When setting up a business, all entrepreneurs ask themselves the same question: which status to choose?
While the range of legal forms on offer in France is quite diverse, making the right choice is not always easy.
In this article, we'll be looking at two types of status regularly adopted by the self-employed: SASU and micro-entreprise.
We take a look at their characteristics and main differences, as well as the sales thresholds for auto-entrepreneurs!
The SASU (Société Anonyme par Actions Simplifiée) is a legal form with a single shareholder.
The latter is not obliged to also assume the responsibility of Chairman, as this role can be filled by a third party. The powers of legal representative are delegated to the individual or legal entity managing the company, whose liability is limited to the amount of the contributions.
This legal form allows great flexibility in its organization, which must be formalized in the articles of association beforehand.
These articles of association need to be drawn up with the utmost care, and you can call on a professional to help you achieve greater peace of mind.
The formalities, which are very similar to those for SAS, can be onerous in terms of creation and management.
This is why the SASU is generally recommended for entrepreneurs with high-growth projects.
For tax purposes, the sole shareholder chooses the tax regime he or she wishes to apply.
Two solutions are available:
- income tax (IR)
- corporate income tax (IS)
This second choice is the default, so don't forget to make a declaration if you prefer the first choice. Note that the IR option is only available if you have fewer than 50 employees and sales of less than 10 million euros.
The auto-entrepreneur (micro-entrepreneur) status is generally adopted by a large proportion of self-employed workers. If this legal form had only one word to remember, it would be simplicity.
This simplicity, coupled with its very low cost, naturally attracts a majority of French people. But behind this seductive advantage lie other characteristics that it's worth highlighting to demonstrate that this status is not necessarily suitable for all self-employed people.
In addition to the simplicity of setting up your own business, keeping your accounts is just as straightforward, and invoices issued are exempt from VAT. Forget about filing company accounts, holding general meetings or hiring an accountant - you're totally exempt!
But the problem lies in the sales figure. While it's very easy to declare, it must never exceed a certain threshold. This constraint can quickly become an obstacle to the development of your business, but we'll come back to this later.
This system is essentially suited to people who want to devote themselves to a particular activity without taking great financial risks, or to those whose aim is to complement their main activity.
To clarify the differences between SASU and micro-entrepreneur status, here is a detailed list.
-
Managerial liability: Limited to his or her capital contributions for the SASU, whereas this is unlimited for the auto-entrepreneur.
-
Social status: The president of an SASU is assimilated to the general social security system, and not to the RSI, unlike the auto-entrepreneur, who is subject to limited social security coverage. Unlike auto-entrepreneurs, SASU directors cannot contribute to unemployment insurance, but can receive ARE benefits in the absence of remuneration.
-
Social security charges: auto-entrepreneurs pay their social security charges monthly or quarterly, based on their sales. On the other hand, a SASU (simplified joint stock company) must pay its social security contributions quarterly, based on salaries paid. If the SASU manager decides not to generate any income, he or she will be exempt from all charges.
-
Set-up and management costs: It's undeniable that setting up a SASU will cost much more than a micro-enterprise, and you don't have the option of hiring an accountant. Business expenses can nevertheless be paid by the company, and VAT invoiced can be reclaimed, depending on certain criteria. For the auto-entrepreneur, it's simple: no accountant, no VAT and zero set-up costs.
-
Credibility : Let's face it, partners, suppliers and investors will be far more reassured dealing with a SASU than with an auto-entrepreneur.
As mentioned above, auto-entrepreneurs are obliged to respect a certain sales threshold. This characteristic can quickly put the brakes on the growing development of a business.
Here are the different ceilings you need to take into account:
-
33,200 euros for the provision of services and self-employed activities classified as BNC or BIC
-
82,800 euros for commercial activities
If this ceiling is exceeded, the auto-entrepreneur can no longer benefit from the advantageous micro-tax and micro-social regime, and is switched to the classic sole proprietorship regime.
But that's all about to change! Edouard Philippe's government plans to double this threshold from 2018. This will allow auto-entrepreneurs to cap their sales at 70,000 euros for services and 170,000 euros for commercial activities. A measure welcomed with open arms by the main parties concerned, which could provide a welcome boost to employment by avoiding the need to put the brakes on business development.
So, SASU or micro-entreprise?
Instead of giving you a definitive answer, which would be pointless without knowing the details of your business, we advise you to weigh up the pros and cons of each status. Both have their own characteristics, offering both advantages and disadvantages. The prospect of doubling the sales ceiling for auto-entrepreneurs could well weigh heavily in the balance of your choice.
Written by our expert Maeva Girardot
October 17, 2017
