Self-employed And Sole Trader Business Structures In France

To setup a business in France you will need to establish a separate legal company structure which includes self-employed Entreprise Individuelle (EI), sole trader Entreprise Unipersonelle à Responsibilité Limitée (EURL), or limited company - Limited Company Société à Responsibilité Limitée (SARL).

Public limited companies, partnerships, professionals, and investment companies also have various legal structures. Those proposing to rent out a property require to establish a property company known as Société Civile Immobiliiére SCI. This can be used to let out unfurnished property.

In order to avoid additional costs, it is prudent to consider your company structure prior to setting up a business. If you choose to conduct business on a self-employed basis, you may have the liberty to transfer to a limited company. However, there are taxes and fees involved while transferring business assets. Whatever type of structure you choose will have an impact on your financial status, where you will be taxed on personal income or through the system of company tax. Social security contributions are also included.

Setting up business in France as a self-employed individual does not require the establishment of a separate legal or capital structure. The investment requirements are minimal and the risks involved are low. However, as a business owner you will have unlimited liability for any debts that the business incurs. You may protect your family home and other non-business property through a declaration d'insaisissabilité, which can be obtained from a notaire. Self-employed personnel are liable to pay personal income tax. Only commercial, industrial, or trade based businesses are taxed on the basis of a tax regime called Benefice Industrial Commercial (BIC) or Benefice Non Commercial (BNC). Social security contributions as a self employed individual are paid into travailleur non salariés (TNS) system. This system has a lower rate of contributions since you are liable to pay both employer and employee contributions.

Setting up business as a sole trader in France can be accomplished with the minimum of capital. As the owner, you are have limited liability from debts to the amount of initial capital. A sole trader has the title of Entreprise Unipersonelle à Responsibilité Limitée (EURL). Capital can be cash or assets without the need for any independent valuation on assets. If you need to seek a loan as finance, you may need to put up a collateral in the form of your home or personal assets, at the risk of losing limited liability. EURLs have the option of paying personal income tax or company tax on profits. However, social security contributions are mandatory. A person known as a gérant needs to be appointed with formal legal responsibilities for running the business. As the business owner you can take on the responsibility.

For more than one owner you will need to form a private limited company or SARL. The same rules applicable to that of a sole trader EURL are pertinent to sole traders SARLs. However, taxation is based on company tax. Whatever structure you choose, make sure you have all the relevant information in order to initiate a smooth induction into the business world in France.