EURL expenses

An EURL is a single-member limited liability company. This legal structure is relatively straightforward to understand and was specifically designed to make it easy to start a business.

Unlike an SARL, an EURL is unique in that it is owned by a single shareholder, who is not personally liable for the company’s debts with their entire personal assets.

List of expenses for a single-member limited liability company (EURL)

There are several expenses to anticipate when you set up your EURL. These include tax, social security, and operating expenses.

Tax expenses

The most significant tax burden is undoubtedly the tax on the EURL’s profits. There are two possible tax regimes:income tax (IR) or corporate tax (IS). The first option involves a traditional tax on the entity’s net profits . These profits are calculated as revenue minus deductible expenses.

The IS, on the other hand, is specific to the EURL tax regime and allows for the separation of the company’s profits from its manager’s income. To choose this option, a formal request must be submitted, as the IR is applied by default.

Another tax liability to consider is value-added tax (VAT). An EURL is subject to VAT depending on its business activities and the tax regime it has adopted. The VAT exemption threshold applies if the company generates less than €32,900 in revenue from the provision of services or less than €82,900 from commercial activities.

Employee benefits

If the sole proprietor pays himself a salary, certain social security contributions will apply. On average, social security and employer contributions account for 73% of the net pay received.

Total payroll taxes include family allowances, health and maternity insurance,disability and death insurance, old-age insurance, the CSG (General Social Contribution), and the CRDS (Social Debt Contribution or Repayment).

Please also note that if the sole partner does not pay themselves a salary, only the minimum social security contributions need to be taken into account.

Operating expenses

These types of expenses correspond to the costs incurred by the business in the course of its operations. These expenses include rent and maintenance of business premises, the purchase of raw materials and supplies, employee compensation, insurance and subcontracting costs, energy consumption, and transportation.

Key Features of the EURL

The EURL has a few distinctive features, including the fact that it affords the manager the same benefits as a SARL. While its overall structure is similar, it differs in terms of decision-making. In fact, with an EURL, general meetings are replaced by decisions made solely by the sole member.

If the EURL plans to admit a new partner, it will be necessary to convert to anSARL. This conversion will be carried out through the transfer of shares in the EURL, and thus through a capital increase.

As for the capital stock, the entity must specify in its articles of incorporation an amount determined by the partner based on the business’s growth. The contribution must be made in cash, in kind, or through a business contribution.

Conclusion

An EURL offers several advantages, such as the ability to start a business on your own without needing a partner. Its ease of formation and low financial risk make the EURL a very attractive legal structure to consider.

However, these advantages come with certain drawbacks, such as being subject to the often-criticized self-employed social security system (RSI). The arrival of a new partner will require the company to convert to a limited liability company (SARL), which entails a host of administrative procedures.