Setting up a French SAS for a hardware startup is not the same exercise as incorporating a SaaS company. IP assignment for prototypes, manufacturing contracts with suppliers, and a cap table built to survive two or three funding rounds all need to be locked down before you file with the greffe — not patched in later.
- French SAS setup for a hardware startup needs custom bylaws covering IP assignment, not a generic template — verdict: build custom.
- BSPCE equity plans keep engineering hires aligned without early dilution; Lina delivers a plan in about 36 hours in 2026.
- Cap tables designed for one funding round break at Series A when a hardware startup needs a second tranche — plan for two rounds minimum.
- Skip incorporation packages that ignore manufacturing and supply contracts — due diligence gaps show up fast at term sheet stage.
Why this matters
A hardware startup carries legal risk a software company doesn't: tooling investments, supplier contracts governed by foreign law, firmware embedded in a physical product, and IP that spans patents, trade secrets, and design rights at once. The SAS structure gives you flexibility on governance and share classes — but only if the bylaws and shareholders' agreement are drafted around your actual business, not a generic startup template.
By 2026, French VCs and international investors expect a cap table and a pacte d'associés that already anticipate a Series A round, drag-along and tag-along clauses included. Getting this wrong at incorporation means renegotiating governance under time pressure during your first term sheet — a cost you can avoid.
Who this is for
This guide is for founders building physical products — IoT devices, robotics, cleantech hardware, or connected consumer electronics — who are incorporating in France or need a French entity for manufacturing, EU market access, or fundraising. It applies whether you're a French founding team or an international team setting up a French subsidiary to run European operations.
If your hardware startup already has a term sheet on the table, or expects one within 12 months, the SAS setup decisions below directly affect how fast that round closes.
What to look for in a French SAS setup for a hardware startup
Governance built for a president-led SAS, not committee paralysis
A SAS lets you designate a single président with clear decision authority, which matters when supplier negotiations and manufacturing decisions need to move fast. Bylaws that require board approval for every operational decision slow down a hardware startup that's juggling tooling deadlines and component lead times.
IP assignment clauses that cover prototypes, firmware, and patents
Hardware IP sits in multiple places at once: mechanical design, firmware, and sometimes a patent filing. Bylaws and employment contracts need explicit assignment language covering all three, or you risk an investor's due diligence team flagging unclear IP ownership during a Series A.
A cap table structured for at least two funding rounds
Hardware startups typically raise a seed round for prototyping and a Series A for manufacturing scale-up — sometimes with a bridge in between. A cap table and pacte d'associés drafted for a single round creates renegotiation friction when the second round arrives in 2026 or 2027.
BSPCE terms that price engineering hires correctly
Hardware teams need mechanical, firmware, and hardware engineers early, and BSPCE (French stock options) are the standard tool to compete on total compensation without cash. Vesting schedules and strike prices need to match the risk profile of a pre-revenue hardware company, not a generic four-year template copied from a SaaS playbook.
Manufacturing and supply contracts reviewed under the same governance
Supplier agreements, NDAs with contract manufacturers, and cross-border component sourcing contracts should be reviewed alongside the SAS bylaws, not as an afterthought. A supply agreement signed under the wrong jurisdiction clause becomes expensive to unwind once production has started.
Top picks: what to prioritize in your SAS setup
The foundation pick — customized SAS bylaws. Bylaws that explicitly cover IP assignment, president mandate scope, and share class flexibility give a hardware startup room to raise multiple rounds without rewriting governance each time. Customized SAS bylaws drafted around your specific business, rather than a generic template, is the single highest-leverage document in the entire setup. Buy.
The alignment pick — a pacte d'associés (shareholders' agreement). This covers drag-along, tag-along, vesting for founders, and exit mechanics between co-founders — all essential once a second hardware round brings in a new lead investor. Buy.
The equity pick — a BSPCE plan for engineering hires. A BSPCE equity plan with vesting terms matched to hardware development timelines helps you compete for scarce mechanical and firmware engineers in 2026 without burning cash reserves. Consider — size the pool against your actual 18-24 month hiring plan, not a rule-of-thumb percentage.
The IP pick — a protection strategy for embedded IP. Hardware IP spans patents, trade secrets, and design rights simultaneously, and a deeptech IP protection framework built into the incorporation process closes gaps before an investor's due diligence team finds them. Buy.
The wildcard — a generic online SAS formation package. These packages file your bylaws with the greffe fast and cheap, but they rarely address IP assignment for physical products or cap tables built for multiple funding rounds. Skip — the savings disappear the first time an investor's lawyer flags a governance gap.
Get your SAS set up right the first time
Fixed fee, lawyer response within 30 minutes, delivery in about 36 hours.
What to avoid
- Generic incorporation templates that skip IP assignment for hardware. Software-first templates rarely address firmware, prototypes, or patent assignment — all standard exposure points for a hardware startup.
- A cap table sized for one funding round. Hardware startups almost always need a second round to fund manufacturing scale-up; a cap table that doesn't anticipate this forces a costly renegotiation.
- Signing manufacturing or supply contracts outside the incorporation review. A supplier agreement under an unfavorable jurisdiction clause, signed before your SAS bylaws are finalized, can undercut governance you've just built.
Verdict comparison table
| Criteria | Why it matters for a hardware startup | Verdict |
|---|---|---|
| Custom SAS bylaws | Covers IP assignment and president mandate in one document | Buy |
| Pacte d'associés | Locks drag-along, tag-along, and vesting before the next round | Buy |
| BSPCE equity plan | Prices engineering hires against actual hiring timeline | Consider |
| IP protection framework | Closes gaps before Series A due diligence | Buy |
| Generic formation package | Skips hardware-specific IP and cap table structuring | Skip |
FAQ
How long does French SAS setup take for a hardware startup in 2026?
A standard SAS incorporation with custom bylaws typically closes within days once the scope is agreed, with Lina quoting a fixed price within one hour and delivering documents in about 36 hours in 2026. Complex IP assignment or multi-founder cap tables can extend this timeline.
Do hardware startups need different SAS bylaws than software startups?
Yes. Hardware startups need explicit IP assignment language covering prototypes, firmware, and patents, plus governance that supports manufacturing decisions, which generic software-first templates rarely include.
What is a BSPCE and does a hardware startup need one?
A BSPCE is a French stock option instrument used to compensate employees without cash. Hardware startups use it to compete for mechanical and firmware engineers, with vesting terms matched to hardware development timelines rather than generic four-year schedules.
Is a SAS better than a SARL for a hardware startup?
A SAS is generally the better fit for a hardware startup planning to raise venture capital, because it allows flexible share classes and a president-led governance structure that SARLs don't support as cleanly.
How much does French SAS setup cost for a hardware startup?
Cost depends on the complexity of the bylaws, IP assignment clauses, and cap table structure. Lina provides a fixed-price quote within one hour of scoping the work, so costs are known before drafting starts.
What IP protection does a hardware startup need at incorporation?
At minimum, IP assignment clauses in bylaws and employment contracts covering prototypes, firmware, and any patent filings. Startups with proprietary hardware designs often add a dedicated IP protection framework alongside incorporation.
Can a foreign founder set up a French SAS for a hardware startup?
Yes. Foreign founders commonly set up a French subsidiary or standalone SAS to access EU manufacturing and funding, with local governance and filings handled alongside the parent structure.
One last thing
Most hardware startups treat SAS bylaws as a filing formality and treat the pacte d'associés as the "real" governance document to fix later. That order is backwards: 82% of the volume work in a Lina incorporation — bylaws, cap table structuring, BSPCE drafting — is handled by AI agents in 2026, with a senior lawyer reviewing and signing off before anything is filed. Reserve a board seat structure for your future Series A investor in the bylaws now; redrafting it after a term sheet is signed costs more in negotiation time than it does in legal fees.