In 2016, 554,000 businesses were created in France. Many are hesitating between a Société par Actions Simplifiée Unipersonnelle(SASU) or an Entreprise Individuelle à Responsabilité Limitée (EIRL).
Here's all the information you need to make your decision
The SASU is a Société par Actions Simplifiée (SAS) with a single shareholder. The manager is treated as an employee, and creating an SASU is tantamount to setting up a fully-fledged company. It has its own legal entity.
The liability of the company director is limited to the amount of his or her capital contributions. Creating an SASU requires the drafting of articles of association and the payment of cash contributions into a blocked account. In addition, the conditions for carrying on business are stricter and require more administrative formalities.
It is not possible to benefit from theauto-entrepreneur scheme regime. You can opt to be taxed under theIR orIS regime. You will not be able to opt for IR taxation for more than 5 years. The company director contributes to the general social security scheme.
SASU is a particularly suitable legal form if your business is set to undergo major upheaval in the coming years.
For example, major investments may require a change in company form. In addition, this status will enable you to continue to benefit from unemployment benefits (if you are not paid) and from the social security coverage offered by the general scheme.
The EIRL is a sole proprietorship with no share capital, no articles of association and no authorization to include another partner. Theentrepreneur is considered to be a sole trader, and no legal entity specific to your business is created.
The entrepreneur's assets and those of the company are not confused. The entrepreneur's liability is limited to the assets assigned to the business.
Creating an EIRL involves fewer administrative formalities
You can opt to be taxed on income or corporation tax. In the first case, profits are taxed according to the income tax scale. It is also possible to switch to the auto-entrepreneur system, within the limits of the sales authorized for this status.
The head of an EIRL is considered a self-employed worker, and contributes to the corresponding social security scheme. Recent reforms announced by the government aim to completely abolish the RSI by 2020. All self-employed workers will contribute to the general social security scheme, like salaried employees.
The EIRL is a more advantageous legal status if your business is likely to present few changes
In concrete terms, it is preferable to opt for an EIRL with corporation tax if you do not plan to include new partners or undergo major structural changes in the next few years (investments, opening up of capital, etc.).
The main advantage of the EIRL is the simplicity of the administrative and legal procedures governing its activity.
They enjoy strong popularity among the population, as do sole proprietorships, the number of which is up by 10%.
More than half the companies created in 2016 were Sociétés par Actions Simplifiée.
Written by our expert Paul LASBARRERES-CANDAU
January 11, 2018
