Today, many entrepreneurs choose to set up shop from home.
This domiciliation, whether for a sole proprietorship or a limited liability company, can either be chosen while waiting to move into an office or premises, or on a permanent basis. Even if domiciling your business in your own home doesn't necessarily mean doing business in your own home, it's worth taking a look at the necessary conditions, as well as the advantages and disadvantages of this choice of business domicile.
DEFINITION
A company domiciles when it declares a postal address to which mail intended for the company will be sent. This address is therefore that of the registered office and corresponds to the company's communication address.
Clearly, domiciling at home means that you have defined your personal address as your company's registered office.
In practice, any entrepreneur can domicile his company at his personal address, provided he is the manager or chairman. This means that the registered office cannot be domiciled at the home of one of the partners if he or she is not the manager.
It's worth pointing out, however, that the company manager doesn't need to be a property owner to set up this domiciliation.
The maximum duration for domiciliation is five years.
It should also be noted that if the company's manager is a tenant, he must send his landlord a registered letter with acknowledgement of receipt informing him of the new address.
Home domiciliation is possible as long as there are no contractual stipulations to the contrary in the lease or co-ownership regulations.
In towns with fewer than 200,000 inhabitants and in urban free zones (ZFU), business founders can domicile their company in their own home, provided there are no contractual or legislative provisions to the contrary. If they do not have an establishment, and therefore conduct their business exclusively outside their home, they can declare their personal address as the company's address, even if there is a clause prohibiting domiciliation at home.
In towns with more than 200,000 inhabitants, in the Hauts-de-Seine, Seine-Saint-Denis and Val-de-Marne departments, it is also possible to run a business from the company director's main residence, but there are more restrictions.
There are 2 possible scenarios:
- If the activity is carried out on the first floor, it must not cause any nuisance, danger or disturbance to the building.
- If the activity is carried out upstairs, it may not involve receiving customers or merchandise.
Seen as a simple, practical solution, domiciliation allows you to receive your business mail directly at home, and simplify procedures by having just one address.
It also gives you the freedom to manage your day and your work.
But be careful to find the right balance between your professional and personal life.
On the other hand, you can have your company cover the costs incurred by your professional activity at home. In fact, rental charges (water, EDF-GDF, telephone subscription, etc.) can be reimbursed by your company for the portion related to your activity.
First of all, there's the question of commercial credibility, which may be less important depending on the address. Indeed, a prestigious address is a strategic asset for the company's development, as well as its reputation with customers and investors.
What's more, depending on the manager's situation, you may have to change address every 5 years, which can slow down your company's development. Similarly, not being able to welcome customers or partners can slow your growth.
You should also be aware that domiciliation at your own home does not exempt you from the Cotisation Foncière des Entreprises (CFE), the amount of which depends on the commune in which you are domiciled. If your home is located in a commune with a high CFE, commercial domiciliation can enable you to obtain a head office address in a more attractive commune in terms of CFE.
While we've already talked about managing the weight of your professional activity, it's worth pointing out that being domiciled at home means a significant permeability between your professional and personal life. It's all about getting organized.
Finally, it's worth noting that your address is listed on all your legal documents, so it can be accessed by anyone.
Sometimes an entrepreneur may not have the means to finance the lease or purchase of commercial premises, or may not need to have such premises at all.
We can then evoke the commercial domiciliation as an alternative of choice
This solution frees the entrepreneur from the need for commercial premises, while still benefiting from a prestigious address.
Another point of interest, commercial domiciliation allows the manager to avoid exposing his or her home address by providing a business address located in a business center.
In short, domiciling your company in your own home is an option that can be considered for companies in the creation phase, very small businesses and start-ups. However, this solution has its limits. Indeed, your lease may not allow you to make this domiciliation possible. You should also bear in mind that a home address can be seen as a loss of credibility for your business in the eyes of your customers, suppliers and investors. A prestigious address will be more likely to comfort and convince your customers, and you'll be able to welcome them in a professional setting in a business center with meeting rooms.
Written by our expert Antoine Dubois
June 22, 2017
