of a text — and is therefore subject to expert validation. It is stated here with that reservation.
A corollary for choosing the legal form: what a SARL manager may do without prior authorisation, a SPA director may not do at all. It is an argument rarely raised when arbitrating between the two forms, and it is a concrete one.
Chapter 05
Resignation, removal, judicial removal: how does a management term end?
Article 579 organises the exit in three paragraphs, each opening a different route.
Removal by the shareholders — more than half the capital
"The manager may be removed by decision of shareholders representing more than half the share capital. Any contrary clause is deemed unwritten." The majority is calculated on capital, not headcount, and the articles can neither tighten nor loosen it. A clause requiring unanimity, or three quarters, is void.
Removal without just cause — valid, but compensable
"If removal is decided without just cause, it may give rise to compensation for the loss suffered." The text does not annul it: the manager is indeed removed, and may obtain damages. For the company, the issue is therefore not whether it can remove, but whether it can document the cause — which is where meeting minutes and breached statutory clauses acquire their value.
Judicial removal — the minority shareholder's route
"In addition, the manager may be removed by the courts for legitimate cause, at the request of any shareholder." No shareholding threshold applies. This is the only real lever a minority shareholder has against a majority manager, structurally immune to removal under paragraph 1. The code does not define "legitimate cause": it is assessed case by case.
And resignation? The code does not address it in the SARL chapter. In our observed practice it is freely exercised, subject to general law: an ill-timed resignation that leaves the company without a governing body at the worst moment may engage its author's liability. A resigning manager is well advised to prompt the appointment of a successor before leaving, and above all to check that the deregistration has actually been recorded at the commercial register.
The blind spot that costs the most. Until the change is published, the former manager remains, for a good-faith third party, the person on record. And article 577 protects precisely the third party who could not have known. A removal voted at a meeting and never filed produces full effect between shareholders and almost none externally. Publication is not administrative housekeeping: it is what actually closes the power.
Chapter 06
What is the manager's civil liability, and how far does it reach?
Article 578 is the central text. It sets out three distinct, cumulative grounds and two aggravating mechanisms.
"Managers are liable in accordance with the rules of general law, individually or jointly and severally as the case may be, towards the company and towards third parties, either for breaches of the provisions of this code, or for violations of the articles of association, or for faults committed by them in their management."
| Ground | What must be shown | Difficulty of proof |
|---|---|---|
| Breach of the code | Failure to comply with a specific article — meeting not held, accounts not prepared, documents not communicated | Low: the breach is objective |
| Violation of the articles | Exceeding a written clause — cap, prior authorisation, restricted purpose | Low, if the clause is clear |
| Mismanagement | A decision contrary to the corporate interest, or characterised imprudence | High: the code does not define the notion |
Note the reach of the text: liability runs "towards the company and towards third parties". An unpaid supplier, an employee or an administration may sue the manager directly, without going through the company, if they establish a fault and a loss of their own.
Making good a shortfall of assets — the paragraph that changes everything
"In addition, if the bankruptcy of the company reveals a shortfall of assets, the court may, on the receiver's application, decide that the company's debts shall be borne, up to the amount it determines, by the managers, whether or not shareholders, whether or not salaried, or by the shareholders, or by some of either, jointly and severally or otherwise, provided in the case of shareholders that they effectively took part in the management of the company."
Three things to remember, and they weigh heavily:
- Liability limited to contributions stops here. This is the single breach in that principle, and it opens at the precise moment the company can no longer pay.
- It can reach a shareholder, on the sole condition that he "effectively took part in the management". A shareholder who signs, negotiates and decides without a mandate is no longer a mere provider of capital.
- The burden of proof is reversed (§3): "to be discharged from liability, the managers and shareholders involved must prove that they devoted to the management of the company's affairs all the activity and diligence of a salaried agent." It is not for the receiver to prove fault; it is for the director to prove diligence.
The practical consequence is documentary, and it is prepared years in advance. Proving diligence means producing records: regular meeting minutes, accounts prepared and approved on time, written warnings to shareholders as the situation deteriorates, reasoned management decisions. A manager with no archive has nothing to offer. This is the one area of company law where record-keeping is not an administrative burden but insurance.
A special liability applies to capital increases by contributions in kind: article 574 makes "the company's managers and the persons who subscribed to the capital increase jointly and severally liable for five years, towards third parties, for the value attributed to contributions in kind". Five years, on the value adopted — not on the accuracy of the expert's report.
Chapter 07
Which criminal offences specifically target a SARL manager?
Title 2 of Book V devotes its first chapter to "offences concerning SARLs". Five articles, 800 to 804, and a sixth — 805 — that extends their reach well beyond the registered manager.
| Art. | Conduct | Penalty |
|---|---|---|
| 800(1) | Fraudulently attributing to a contribution in kind a value higher than its real value | 1 to 5 years' imprisonment and a fine of DZD 20,000 to 200,000, or either penalty |
| 800(2) | Distributing fictitious dividends, without an inventory or by means of fraudulent inventories | |
| 800(3) | Presenting shareholders with an inaccurate balance sheet to conceal the true situation | |
| 800(4) | Misuse of the company's assets or credit, in bad faith, for personal ends or to favour another interested business | |
| 800(5) | Misuse of powers or votes, in identical terms | |
| 801 | Failing to prepare the annual accounts; failing to communicate them 15 days before the meeting; failing to keep the last 3 years' documents available at the registered office | Fine of DZD 20,000 to 200,000 |
| 802 | Failing to hold the meeting within 6 months of year-end, or to submit the documents to it | 1 to 3 months and DZD 20,000 to 200,000, or either |
| 803 | Net assets below a quarter of the capital: failing to consult shareholders within 4 months, failing to file and publish the decision | 1 to 3 months and DZD 20,000 to 100,000, or either |
| 804 | Omitting, on documents intended for third parties, the company name followed by "SARL", the share capital and the registered office address | Fine of DZD 2,000 to 50,000 |
The two offences to know by heart are points 4 and 5 of article 800, because they punish a choice rather than a mistake. They require bad faith and a use "contrary to the interests" of the company, "for personal ends or to favour another company or business in which they had a direct or indirect interest." The wording covers the company vehicle used privately, cross-invoicing with a company owned by the manager, a guarantee given by the SARL for a personal loan, an advance never repaid.
Article 805: the end of the nominee. "The provisions of articles 800 to 804 apply to any person who, directly or through an intermediary, has in fact managed a limited liability company under cover of or in place of its legal manager."
Two symmetrical readings, both useful. For the person who runs the company without being registered: registering someone else offers no protection. For the person who agrees to be registered without running anything: he remains the legal manager, and article 805 adds the de facto manager beside him — it does not replace him.
Finally, these offences stack with general criminal law: breach of trust, forgery, fraudulent bankruptcy, and tax and social security offences fall under other texts and apply to a manager like anyone else.
Chapter 08
What actually protects a SARL manager?
Six measures, ranked by cost-to-effect ratio. None is theoretical: each answers an article cited above.
Keep the minute book, without exception
Article 583 requires that "every deliberation of the shareholders' meeting be recorded in minutes". This is the document that, in a shortfall-of-assets claim, evidences the diligence demanded by article 578 §3. Cost: nil. Effect: maximum.
Have the accounts approved within six months, every year
It is at once the duty under article 584, the offence under article 802, and the proof that shareholders were informed. A year left unapproved is a year in which the manager alone carries the risk.
Put delegations in writing, and limit them
A purchasing head or sales director has only the authority that was written down. An oral delegation does not exist in litigation — and an employee who signs without a mandate exposes the manager, not himself.
File a signature mandate with the bank
It is the only arrangement that actually blocks a transaction, where a clause in the articles merely opens a claim after the fact. Especially decisive with co-managers, since article 577 gives each of them the full external power.
Warn in writing as soon as the situation deteriorates
Long before the article 589 threshold, a letter to shareholders describing the deterioration and proposing measures does two things: it triggers their responsibility to decide, and it records the manager's diligence. It is the document almost always missing from shortfall-of-assets files.
Never leave a change of management unpublished
On the way in as on the way out. A removed but still registered manager retains, towards good-faith third parties, the appearance of authority that article 577 protects.
Disclaimer. This guide sets out the legal framework applicable at the update date shown, for general information. It is not legal advice and does not replace examination of a specific situation by a qualified professional. The articles cited are those of Book V of the Algerian commercial code in the version verified at the date shown in the sources block. Observations presented as practice come from the firm's engagements and are flagged as such; they are not rules of law.
Audit your management structure before the incident
Minute book, accounts approval deadline, written delegations, bank mandates, updating the commercial register: we review the points where a manager is genuinely exposed and turn them into a compliance plan.
Frequently asked questions
No. Article 576 of the commercial code requires one or more natural persons. A holding company may own all the shares of a SARL, but it must appoint an individual to manage it. The rule differs from that of the SPA, whose chairmanship is governed by other provisions.
The code sets no term. Article 576 states who appoints and by what majority, and nothing more: no maximum term, no age limit, no renewal rule. The silence is filled by the articles of association. Absent any stipulation, the mandate is open-ended and ends by resignation, removal or death.
The SARL chapter of the commercial code does not prohibit it — the express prohibition in articles 628 and 671 targets directors of joint-stock companies and members of the management board, not a SARL manager. But "not prohibited" is not "risk-free": the advance may be recharacterised for tax purposes as a distribution of profits, it is a systematic audit point for the statutory auditor, and it may amount to misuse of company assets under article 800(4) if it runs against the corporate interest. This finding rests on the absence of a text and is subject to expert validation.
Article 578 §2 allows the court, on the receiver's application, to place all or part of the company's debts on the manager where bankruptcy reveals a shortfall of assets — whether or not he is a shareholder, whether or not he is salaried. Liability limited to contributions stops at exactly that point. And §3 reverses the burden of proof: the manager must show that he devoted to the management "all the activity and diligence of a salaried agent". Without minutes, approved accounts and written warnings, that proof is very hard to produce.
Yes, and the removal remains valid. Article 579 provides only that, if decided without just cause, it "may give rise to compensation for the loss suffered". The required majority is more than half the capital, and no clause in the articles can tighten it. A minority shareholder also has a route of his own: asking the court to remove the manager "for legitimate cause", whatever the size of his holding.
Yes. Article 585(2) gives every shareholder the right to inspect, at any time and at the registered office, the general operating accounts, profit and loss accounts, inventories, reports and minutes for the last three financial years, with the right to take copies and to be assisted by an approved expert. Refusal is punishable by a fine of DZD 20,000 to 200,000 (art. 801(3)). It is not a duty confined to the run-up to the annual meeting.
No. Article 805 extends the offences of articles 800 to 804 to "any person who, directly or through an intermediary, has in fact managed" the SARL "under cover of or in place of its legal manager". A nominee does not remove the real director's liability — nor does it remove that of the registered manager, who remains the legal manager.
Sources and references
- Ordinance No. 75-59 of 26 September 1975 on the commercial code, Book V "Commercial companies" — articles 554, 574, 576 to 590 bis 2 (SARL), 628 and 671 (agreements and loans to directors of joint-stock companies), 800 to 805 (offences concerning SARLs); consolidated version of legislative decree No. 93-08 and ordinance No. 96-27 — Ministry of Trade and Export Promotion, Algeria · Verified on 2026-08-19