The EURL has the same characteristics as a SARL, the only difference being that there is a single shareholder. This partner may or may not be the company manager.
TheEURL is a flexible legal status that adapts to the projects of many entrepreneurs. However, it can easily be transformed into a SARL to form a partnership with one or more people.
In a EURL, the share capital is freely defined by the sole shareholder, and his liability is limited to the amount of his contributions to the company.
Thus, in the event of financial difficulties, the sole shareholder's personal assets are protected, except in the event of recognized mismanagement. An EURL may be taxed under the IR or IS regime, depending on your choice.
Lastly, its reporting obligations are particularly streamlined, and its operations are governed by the rules set out in the articles of association. Since the Sapin Act, EURLs whose sole managing partner is an individual can opt for the micro-BIC regime.
In 2018, 15% of new businesses in France were EURLs.
Here are the accounting requirements for EURLs in 2019
Like all companies, you need to keep detailed accounts of your business.
It includes the following items:
- Recording of all movements affecting the company's assets, in chronological order
-
The annual inventory to check the existence and value of the assets and liabilities that make up the company's assets and liabilities
-
Year-end financial statements
Since December 2016, microentrepreneur status can also apply to the sole managing partner of an EURL. Finally, if you are covered by the actual tax regime, you must keep cash accounts.
2 accounting books must be kept up to date:
-
The journal book, which lists all accounting operations (cash receipts and disbursements) in chronological order, regardless of journal. This enables you to keep track of the transactions carried out each day. It centralizes the transactions recorded in the subsidiary journals on a monthly basis.
-
The account ledger, which contains exactly the same entries as the journal, but classified according to the account specific to each operation. It shows the amounts allocated to each expense item. Accounts are fed from the daybook or subsidiary accounts.
These two books of account must be kept by many companies - in fact, they are the ABCs of bookkeeping.
No special accounting skills are required. Numerous software packages now enable all entrepreneurs to easily include invoices in their management system.
Since January 1, 2016, it is no longer mandatory to have an inventory book in EURL.
Computerized written documents can take the place of daybooks and ledgers. In this case, they no longer need to be numbered, but simply identified and dated as soon as they are drawn up.
The EURL manager is required to publish the company's annual financial statements at the end of each financial year, and file them with the clerk of the relevant commercial court (depending on the address of the company's registered office).
Annual financial statements include :
-
Balance sheet. It gives a financial picture of the company at a given date. Shareholders' equity measures the net worth of the company's assets. The balance sheet is divided into two parts: on the left, assets represent the company's assets; on the right, liabilities represent the company's liabilities. The year-end balance sheet shows the company's profit or loss as a result of the imbalance between assets and liabilities.
-
The income statement. For a given period (usually the financial year), it describes the company's activity. It shows all costs incurred, known as "expenses", and all revenues, known as "income".
-
Appendices. The purpose of this document is to provide information to help understand the balance sheet and income statement. Companies meeting at least two of the following three criteria are exempt from providing appendices: balance sheet total does not exceed €350,000; sales excluding tax do not exceed €700,000; the company has no more than 10 employees.
It's not compulsory to have a chartered accountant for an EURL, but many entrepreneurs want to call on one to certify their accounts.
It's a way of hedging against possible future reproaches, and guaranteeing compliance with the law.
Unless you have a solid accounting background, we recommend that you use the services of a chartered accountant.
The accounting requirements for EURLs are not complex, but you need tobe well-informed to apply them in the best conditions, and without running the risk of breaking the law.
Written by our expert Paul LASBARERES-CANDAU
June 5, 2019
