Different one-person companies
Do you want to start your business alone, without a partner? Do you want for your business to stay that way? If so, one of the following one-person company types can be just what you need:
- The sole proprietorship. It can have the classic regime, the micro-entrepreneur regime or the EIRL regime,
- The company. It can be an EURL or a SASU
If you choose the sole proprietorship, and if you are subject to the tax regime of the micro-enterprise, you will automatically benefit from the simplified system of calculation and payment of social charges, and you will be a micro-entrepreneur.
You can also opt for the regime of the Individual Entrepreneur with Limited Liability (EIRL) which will allow you to limit your liability, and if necessary, to opt for the corporate tax.
Summary
- Types of projects/activities
- Equity/Contributions
- Director
- Tax system
- Social system
- The way it functions
- Paperwork
- Transferring the business
- Advantages/disadvantages
1- Types of projects/activities
| Sole proprietorship | EURL | SASU | ||
| Classic Regime | Micro-Entrepreneur | EIRL | ||
| The founder | ||||
| The sole entrepreneur | The sole associate (“Natural person” or “Legal person”) | The sole associate (“Natural person” or “Legal person”) | ||
| Types of projects | ||||
| Perfect for small activities that don’t require much investment | Perfect for small activities and ancillary activities that don’t require much investment, and those functioning with the Micro-Company tax regime | Perfect for small activities that don’t require much investment, but that require more formalism while creating and running the company than those with the Classic regime | Perfect for all project, as long as the certain formalism while creating and running the company doesn’t bother too much | Perfect for all project, as long as the very restricting strict formalism while creating and running the company doesn’t bother too much |
| Activity/Company purpose | ||||
| Every activity | Commercial activity, artisanal activity, or liberal activity dealing with aging, or social regime
|
Every activity | Every activity except:
· Investment of savings · Tobacco shops |
Every activity except: • Artist placement agencies • Tobacco shops |
2- Equity/Contributions
| Sole proprietorship | EURL | SASU | ||
| Classic Regime | Micro-Entrepreneur | EIRL | ||
| Volume of equity | ||||
| No notion of equity | The associates are free to determine the volume of equity in the company by-laws | |||
| Contributions | ||||
|
· Contributions in Cash · Contributions in Kind · Contributions in Industry (putting one’s workforce or technical knowledge at the disposal of the company) |
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| Payment of contributions | ||||
|
Contributions in kind: Fully paid when the company is created Contributions in cash: Only 20% have to be paid when the company is created, but they must be fully paid before 5 years |
Contributions in kind: Fully paid when the company is created Contributions in cash: Only 50% have to be paid when the company is created, but they must be fully paid before 5 years |
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3- Directors
| Sole proprietorship | EURL | SASU | ||
| Classic Regime | Micro-Entrepreneur | EIRL | ||
| Who runs the company? | ||||
| The sole entrepreneur | One manager. He has to be a Natural Person (an individual) |
Freedom to define it in the company by-laws. There has to be at least one president. He can be a Natural or Legal person, an associate or not |
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| Appointment/dismissing of directors – duration of functions | ||||
|
Either the methods are defined in the by-laws, or the sole associate decides. If the duration isn’t defined in the by-laws, there is no limit on the duration. |
Freedom to define it in the company by-laws. | |||
| Powers of directors | ||||
| Unlimited. The entrepreneur runs his company alone. |
Towards third parties: the director has full powers to act in the name and in the interest of the company. For internal affairs: if the director is a third party, by-laws can limit his powers by making sure that certain actions need to be approved by the sole shareholder first. |
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| Liability of the director | ||||
|
For the debts of the company: unlimited liability. Their personal assets can be seized, except for the main residence. Personal property can be protected by a “declaration of non-seizability” Civilly and legally liable up to their personal assets |
For the debts of the company:
Liable up to professional assets (Personal property can be protected by a “declaration of non-seizability”)
Civilly and legally liable up to their personal assets |
For the debts of the company: No liability Civilly and legally liable up to their personal assets |
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4- Tax system
| Sole proprietorship | EURL | SASU | ||
| Classic Regime | Micro-Entrepreneur | EIRL | ||
| Taxes on company profits | ||||
|
Income tax (BIC, BA or BNC Category) |
Income tax
(BIC or BNC Category depending on the company)
Option of a “Discharge payment” |
Income tax
(BIC, BA or BNC Category)
Option to choose the Corporate tax under certain conditions. This decision cannot be changed. |
Income tax
(BIC, BA or BNC Category) in the name of the sole associate. If the manager is the sole associate, he can be taxed under the “Micro-company” regime.
Option to choose the Corporate tax under. This decision cannot be changed. |
Corporate Tax. Option of instead choosing the Income tax for SASUs less than 5 years-old. |
| Is the remuneration of the director tax-deductible? | ||||
| No | No, unless the Corporate Tax is chosen | Yes, unless the Income Tax is chosen | ||
| How is the remuneration of the director taxed? | ||||
| The taxation of company profits under the Income Tax already includes the taxation on the remuneration of the director. | If the company is subject to the Income tax: This already includes taxation in the remuneration of the director.
If the manager is the sole associate, the Micro-Company regime is also possible.
If the company is subject to the Corporate Tax: their remuneration is subject to the Income tax in the “Wages and salaries” category |
If the company is subject to the Income tax: This already includes taxation in the remuneration of the director If the company is subject to the Corporate Tax: their remuneration is subject to the Income tax in the “Wages and salaries” category |
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5- Social system
| Sole proprietorship | EURL | SASU | ||
| Classic Regime | Micro-Entrepreneur | EIRL | ||
| The social regime of the director | ||||
| Non-Salaried Worker | Non-Salaried Worker
A simplified method of calculating social contributions (“Micro-company regime”) |
Non-Salaried Worker | If the manager is the sole associate:
Non-Salaried Worker
If the manager is a third-party: Employee |
Employee |
| Social security contribution base | ||||
| Taxable profit | Turnover | If subject to Income tax:
Taxable profit
If subject to Corporate tax: Net pay + proportion of dividends superior to 10% of equity (or 10% of net profits if it is superior to equity) |
If subject to Income tax:
Taxable profit
If subject to Corporate tax: Net pay + proportion of dividends superior to 10% of equity, share premiums and money transferred in current accounts |
Net pay |
6- The way it functions
| Sole proprietorship | EURL | SASU | ||
| Classic Regime | Micro-Entrepreneur | EIRL | ||
| Imperatives for the company to function | ||||
| The micro-company has to be created less than 12 months after a bank account for its activity is opened | Open one or more bank accounts for the activity defined by the “declaration of allocation”
Having an autonomous accounting for this activity
Publishing the account to the register where the declaration of allocation was deposited |
Nomination of director(s) in the company by-laws (and defining their remuneration) Keeping a register of the decisions of the sole associate Publishing the annual accounts and the inventory to the Commercial Court Keeping a management report (unless the company is exempt from doing it) |
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| Auditors | ||||
| No | No, unless 2 out of 3 of these conditions are met:
– balance sheet > – Gross turnover > – more than 50 employees |
No, except under certain conditions | ||
7- Paperwork
| Sole proprietorship | EURL | SASU | ||
| Classic Regime | Micro-Entrepreneur | EIRL | ||
| The paperwork itself | ||||
|
Declaration the activity to the CFE and registering the company in either the RCS, RM or RSAC depending on the nature of the activity No need to define by-laws |
Declaration the activity to the CFE
Registering the company in either the RCS, RM, RSEIRL or RSAC depending on the nature of the activity
– No need to define by-laws |
Defining by-laws
An optional by-laws model is given free of charge by the CFE |
Defining by-laws The associate has great freedom when defining by-laws |
|
| Cost and paperwork of creating the company | ||||
|
Registration to the RCS for merchants: 34€ Registration to the RM for artisans: 190€ (can vary) Registration to the Urssac for liberal professions: free Registration to the RSAC for commercial agents: 26€ |
Free of charge | To declare the company: see Sole proprietorship
Declaration of assets: 55.97€ for liberal professions |
Fees to publish the news in a specialized newspaper: 190€
Registering to the RCS: 84€ |
Fees to publish the news in a specialized newspaper: 230€ Registering to the RCS: 50€ |
8- Transferring the business
| Sole proprietorship | EURL | SASU | ||
| Classic Regime | Micro-Entrepreneur | EIRL | ||
| Transferring the business | ||||
|
Transferring of customer lists or goodwill Transferring of the sole proprietor’s capital into company capital Leasing |
Transferring of customer lists or goodwill Transferring of shares |
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9- Advantages/Disadvantages
| Sole proprietorship | EURL | SASU | ||
| Classic Regime | Micro-Entrepreneur | EIRL | ||
| Advantages | ||||
|
Simple to create Simple when operating |
Being able to limit sizeable assets
Being able to opt for the corporate tax under certain conditions (though this decision cannot be changed)
|
Liable only up to the contributions (except if the liability of the director is incurred)
A structure able to evolve (for example, being able to have new employees)
Choosing the tax regime
Simple when operating |
Liable only up to the contributions (except if the liability of the director is incurred) A structure able to evolve (for example, being able to have new employees) Choosing the tax regime The social regime of employees for directors |
|
| Disadvantages | ||||
|
Unlimited liability (except for the main residence) The “declaration of non-seizability” still possible for property |
A lot of paperwork
High cost of creating and maintaining the company |
High cost and paperwork when creating the company | ||
