French Company Types – COMPARISON TABLE: all you need to pick the best one for you

Company comparison table

What is the required number of partners required?What is the minimum volume of the equity?Who runs the company?
sole proprietorship

(fr: EI)

– It consists only of the individual entrepreneur

– (He can, of course, hire employees).

– No notion of equity– It consists only of the individual entrepreneur
one-person limited liability undertakings

(fr: EURL)

– Only 1– Equity volume set by the associates

– 20% of the cash contributions have to be given when the company is created, the balance set to be released within 5 years.

– a manager

– he is either the only associate, or a third party

LLC

(fr: SARL)

– Between 2 and 100– Equity volume set by the associates

– 20% of the cash contributions have to be given when the company is created, the balance set to be released within 5 years.

– 1 or more manager(s)

– they are either associates, or third parties

public limited company

(fr: SA)

– At least 2 if the company is not listed

– At least 7 in the company is listed

– At least 37 000€

– 50% of the cash contributions have to be given when the company is created, the balance set to be released within 5 years.

– a board of directors of 3 to 18 members, who must be shareholders.

– The chairman is appointed by the board of directors from among its members.

– A general manager may also be appointed to represent the company.

Simplified joint stock company

(fr: SAS/SASU)

– At least 1– Equity volume set by the shareholders

– 50% of the cash contributions have to be given when the company is created, the balance set to be released within 5 years.

– 1 president

– the associates determine the rules he must follow in the by-laws

partnership

(fr: SNC)

– At least 2– Equity volume set by the associates

– 1 or more manager(s)

– they are either associates, or third parties

cooperative companies

(fr: Scop)

– At least 7

– At most 100 for SARL Scop

– At least 18 500€ for SA Scop

– At least 30€ for SARL/SA Scop

– a manager elected by the associates for either 4 or 6 years (6 years for SA Scop)
Association– At least 2– No notion of equity

– The association can collect contributions from members

– Members may also make contributions in kind

– Its management is chosen freely.

– The association is often run by a board of directors, which generally elects an office composed of a president, a treasurer and a secretary.

 

How liable are the associates?How liable are the leaders?How are profits taxed?
sole proprietorship

(fr: EI)

– the main residence is protected

– personal property can be protected by a “declaration of non-seizability”

– for a EIRL, personal assets and professional assets can be separated

– Civil and legal liability of the leader

 – Income tax

– Possibility of instead choosing the corporate tax for EIRLs

one-person limited liability undertakings

(fr: EURL)

– The liability of the partner is limited to the amount of his contributions, unless he has committed mismanagement or granted personal guarantees.– Civil and legal liability of the leader

 – Income tax

– Possibility of instead choosing the corporate tax

LLC

(fr: SARL)

– The liability of partners is limited to the amount of their contributions, unless they committed mismanagement or granted personal guarantees.– Civil and legal liability of the leader(s)

– Corporate tax

– Possibility of instead choosing the Income tax for familial SARLs

– Under certain conditions, income tax is also possible for SARLs less than 5 years old

public limited company

(fr: SA)

– The liability of partners is limited to the amount of their contributions– Civil and legal liability of the leader(s)

– Corporate tax

– Under certain conditions, income tax is also possible for SAs less than 5 years old

Simplified joint stock company

(fr: SAS/SASU)

– The liability of partners is limited to the amount of their contributions– Civil and legal liability of the leader(s)

– Corporate tax

– Under certain conditions, income tax is also possible for SAs less than 5 years old

partnership

(fr: SNC)

– Partners are infinitely liable– Civil and legal liability of the leader(s)

– Each associate is taxed based on their benefits under the income tax

–  A possibility of instead choosing the corporate tax

cooperative companies

(fr: Scop)

– The liability of partners is limited to the amount of their contribution– Civil and legal liability of the leader(s)

 – Corporate tax

– Tax exemption for the portion of profits distributed to employees in under the heading of participation and for the portion set aside intended to be invested

Association– No liability – Civil and legal liability of the leader(s)

– liability can be toned down if the leader is unpaid

– Associations that make profits for profit are subject to VAT and must pay corporation tax at the normal rate.

– Non-profit associations benefit from a reduced IS rate on their own property income.

– In addition, non-profit associations whose commercial revenue does not exceed € 60,000 per year are exempt from commercial taxes: corporation tax, VAT, territorial economic contribution.

 

Is the revenue of the director tax deductible from the company profits?What is the tax system for the director?What is the social regime for the director?
sole proprietorship

(fr: EI)

– No, except If the Corporate tax was chosen in the case of the EIRL – Income tax in the category that corresponds the activity of the company– For the director: “self-employed persons” regime
one-person limited liability undertakings

(fr: EURL)

– No, except If the Corporate tax was chosen, or if the manager is not the only associate– If the corporate tax is chosen for the company: income tax either in the “industrial and commercial profits” category or in the “non-commercial profits” category

– if the income tax is chosen for the company: income tax in the “wages and salaries” category

– Since 2017, if the income tax is chosen for the company, it is also possible to choose the “micro-company” regime

– if the director is the only associate: “self-employed persons” regime

– if the director is a third-party: “employee” regime

LLC

(fr: SARL)

 – Yes, unless the income tax was chosen– Salaries and wages, unless the income tax is chosen for the company

– if the manager owns more than 50% of the shares: “self-employed persons” regime

– if the manager 50% of the share or less: “employee” regime

public limited company

(fr: SA)

  – Yes, unless the income tax was chosen– Salaries and wages for the president of the board, unless the income tax is chosen for the company

– For the director: “employee” regime

– the other members of the board aren’t paid for their work as directors, so they don’t belong to any social of these social regimes

Simplified joint stock company

(fr: SAS/SASU)

  – Yes, unless the income tax was chosen– Salaries and wages for the president, unless the income tax is chosen for the company– For the director: “employee” regime
partnership

(fr: SNC)

  – No, except If the Corporate tax was chosen– income tax in the “industrial and commercial profits” category– For the director: “self-employed persons” regime
cooperative companies

(fr: Scop)

– Yes– Salaries and wages– for the executive managers: “employee” regime (in particular when it comes to unemployment insurance
Association– Yes, under certain conditions– If the director is paid, Salaries and wages– For the directors: “employee” regime under certain conditions

 

What is the social regime for the associates?Who makes the decisions?Is appointing an auditor required?
sole proprietorship

(fr: EI)

– There are no associates– the entrepreneur is alone– No
one-person limited liability undertakings

(fr: EURL)

– “self-employed persons” regime– the manager, but his powers can be limited if he is not the only associateSame as the LLC (SARL)
LLC

(fr: SARL)

– “employee” regime (as long as they have an employment contract)– for everyday management: the manager

– for decisions for which the manager does not have the authority: the Ordinary General Meeting

– for decisions to change the company by-laws: the Extraordinary General Meeting

– No, unless 2 out of 3 of the following conditions are met:

  1. The result is superior to
    1 550 000 €,
  2.  Sales revenue (pre-tax) is superior to
    3 100 000 €
  3. The company has more than 50 employees
public limited company

(fr: SA)

– “employee” regime (as long as they have an employment contract)– for everyday management: the manager if there is one. Otherwise, the president

– for decisions for which the manager does not have the authority: the Ordinary General Meeting

– for decisions to change the company by-laws: the Extraordinary General Meeting

 – Yes
Simplified joint stock company

(fr: SAS/SASU)

– “employee” regime (as long as they have an employment contract)– The associates are free to determine the company states, as well as how decisions are taken.

– Some decisions, such as the approval of accounts still have to be taken collectively.

– No, unless 2 out of 3 of the following conditions are met:

  1. The result is superior to
    1 000 000 €,
  2. Sales revenue (pre-tax) is superior to
    2 000 000 €
  3. The company has more than 20 employees
partnership

(fr: SNC)

– “self-employed persons” regime– Same as the LLC (SARL)Same as the LLC (SARL)
cooperative companies

(fr: Scop)

– “employee” regime (as long as they have an employment contract)– Deliberations are voted for in the General Assembly, following the rule: “1 associate = 1 vote” (no matter how much contribution was made)

– Yes for the SA Scop

– Same as the SARL for the SARL Scop

– Same as the SAS for the SAS Scop

Association– The members who aren’t directors can have an employment contract– Freedom of contract– No, except in a few cases (when subventions obtained by the association exceed a certain level)

 

How to transfer the business?
sole proprietorship

(fr: EI)

– for artisans and merchants: by transfer of goodwill

– for liberal professions: by presenting the customer base

– possible to give the elements making up the business to the equity of a business in creation, or to transfer the operation of the activity to a third-party (lease-management)

one-person limited liability undertakings

(fr: EURL)

– by transfer of shares
LLC

(fr: SARL)

– by transfer of shares
public limited company

(fr: SA)

– by transfer of shares, unless otherwise specified in the company by-laws
Simplified joint stock company

(fr: SAS/SASU)

– by transfer of shares
partnership

(fr: SNC)

– by unanimous transfer of shares by the associates
cooperative companies

(fr: Scop)

– by transfer of shares

– The shares have to be sold at their nominal value

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