When starting a business, all entrepreneurs ask themselves the same question: what legal structure should they choose? Given the wide variety of legal structures available in France, it’s not always easy to navigate the options and make the right choice.
In this article, we’ll compare two business structures that are particularly popular among self-employed individuals: the SASU and the micro-enterprise. We’ll cover their characteristics, key differences, tax and social security implications, as well as the revenue thresholds applicable in 2026, to help you make an informed decision.
SASU or micro-enterprise: key features
Characteristics of the SASU: Distinguishing Between the Manager and the Company
An SASU (Simplified Single-Member Stock Company) is a company with a single shareholder. This shareholder may serve as the company’s president, but this is not a requirement: the presidency may be entrusted to a third party, whether an individual or a legal entity.
An SASU is a legal entity separate from its manager. In principle, its liability is limited to the amount of the capital contributions, except in cases of mismanagement.
This legal structure offers a high degree of organizational flexibility, provided that the structure is clearly defined in the articles of incorporation. Therefore, particular care must be taken when drafting them. It is also recommended to seek professional assistance to ensure the company is established properly.
The formalities involved in setting up and managing an SASU are more cumbersome than those for a micro-enterprise, which explains why the SASU is generally preferred for structured projects or those with strong growth potential.
On the other hand, business address is the same for both types of companies: it is mandatory.
Taxation of SASUs
By default, an SASU is subject to corporate income tax (IS).
The option to pay income tax (IT) is available, subject to certain conditions, including:
- engage in a commercial, craft, professional, or agricultural activity;
- less than 50 employees ;
- have annual revenue or total assets of less than 10 million euros;
- opt for the IR within five years of incorporation.
The SASU and its manager are taxed separately:
- the company is taxed on its net income (profit or loss);
- The executive is taxed on his or her compensation.
Social security contributions for the president of an SASU are calculated solely on the basis of the compensation paid. If no salary is paid, no social security contributions are due.
Micro-entreprise: a simplified status
The micro-enterprise scheme, formerly known as the "auto-entreprise" scheme, appeals to many self-employed individuals who want to test out a business idea or pursue a side business.
Self-employed individuals are subject to revenue caps, set at:
- €188,700 for the sale of goods or the provision of lodging;
- €77,700 for service providers and independent professionals.
The micro-diet is based on a simple principle:
- actual expenses are not deductible;
- a flat-rate deduction is applied to determine taxable income;
- Social security contributions are calculated directly based on reported revenue .
Micro-entrepreneurs are subject to income tax and may opt for a flat-rate payment, subject to certain income requirements.
This legal structure is valued for its administrative simplicity and virtually zero setup costs. It does not require the filing of annual financial statements, the holding of general meetings, or the use of a certified public accountant.
On the other hand, micro-enterprises are exempt from VAT as long as certain thresholds are not exceeded, which means they cannot claim a VAT refund on business purchases.
The main differences between an SASU and a micro-enterprise
To better understand the considerations involved in choosing between an SASU and a micro-enterprise, here are the key differences to keep in mind:
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SASU
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Microenterprise
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Liability
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limited liability to the amount of capital contributed (except in cases of mismanagement)
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micro-enterprise: liability limited to business assets, with personal assets protected
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Social status
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President of an SASU: treated as an employee, enrolled in the general Social Security system
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micro-entrepreneur: a self-employed worker covered by the Social Security system for the self-employed (SSI)
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Employee benefits
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calculated solely on the basis of the compensation paid
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calculated based on cash receipts
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Costs and Management
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Higher setup costs, mandatory full accounting, potential VAT refund
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extremely simple management, no complex bookkeeping, VAT-exempt
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Credibility
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An SASU generally inspires greater confidence among financial partners, investors, and institutional clients
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limited, unless the company's registered office is located at a prestigious address
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Revenue thresholds for micro-businesses
Compliance with revenue limits is a major requirement of the micro-entrepreneur scheme. If these limits are exceeded on a sustained basis, the entrepreneur is removed from the micro-tax and micro-social security schemes and transitions to a regular tax regime.
These thresholds can therefore act as a barrier to growth, prompting many self-employed individuals to consider transitioning to an SASU, particularly when they wish to formalize their business structure or optimize their tax situation.
SASU and Micro-Enterprises: Different Legal Structures
Legal Characteristics of the SASU
An SASU is a fully-fledged corporation. Its formation involves:
- drafting and filing the articles of incorporation;
- the publication of a legal notice;
- registration through the One-Stop Shop.
The sole member's liability is limited to his or her capital contributions, unless otherwise provided.
Good to know: For entrepreneurs who want a separate business address, a business address service can be a flexible and prestigious solution for their headquarters.
Legal Characteristics of a Microenterprise
A micro-enterprise is a sole proprietorship. There is no distinction between the business owner and the business, even though business and personal assets are now legally separate.
The startup process is quick and easy, and can be completed directly through the One-Stop Business Portal.
Activities that are incompatible with a microbusiness
Certain activities cannot be carried out under the micro-enterprise regime, including:
- agricultural activities covered by the MSA;
- real estate activities subject to real estate VAT;
- certain regulated professions (healthcare, law, accounting, etc.).
Formation of a SASU
Setting up an SASU involves several formal steps:
- Choosing a business name and a registered office
- Drafting by-laws
- Appointment of the President
- Filing of share capital
- Publication of a legal notice
- Registration with the National Business Registry (RNE) through the one-stop shop
Professional guidance is strongly recommended.
Starting a microbusiness
The process of starting a microbusiness has been simplified: you can register online through the One-Stop Shop for Businesses, after which you are automatically enrolled with URSSAF.
Advantages and Limitations of the SASU
Advantages:
- Deduction of certain business expenses
- VAT Refund
- Social security contributions based solely on compensation
- Enhanced credibility
Disadvantages:
- Formality in creation and management
- Full accounting required
Advantages and Limitations of a Micro-Business
Advantages:
- Quick and inexpensive creation
- Simplified administrative management
- Accessible tax and social security system
Disadvantages:
- Revenue caps
- Inability to deduct actual expenses
- No VAT refund for duty-free purchases
Comparison Chart: SASU vs. Micro-Enterprise
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Criteria
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SASU
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Micro-business
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Legal personality
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Legal entity
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Sole proprietorship
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Liability
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Limited to contributions
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Limited to professional assets
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Taxation
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IS (or IR under certain conditions)
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IR (payment in full may be accepted)
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Employee benefits
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Regarding compensation
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Regarding revenue
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VAT
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Recoverable VAT
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VAT exemption
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Accounting
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Complete
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Simplified
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Revenue caps
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None
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Yes
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Credibility
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High
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More limited
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Conclusion: SASU or micro-enterprise?
There is no one-size-fits-all answer to the question of whether to choose an SASU or a micro-enterprise: the right choice depends on your business, your growth goals, your revenue level, and your need for social security coverage.
A micro-enterprise is ideal for starting or testing a business, while an SASU is better suited for entrepreneurs who want to structure and develop their business over the long term.
Written by our expert Evan
July 31, 2024
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