SASU or micro-business: which legal status to choose?

SASU or micro-enterprise: key features

SASU: distinguishing between manager and company

SASU (Société par actions simplifiée unipersonnelle) is the ideal vehicle for all the projects of entrepreneurs wishing to go it alone. When a SASU is created, a new legal entity emerges. A certain amount of formalism is therefore required.

The SASU and its manager are taxed separately:

• A SASU is taxed on the basis of its profit or loss.
• Executives are taxed on the basis of their remuneration.

To determine the company's tax liability, accurate and complete accounting records must be kept in compliance with tax authorities' requirements. Directors' social security contributions are proportional to their salary. If the executive receives no remuneration, no social security contributions are deducted.

Micro-entreprise: a simplified status

The micro-entrepreneur scheme, formerly known as auto-entreprise, is ideal for people wishing to try out a new business or run a complementary one. The auto-entrepreneur is subject to certain sales thresholds:

• 188,700 euros for sales of goods or foodstuffs (for consumption on the premises or to take away) or accommodation services.
• 77,700 euros for services and self-employed professionals.

When calculating profits, URSSAF does not take into account the auto-entrepreneur's actual expenses. A simplified micro-tax system is available. Profits are subject to income tax, with the option of paying tax in full discharge of income tax. Social security contributions are calculated on the basis of theauto-entrepreneur 's activity, and paid with the monthly or quarterly sales declaration.

SASU and micro-business: different legal statuses

Special features of the SASU legal status

Thesole shareholder and the SASU are two distinct legal entities. Setting up a SASU involves a fee for completing the formalities. When it is set up, the company must draw up its articles of association and file them with the Commercial Court of the département in which it is located. SASU bylaws are essential, as they determine the company's operating rules.

The sole shareholder's liability is limited to his or her contribution to the company's share capital . His liability is therefore limited in the event of bankruptcy, except in the case of mismanagement.

The particularities of the micro-enterprise legal status

A micro-entrepreneurworks as a sole proprietorship. The two entities form the same legal personality. As a result, the formalities involved in setting up a micro-enterprise are much simpler than for a SASU.

The auto-entrepreneur's liability is limited to his or her professional assets, i.e. the assets used in the course of his or her professional activity. The auto-entrepreneur's personal and professional assets are therefore divided.

Micro-entrepreneur: limits on professional activities

Micro-entrepreneurs are not free to pursue all the activities they wish. In fact, certain professional activities are not compatible with auto-entrepreneur status.

Incompatibilities with the micro-tax regime for micro-businesses :

• Activities covered by agricultural profits ;
• Activities subject to real estate VAT: real estate agents, property dealers, etc.

Incompatibilities with the micro-enterprise micro-social scheme :

• Artistic activities remunerated by royalties from the Maison des Artistes or Agessa.
• Liberal professions covered by a pension fund other than Cipay: general insurance agents, chartered accountants, healthcare professionals, legal professionals, etc.
• Farming activities covered by the MSA (Mutuelle sociale agricole) social security scheme.

How to declare the start of your SASU and micro-business activities?

The formalities involved in setting up a SASU are fairly onerous, as they involve the creation of a new legal entity. It is therefore essential to follow a precise process:

1. Choose a company name.

2. Draft the articles of association.

3. Appoint the Chairman.

4. Draw up a statement of acts performed by the sole shareholder.

5. Deposit share capital funds in a blocked account.

6. Register the articles of association with the authorities.

7. Publish a notice of incorporation in a legal gazette.

8. Apply for registration with the Registre National des Entreprises (RNE).

A lawyer or chartered accountant can help you set up your SASU. You can also turn to a notary. Once these steps have been completed, the entrepreneur receives a Siren number from Insee.

The formalities for setting up a micro-enterprise are simplified. All the auto-entrepreneur has to do is register on the Guichet unique website and create an account on the URSSAF website. Micro-entrepreneur status entitles the holder to a Siren number, issued by Insee.

The advantages and disadvantages of the two types of status

The main advantages and disadvantages of SASU

The main advantages of SASU are :

• The manager of a SASU can deduct certain expenses from the company's taxable profits.
• It is possible to reclaim VAT paid on purchases of goods and services.
• Social security contributions are calculated on the basis of the executive's remuneration.
• Directors' liability is limited to their contribution to the share capital.

The main disadvantages of SASU are :

• Cumbersome creation formalities.
• The obligation to keep full accounts, with the production of an income statement and annual balance sheet.

The main advantages and disadvantages of micro-enterprises

The main advantages of micro-enterprise are :

• Simplified accounting thanks to the simple requirement to keep a receipts and purchases book.
• A VAT exemption based on certain sales thresholds.
• A simplified micro-tax and micro-social regime.

The main disadvantages of micro-enterprises are :

• In the case of VAT exemption, the micro-enterprise is not able to reclaim VAT on its purchases.
• The costs and expenses of the auto-entreprise are not taken into account when calculating social security contributions and income tax.
• The micro-tax system is based on sales rather than profits for micro-entrepreneurs.

The micro-entrepreneur (ex-auto-entrepreneur) and SASU management statuses offer different advantages for launching your new professional activity. With SASU, the formalities involve a full investment. If you want to try out a new activity or exercise a complementary profession, you may decide to register as an auto-entrepreneur.