SASU or auto-entrepreneur: which status to choose?

SASU or micro-entreprise: which status is more advantageous?

Advantages of auto-entreprise

Over the past few years, the micro-enterprise status has been a resounding success with business creators. In 2023, nearly 667,446 micro-enterprises were created, according to INSEE. Discover the advantages of this system:

• Simplified, rapid set-up formalities: no need to draw up articles of association, no share capital, no publication in the legal gazette;

• Low social security contributions, proportional to sales;

• Accounting obligations reduced to keeping a receipts book and a purchase register;

• Tax advantages:

  • a flat-rate deduction on pre-tax sales,

  • a withholding tax option, allowing you to pay both income tax and social security contributions throughout the year;

  • basic VAT exemption, which means you don't have to declare and pay VAT.

Advantages of SASU

SASU is also very popular with entrepreneurs. It offers great flexibility in the way it operates. Here are the main advantages of this single-member company:

• Great flexibility in drafting the articles of association: the sole shareholder is free to determine the organization and operation of his company;

• No sales ceiling, which is ideal for expanding your business;

• Better social security cover for managers;

• Liability limited to share capital;

• The ability to hire employees.

Auto-entrepreneur or SASU: what are the main features?

Characteristics of SASU

The SASU is a société par actions simplifiée unipersonnelle. It is the single-member form of the SAS, which means that it has a single shareholder, who may be an individual or a legal entity.

The SASU differs from the micro-enterprise for several reasons. It is a company (legal entity), with its own legal personality and assets, distinct from those of the sole shareholder. It has share capital, even if the law imposes no minimum amount (a symbolic €1), and is headed by a Chairman.

Characteristics of auto-entreprise

Unlike the SASU, the micro-enterprise is not a company. It is not, therefore, a legal entity, and merges with the individual entrepreneur who created it.

By definition, the micro-enterprise is a unique, simplified system available to individual entrepreneurs. It benefits from tax and social security advantages, and its creation formalities are simplified.

To qualify for the micro-enterprise scheme, you must not exceed an annual sales ceiling of :

• 188,700 for activities involving the purchase or sale of goods;

• 77,700 for services and self-employed activities.

What are the differences between SASU and micro-entreprise?

A different way of working

A SASU (simplified joint stock company) must have articles of association to govern its operation and organization. As sole shareholder, you are the sole decision-maker, but every decision you take must be recorded in a register that has been listed and initialed.

On the other hand, if you're a self-employed entrepreneur, you don't have to draw up any articles of association, and you're free to organize your business as you see fit.

Different taxation

As an auto-entrepreneur, you are subject to income tax (IR). All you have to do is declare your sales on your annual tax return (N° 2042-C-PRO). There are a number of reasons why this is an advantageous tax regime for you.

Firstly, when you file your tax return, a flat-rate deduction is applied to your sales of :

• 71% for activities involving the purchase or sale of goods ;

• 50% for commercial and craft activities classified as BIC ;

• 34% for self-employed activities classified as BNC.

To simplify your tax return throughout the year, you can opt to pay income tax at source. This allows you to pay both your income tax and your social security contributions on a monthly or quarterly basis.

A percentage of tax is then added to the social security contribution rate, depending on the nature of your business:

• 1% for activities involving the purchase or sale of goods;

• 1.7% for BIC services and furnished rentals;

• 2.2% for self-employed activities classified as BNC.

In addition, auto-entrepreneur status allows you to benefit from basic VAT exemption, i.e. exemption from declaration and payment of VAT on services and sales. To qualify, sales for the previous year (N-1) must not exceed (for the years 2023, 2024 and 2025) :

• 91,900 for activities involving the purchase or sale of goods;

• 36,800 for services and liberal professions.

By contrast, SASU companies are by default subject to corporate income tax (IS), at a standard rate of 25%, regardless of sales level. A reduced rate of 15% applies, under certain conditions, to profits up to €42,500.

By way of exception, you can opt for income tax (IR) in SASU, for the first 5 years following its creation, if it meets the following 5 conditions:

• less than 5 years of service;

• the exercise of a commercial, craft, liberal or agricultural activity;

• sales of less than 10 million euros ;

• less than 50 employees ;

• not be listed on a stock exchange.

A different social security system

As an auto-entrepreneur, you are a non-salaried worker (TNS). You are affiliated to the social security system for the self-employed , and benefit from the micro-social regime. The amount of your social security contributions varies according to the nature of your business and your sales.

Depending on your activity, the contribution rate is :

• 12.3% for merchandise sales and purchases ;

• 21.2% for services (BIC) and self-employed activities covered by the Cipav ;

• 21.1% for services (BNC) and self-employed activities covered by the SSI ;

• 6% for rental of furnished tourist accommodation.

Conversely, as Chairman of a SASU, you are affiliated to the general social security scheme. As a result, you enjoy the same rights as an employee, with the exception of unemployment insurance rights.

Incompatibility with certain activities

Certain activities are incompatible with SASU or auto-entrepreneur status.

The activities excluded from the micro-enterprise scheme are :

• agricultural activities covered by the Mutualité Sociale Agricole (MSA);

• activities subject to real estate VAT ;

• unfurnished or professional property rental activities;

• artistic activities remunerated by royalties;

• regulated liberal professions: legal professions (lawyer, notary, court commissioner, etc.), medical professions (doctor, dental surgeon, private nurse, etc.), chartered accountants and statutory auditors.

The list of regulated professions is available on the Bpifrance website.

The SASU is incompatible with the following activities (non-exhaustive list):

• healthcare activities ;

• regulated liberal professions ;

• insurance and reinsurance activities ;

• tobacco shops.

What are the formalities for creating a SASU or becoming a micro-entrepreneur?

Setting up a micro-business

To become an auto-entrepreneur, all you need to do is declare the start of your activity, i.e. declare the existence of your business. How do I do this? Simply complete an online form on the Guichet unique website and submit the required supporting documents:

• copy of valid ID ;

• Proof of address less than 3 months old or proof of occupation of business address;

• a sworn statement of non-conviction and a certificate of parentage, if you are a merchant or craftsman.

Declaring an activity under the micro-enterprise scheme is free of charge.

Creating a SASU

Unlike a micro-enterprise, the formalities involved in setting up an SASU are longer and more costly. To set up a SASU, there are 4 main steps to follow:

1. Drafting bylaws, to define the company's organization;

2. Formation and deposit of share capital;

3. Publication of a legal announcement in a legal gazette ;

4. Creation of the registration application file on the Guichet unique website.

How do I switch from a micro-business to a SASU?

Micro-enterprise is the ideal way to start your business, but the sales thresholds are likely to hamper its development.

As a micro-entrepreneur, if you wish to expand your business, it is in your best interest to convert your auto-entreprise into a SASU. To switch from one legal form to the other, you need to :

• Take the necessary steps to create your SASU ;

• Transferring the business ;

• Declare the cessation of your self-employed activity.

Choosing between SASU and auto-entreprise depends essentially on the scope of your project. To help you make the right choice, we recommend that you ask yourself a few questions:

• What are your sales forecasts for the year?

• Would you like to expand your business quickly?

• Which social security scheme would you like to be covered by as a company director?

• Would you like to deduct expenses?