When creating a business, it is important to choose your legal status carefully and this choice should not be taken lightly. It is certainly difficult to navigate the maze of statuses. Here are some points to know about the different legal statuses, to help you choose the one that will be the basis of your business.
The entrepreneur must choose a legal status for his business, individual business or company, which will be the key to declaration formalities, his personal legal status, tax, administrative or social consequences. Creating a company actually consists of creating a new person legally distinct from the founding partners, which is called a “legal person”.
Setting up a business requires:
- to give it a name (company name or company name),
- to domicile it in suitable premises (head office),
- to provide him, according to his status, with a minimum of money and/or goods which will constitute his share capital,
- to designate one or more people responsible for administering it, but also representing it vis-à-vis third parties,
- to record in a contract all the rules which will govern its operation (the “statutes”).
Sole proprietorship
Each business must have a legal form when it opens. Thus, having simple administrative procedures, obtaining the status of a sole proprietorship is less costly. The sole proprietorship does not require any special contribution. Nowadays, the personal assets of the entrepreneur are protected by default, since the legislation automatically separates professional assets from personal assets. Ideal for less risky activities with limited investments, this status is recommended for businesses on a human scale.
The declaration of a sole proprietorship must be made in due form. In fact, this involves the declaration of the persons concerned, the tax regime, the social regime and the accounting obligations.
The different types of sole proprietorship
- Individual enterprise (EI): The entrepreneur is the only partner. This is the form chosen by the vast majority of business creators. The EI is a flexible legal form now offering protection of personal assets. The micro-enterprise regime (formerly self-enterprise) belongs to this category.
- Company in own name or in personal name: The identity of the company corresponds to that of the manager.
- Individual limited liability company (EIRL): Status removed for new creations, but existing structures continue to operate. It made it possible to separate personal assets from professional assets via designated assets.
- Single-member company with limited liability (EURL): Company which has a single partner, which in fact resembles a sole proprietorship, but which obeys the rules of an SARL.
The company
Unlike a sole proprietorship, a company does not require the involvement of its own assets, except in certain cases. More secure, the creation of a business under company status requires some additional formalities to be carried out, such as the publication of an advertisement in a legal notices newspaper.
A company must have a head office and a company name.ale. The use of company assets for personal purposes is considered abuse, which is why it is impurging you to manage your social capital well so as not to make mistakes. When making an important decision, there isThe formalities to be respected. It goes the same for the reports.
Types of companies
SA or Limited Company:
More legally suited to projects requiring significant and regular funds, the SA is the ideal status to convince potential investors. On the other hand, there is a disadvantage to take into consideration: the general director is liable to dismissal. It is a capital company, whose shareholder participation (at least 2, or 7 for a listed company) is based on the capital invested. It can be run by a board of directors with a CEO or by a supervisory board with a management board.
SAS or Simplified Joint Stock Company:
If you want to remain the sole master on board while raising funds in risk capital, the SAS is ideal. With its tailor-made statutes, it is possible to distribute power and choose the way the company operates. Each of the partners (at least 2, without maximum) is only responsible for debts up to their personal contributions. No minimum capital.
Simplified single-member joint stock company (SASU):
Company with a single partner taking on the characteristics of an SAS. Without minimum capital.
SARL or Limited Liability Company:
This is the most common status. The SARL is easy to manage and offers many advantages, such as limiting the responsibilities of the partners. Presentation of accounts to partners is essential once a year. The partners (between 2 and 100) are in principle only responsible for debts up to their personal contributions. No minimum capital.
Liberal practice company with limited liability (SELARL):
It allows you to practice a regulated liberal profession in the form of an SARL.
General partnership (SNC):
Company in which the partners (at least 2) have the status of merchants and are jointly and indefinitely liable for the debts of the company. No minimum capital. This form cannot be chosen for legal, judicial or health professions (excluding pharmacists).
Professional civil society (SCP):
Company allowing several members of a regulated liberal profession to carry out their activity jointly, even if each partner remains personally taxed on their share of profits.
When creating the company, choosing your status is essential. Each has its advantages and its disadvantages. However, before making your choice, call on a lawyer or a professional to sort out the formalities and all the important details related to the creation of your business.
Regardless of the company status chosen, you are required to file a legal notice.
