Today, more and more workers are looking to break away from the traditional corporate world by declaring themselves freelancers.
Being your own boss is a business model that appeals to the vast majority of French people. But once you've made the decision, it's often difficult to find your way around all the different statutes in force.
Company, sole proprietorship or freelance administration?
As many choices as questions on the subject.
SeDomicilier helps you choose the right solution to start your freelance business with peace of mind!
Freelancers are self-employed people who offer their services to companies or individuals. This type of self-employment encompasses many different professions: craftsmen, shopkeepers, farmers, freelancers and service providers. This last category of jobs is the one most concerned by the term freelance, i.e. self-employed workers carrying out an activity that doesn't belong to a regulated profession, and doesn't require a business.
Being a freelancer means being your own boss, which implies assiduous prospecting for new customers.
This means that you can work from home, in an office or directly on your customer's premises.
But freelance does not mean social status. To establish yourself as a freelancer, you need to choose a social status, i.e. a clearly defined framework for exercising your profession legally.
These two legal terms each have their own definition. Simply put, status refers to a company's legal form.
As a self-employed worker, you can choose between a sole proprietorship or a company.
The term "system" refers to the company's social and tax system, including taxation and social security coverage. The company's status will then define the system that will be put in place. From a social and tax point of view, the self-employed can be assimilated to salaried employees, benefiting from the general salaried employee scheme. But they may also be assimilated to the self-employed scheme (RSI).
Choosing the right status is essential, as it will have repercussions not only on your company's tax and social security regime, but also on your responsibilities as manager and your accounting obligations.
There are many different legal forms available to the self-employed.
To make the best decision, you'll need to study this wide range of products and determine which status is best suited to your business.
To do this, start by estimating your annual sales, how you want them to develop, and how you want to be remunerated.
You also need to take into account all the factors relating to the very nature of your business, such as your ambitions, the means you have at your disposal, or whether you're an adventurer who's not afraid of risk.
And don't hesitate to ask for help from other freelancers and/or a chartered accountant. They'll be able to help you make the right decisions.
As mentioned above, two types of status are available to self-employed workers: sole proprietorship and company.
Sole proprietorship (EI)
If you opt for a sole proprietorship, there are a number of advantages that will appeal to you.
First of all, setting up your own business is extremely simple, fast and inexpensive- a godsend for anyone with a phobia for red tape. As a sole trader, you'll enjoy greater freedom than a company director. And when you want to cease trading, the formalities will be just as simple and inexpensive as those involved in setting up a business.
Nevertheless, by opting for this solution, you are choosing to take on a great deal of responsibility for your personal assets and debts, which could be at risk in the event of payment difficulties. You also have no choice but to join the self-employed workers' scheme (RSI), often decried by those concerned. From a tax point of view, you can opt for the micro-enterprise or auto-entreprise scheme. But the main drawback of this status is the sales ceiling (which varies according to the profession), which must not be exceeded, or you lose the advantage of the tax system. It's also worth noting that it's not possible to pay yourself dividends.
The company
For self-employed people wishing to set up a company, there are two choices: EURL or SASU.
The EURL (Entreprise Unipersonnelle à Responsabilité Limitée) is a form of SARL, but with a single partner. The SASU (Société par Actions Simplifiée Unipersonnelle) is more akin to the SAS, but with a single partner.
THE EURL
The EURL, often favored by freelancers for its administrative flexibility, offers first and foremost limited liability on the part of the manager. This means that in the event of payment problems on your debts, your personal assets will not be involved.
Also, if your business develops positively, you can easily convert to a SARL and recruit partners.
However, the disadvantage of the EURL is that it is difficult and costly to set up. In addition, you'll be required to comply with a large number of strict formalities and regulations.
For example, it will be important to draft minutes properly, to work with a qualified chartered accountant, and to keep careful records.
For tax purposes, please note that your dividends will be subject to social security contributions. And just like a sole proprietorship, you will be affiliated to the RSI, and conversely, ceasing your activity will entail onerous and costly formalities.
SASU
The SASU has a number of similarities with the EURL. Firstly, the limited liability and formalities for setting up a company are the same, as are the consequences for administration and termination costs. On the other hand, your dividends will not be subject to social security contributions, and you will be affiliated to the general employee scheme, which is a big plus to consider.
Lastly, the profits generated will be taxed at the corporate level (impôt sur les sociétés), but it is possible to opt, for a maximum of 5 years, for direct taxation in your own name (IR).
The ultimate solution is that of "portage salarial", whose aim is tounite the "portage" company, the employee and the client. Without taking any risks, many of its advantages are not insignificant. The worker enjoys the freedom of a self-employed entrepreneur, while benefiting from a fixed-term or open-ended contract, and the social protection that goes with it. The administrative burden is also less onerous, and business expenses can even be reduced.
But the two absolute advantages are the fact that your sales are limited to no threshold, and the assistance of the "portage" company in your search for assignments.
But not everything is rosy! The worker's salary is deducted from employer contributions and commission by the freelance administration company. On average, once these deductions have been made, your income corresponds to half the invoiced amount. Finally, if you wish to cease your activity, your company cannot be valued for a possible sale.
Make sure you think carefully about the status you should adopt for your freelance activity.
When you talk about status, you inevitably talk about social and tax regimes! It's important not to neglect this aspect.
Ask yourself the right questions about your business today, and especially tomorrow.
And even if you're just starting out, remember that the evolution of your company can quickly weigh heavily in the final balance. Sole proprietorship or company?
We can't answer for you, but there's no doubt that all this information will point you in the right direction.
