The terms "auto-entrepreneur" and "freelance" are often used interchangeably. Indeed, some people think that auto-entrepreneur status is like a default definition of freelance. In fact, the two terms refer to two different statuses.
Zoom in and find out more about each of them, and their differences!
DEFINITION
Definition: Theauto-entrepreneur status is one of the various possibilities available to any individual to pursue the activity of their choice as a self-employed person. And it's here that we need to clarify things: auto-entrepreneur is not a legal status, but a regime. In fact, auto-entrepreneur status is accompanied by a tax regime and a social security regime. To put it plainly, being an auto-entrepreneur means running your own business. For the latter, theauto-entrepreneur has a number of options in terms of tax and social security regimes. They can, for example, be self-employed under the micro-social regime, or be taxable (on income).
In short, an auto-entrepreneur is no more and no less than a sole trader with simplified tax and social security regimes.
These micro-regimes imply a number of different things: firstly, that the auto-entrepreneur is taxable on the basis of his or her sales, and secondly, that he or she is able to pay income tax as and when his or her sales increase. In addition, theauto-entrepreneur pays social security contributions only on the basis of the sales generated by his or her micro-business.
DEFINITION
Definition: A freelancer is a professional worker who offers services in a specific field of activity. In other words, they work on their own account for a clientele whose needs they can meet. Freelancers work for companies that outsource certain tasks, calling on them to carry them out. Being a freelancer can mean being an auto-entrepreneur, or a sole trader under the normal system, or even setting up your own company. But being freelance doesn't necessarily mean being an auto-entrepreneur. Some people are, but it's far from the norm.
One of the main characteristics of freelance status is the heterogeneity of the self-employed worker's situation.
Indeed, many freelancers work as nomads, so to speak. In other words, throughout their period of activity, they alternate between freelance status, fixed-term contracts and other contracts. Freelancers often work on a discontinuous basis.
The first major difference is that theauto-entrepreneur (or micro-entrepreneur) creates his own small business and works on his own account, in a sense being his own boss. A freelancer, on the other hand, offers a service and is, in effect, under contract to a company (or other entity). They must therefore meet the needs of their customers.
Another difference is that an auto-entrepreneur can hold down another job alongside his micro-enterprise. A freelancer cannot.
Lastly, microentrepreneurs can make their various real estate assets exempt from seizure if they are not being used for professional purposes. All they have to do is file a declaration with a notary's office. Freelancers do not have this option.
For someone just starting out,auto-entrepreneur status offers a number of advantages, such as the ability to pay social security contributions in proportion to sales. But its major drawback is the ceiling on sales. This restriction includes a limit on activity. In fact, the best formula may be to become an auto-entrepreneur to launch your business, and then move towards self-employed status.
It should be noted that both statutes have their advantages and disadvantages, and that the choice of one or the other depends on the activity carried out, forecast expectations and the individual case.
Written by our expert Simon Segura
June 21, 2017
