Setting up a business: reimbursement of business expenses

Starting your own business? Launching such a project entails costs, even before you start your business. Can you be reimbursed for such start-up costs? This is indeed a possibility. What costs are involved?

Expenses eligible for potential reimbursement are none other than "professional expenses" incurred prior to setting up a business. These refer to expenses incurred personally by the individual or legal entity behind the business start-up, for the purpose of creating a new company.

They can be advanced by the manager himself or by a partner in the course of formation, even before the opening of any bank account attached to the structure.

A few additional details are required concerning the nature of these expenses and the conditions for their reimbursement.

What expenses are reimbursable?

When launching a business, three types of expenses can be incurred and reimbursed

These three categories of expenditure are as follows:

• Business expenses known as "charges". These can include supplies or insurance.
• Business expenses of a "fixed asset" nature. These expenses relate to the purchase of technical, transport or IT equipment.
• Business expenses related to the company's new premises. These most often correspond to the cost of any work or deposits.

Such a list can be extended to include all expenses incurred in launching the company. However, these expenses must comply with a certain number of conditions.

What conditions must be met for these charges to be reimbursed?

Here again, three conditions must be met if you wish to be reimbursed for business expenses incurred prior to the launch of your company

These are :

• The necessary link between these activities and the launch of the company.
• A receipt was kept by the applicant, showing the identity of the company concerned.
• The expenditure date must not be more than a few months before the creation of the company. This can range from three to six months. It's also important to bear in mind that for a business run as a company, the start date is the date on which the articles of association are signed, whereas for a self-employed entrepreneur or a sole proprietorship, the start date is the date of registration with the Centre de Formalité des Entreprises (CFE).

Clearly, the costs involved in setting up the capital are not refundable under any circumstances.

How do I get my money back?

Two cases need to be developed: companies and micro-enterprises or sole proprietorships.

In the first instance, for activities carried out in the form of a company, it is necessary to include a specific clause concerning reimbursement when drafting the articles of association. A list of expenses incurred on behalf of the future structure should also be attached. From that point on, repayment can take place as soon as the bank has released the company's share capital.

Secondly, for sole proprietorships, no special steps are required.

All you need to do is keep all your supporting invoices.

In conclusion, if there's one thing you need to keep in mind to obtain reimbursement for "professional expenses" incurred prior to setting up your business, it's to keep all your invoices.

Even so, if you don't have invoices with your company's name on them, or if you've inadvertently mislaid them, you can always re-invoice these expenses to your company after you've started up. In this case, the VAT will not be reimbursed, which means a definite loss of money.

So remember to keep ALL your invoices!