And indeed, these two schemes are often presented in a rather blurred way and seem very abstract. Yet they have in fact been one and the same since January 2016!
Find out more about the new micro-enterprise scheme in this article.
An auto-entrepreneur is first and foremost a self-employed worker who benefits from a simplified system.
Indeed, the payment of taxes, social security contributions and social security contributions will be much simpler than for a company, as it will be replaced by a payment proportional to sales.
This scheme was open to employers or self-employed workers with sales of less than 82,800 euros for the sale of goods and 33,100 euros for the provision of services.
A micro-enterprise is a small business (fewer than ten people), not a self-employed person. Like the auto-entrepreneur scheme, it benefits from a simplified tax regime.
Over the past few years, the auto-entrepreneur and micro-entreprise regimes have been converging, until they merged on January 1, 2016. So, even if the two concepts overlap different realities, they benefit from the same legal status and social regime. This regime has retained the name of micro-enterprise, and borrows many of the characteristics of this structure.
In short, auto-entrepreneur status no longer exists
It is therefore totally assimilated to the micro-enterprise, and therefore to the micro-entrepreneur status.
The newly-created micro-enterprise is aimed at companies whose profits do not exceed the ceilings previously set under the auto-entrepreneur scheme. By adopting the micro-business regime, they will not have to pay VAT.
At present, micro-enterprises are essentially based on the micro-social regime.
This means that the company's social charges are calculated on the basis of sales, as under the former auto-entrepreneur scheme. In addition, the micro-entrepreneur can also opt for the simplified micro-social regime, in order to benefit from withholding tax at source for income tax. This will enable the micro-entrepreneur to benefit from a reduced tax rate.
Another advantage of the micro-enterprise scheme is that the formalities involved in setting up and running a business are straightforward. From a legal point of view, the micro-enterprise must be registered with the Urssaf or the Trade Register, and therefore obtain a Siret number, which is possible via a simple online request. It is also necessary to have a separate bank account from that of its creator, but micro-enterprise accounting can be kept much more flexibly than in the case of a normal business (a simple budget is required). For example, all you need to do is declare your sales on the official online portal, and you'll be in compliance with the law.
Micro-enterprise remains a very attractive option when setting up a business.
Micro-enterprise is a very attractive solution for start-ups
In fact, it simplifies many of the formalities involved in running a business. In some cases, however, it may be worthwhile to switch to another system.
So if your company's social security contributions are higher than the flat-rate allowance under the micro-enterprise tax system, it would be preferable to opt for the actual tax system (or the controlled declaration system for self-employed workers).
On the other hand, the micro-business regime doesn't provide optimum protection for your personal assets. To remedy this, you can set up a company to replace your business, or opt for the EIRL (Entrepreneur Individuel à Responsabilité Limitée) scheme. In either case, you'll need to change your business regime.
Finally, as your business grows, it may be worth leaving the micro-enterprise system. Firstly, it doesn't allow you to deduct actual business expenses from sales, and secondly, it doesn't allow you to receive certain government grants.
Microentrepreneurship is just around the corner!
Written by our expert Audrey Nouvel
August 31, 2017
