Do you know the difference between a customer and a patient? The former refers to a commercial activity, the latter to a liberal profession. While the similarities between the two worlds are particularly striking, they should not be confused.
Just as it's not a good idea to consider a doctor or physiotherapist as a customer, the legislator has decided not to confuse the legal status of commercial enterprises with the exercise of a liberal profession: a question of principle, surely.
And here again, you've noted the semantics: " commercial enterprises " and " exercising a liberal activity ". Although we can say "exercise of a commercial activity", we can't really talk about "liberal enterprises".
Let's take a look at SELARL and its advantages.
The Société d'Exercice Libéral à Responsabilité Limitée (SELARL) is, in many respects, a classic limited liability company(SARL), but designed for the liberal professions. This is all the more true as the SELARL can even take the legal form of an EURL, i.e. a company with just one partner (Entreprise Unipersonnelle à Responsabilité Limitée).
SELARLs are subject to corporate income tax.
So why distinguish between two very similar legal personalities? Because the practice of a liberal profession has always been considered a civil activity, not a commercial one. And yet, partners in commercial companies have merchant status. Although your pharmacy may sometimes resemble a grocery store, the two cannot be confused.
What prompted parliamentarians to pass the law of December 31, 1990 (which made the SELARL possible), was the need for liberal professionals to join together in various groupings to carry out their activities. The main problem at the time was the tax regime applicable to these legal entities. This did not facilitate financial investment.
However, opening the field of a legal status with commercial contours to the liberal professions has led the legislator to make a number of adjustments. This applies in particular to the question of intuitu personae.
Behind this Latinism lies the notion of a contracting party's personal qualities. In this case, intuitu personae in SELARLs has been strengthened, as it is considered particularly important. This is reflected in the following provisions of the 1990 law:
- Registered form of shares,
- Entry of new shareholders subject to a two-thirds majority,
- The name of one or more partners can be included in the company name,
- A partner may be dismissed unanimously, unless otherwise provided by the Articles of Association.
The legal status of the SELARL has thus succeeded in combining two aspects which, at first sight, are antinomic: the great independence of self-employed professionals and the important links between partners in a commercial company.
In addition to the distinctions relating to intuitu personae, mentioned above, it is necessary to add that :
- SELARL partners are self-employed,
- They may receive remuneration in connection with their corporate office,
- They may receive earnings from their professional activity,
- The majority shareholder is covered by the social security system for the self-employed,
- The manager may be covered by the general social security system if he or she is a minority or equal shareholder,
- There is no minimum capital requirement,
- The minimum number of associates is two (natural or legal persons),
- SELARLs must be represented by a manager named in the articles of association,
- The SELARL makes it possible to separate personal and professional assets,
- Partners may be held liable in the event of negligence,
- SELARLs must be approved by the professional association to which they belong.
Let's take a closer look at the advantages of SELARL.
The SELARL offers four main advantages:
- Financial benefits,
- Patrimonial benefits,
- Employee benefits,
- Tax benefits.
Before looking at each of these categories, let's start by saying that one advantage that precedes all the others is that its purpose is the joint practice of liberal professions. This legal form facilitates the grouping of professionals, enabling the pooling of premises, equipment and financial resources.
Talking about financial resources naturally brings us to the subject of financial benefits.
1. What are the financial advantages of a SELARL?
The first financial advantage of the SELARL is the possibility for outside investors to participate in the company. When you consider that some professions, such as cardiologists or dermatologists, depend on equipment worth hundreds of thousands of euros, outside help can be very welcome, especially when the initial share capital is low.
This is the second financial advantage of the SELARL. SELARLs are free to set their own share capital, with no minimum amount imposed on partners. However, in the case of contributions in kind, the intervention of a contribution auditor will be required if their value exceeds 7,500 euros.
This limit may also affect the second main type of benefit, that of patrimonial benefits.
2. Does the SELARL have any patrimonial advantages?
Yes, the SELARL is a legal status that ensures strict separation between the partners' personal and professional assets. Why is this advantage being called into question, as we suggested earlier? Because, in the case of major investments requiring the help of banks, the latter may demand personal guarantees, thus calling into question the distinction between professional and personal assets.
Another limit to this distinction is theprofessional liability of a partner in the event of personal fault. Any damages to which the partner is exposed involve both his professional and personal assets.
Where there's wealth, there's inheritance. This is the other asset advantage of the SELARL: it is transferable. As a result, liberal professionals can organize their professional succession or transfer their shares to their heirs.
3. Does the SELARL have employee benefits?
Yes, the SELARL offers significant social benefits, since the manager of such a structure can control his or her remuneration while keeping social security contributions under control. The SELARL thus offers a degree of social optimization.
4. Are there any tax benefits for SELARLs?
Not really. Like all non-one-person corporations, SELARLs are subject to corporate income tax. As such, the tax rate varies according to the opening date of the financial year.
For financial years starting on or after January1, 2022, the corporate tax rate will be 25%, more than 8% lower than the 33.33% rate applicable to companies opening their financial year in 2019.
This substantial reduction applies to all capital companies. It should also be noted that SMEs (of which SELARLs can be part) benefit from a reduced tax rate of 15% on the first 38,120 euros of profit corresponding to the first tranche of sales. To benefit from this rate, several cumulative conditions must be met:
- A minimum of 75% of the capital must be held by individuals,
- Sales must not exceed €7,630,000.
Like all non-one-person corporations, the company's managers benefit from flat-rate tax allowances. These allowances depend on the type of remuneration chosen:
- 10% deduction from remuneration for income tax purposes,
- 40% deduction from the progressive tax scale for dividend payments.
The SELARL is a particularly interesting legal form. It was created in 1990 to alleviate the difficulties experienced by the liberal professions in obtaining an appropriate civil legal status.
Very similar to commercial limited companies, SELARLs offer a number of advantages. SELARLs are particularly attractive in terms of investment ease, wealth transfer and protection of partners' personal assets.
Very similar to the SARL, the SELARL is one of the most popular legal forms for self-employed professionals.
