Sales agents: what legal form should they take?

A sales agent is someone who works independently and for another company.

It is defined as a service provider whose activity is the negotiation and conclusion of sales, rental, or purchase contracts for goods or services. But then what is the ideal legal form to carry out this activity?

Let's quickly go over the important information you need to know before you get started

Status of the commercial agent

A commercial agent is a natural or legal person who carries out their activity independently.

This is a representative who signs sales, purchase, rental, or service contracts in the name and on behalf of producers, manufacturers, or traders.

This agency agreement excludes any subordination link with its mandate(s). The activity of a sales agent is by nature non-commercial and does not require registration with the RCS (Trade and Companies Register). The sales agent can therefore register as an auto-entrepreneur, as an individual business under the real tax regime, or as a company.

Registration formalities for a sales agent

To register as a commercial agent, many formalities are required, and may vary depending on whether you are a physical or legal person.

In the case of a natural person 

A commercial agent is required to register on a specific register under the authority of the clerk of the commercial court before starting their activity. A registration file is then required, including a number of documents:

• Two completed and signed TNS forms
• Two completed and signed AC0 forms
• A photocopy of your ID
• A copy of the document signed with the principal. This document will stipulate the content of the established contract or another document proving the existence of the contract in question.
• A declaration of non-conviction
• If applicable, a declaration of non-seizability or proof of informing the spouse.

Once this file has been submitted to the registry, a receipt will be given to the self-employed person, certifying their declaration, in order to receive their registration number.

In the case of a legal entity 

The commercial agent must register with the RCS (Trade and Companies Register) and the register of commercial agents. The creation costs will be higher and the formalities more cumbersome. A registration file will also be required, with specific documents:

• Two completed and signed AC0 copies
• An extract of registration with the RCS (Registre du Commerce et des Sociétés - French Trade and Companies Register)
• A copy of the document established with the principal.
• A photocopy of the ID of the manager(s)
• A declaration receipt will also be provided, along with the registration number.

Which tax and social security system should I choose?

The tax and social security system for commercial agents is quite unique and worth looking into. From a social security point of view, if you're an individual, the business is run in your own name and falls under the Social Security for the Self-Employed.

For legal entities, commercial agents are subject to the employee scheme.

In terms of taxation, the system also differs depending on whether the agent is a natural or legal person. In the first case, the income generated will be subject to income tax (IR) in the BNC (Non-Commercial Profits) category.

If the sales agent is a legal entity, it will be subject to corporate income tax (IS), and will be taxed at 15% on profits if they exceed €38,120, then at the normal rate for the following euros.

Regardless of the status chosen, VAT will be applied, only if the self-employed individual is not subject to the micro-enterprise scheme.

Conclusion

A commercial agent's business can adapt to several types of legal structures, each suited to a specific professional project. Depending on the scale of the business, one legal structure will be more appropriate than another.

It is therefore necessary to think carefully, before creating your structure, about which type of status you should go for.