Are you in the process of setting up a one-person company, but still hesitating as to which legal form is best suited to your needs? We've got the answer here!
Single-member companies refer to corporate legal forms such as SARL for EURL and SAS for SASU, the only difference being that they have onlyone shareholder.
To set up a one-person company, you can choose between an EURL or Entreprise Unipersonnelle à Responsabilité Limitée, and a SASU or Société par Actions Simplifiées Unipersonnelle.
It should be noted that these two legal forms have significant differences that need to be taken into account in the light of your project's needs.
Focus today on these differences to help you make the right choice!
The relationship with social security is very different for SASU and EURL companies:
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In a SASU, whether or not the chairman is a partner in the company, he or she is automatically affiliated to the social security system. As a result, he or she enjoysthe same social security protection as employees, and makes the same pension contributions. It should be noted, however, that the social security contributions payable by the chairman of a SASU remain higher than those payable by a manager affiliated to the self-employed workers' scheme.
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In a EURLIt is important to distinguish between two cases:
- In the first instance, if the EURL's manager is also its sole partner , he or she will be affiliated to the social security scheme for self-employed workers.
- In the other case, if the EURL manager is not a partner , he or she will be affiliated to the general social security scheme.
Once again, there are significant differences between the SASU and EURL legal forms when it comes to taxing profits:
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In principle, a SASU is subject to corporate income tax. However, partners can opt to be taxed as partnerships for a single period of 5 financial years. It should also be noted that the micro-business regime is in no way compatible with SASUs.
- Unlike the SASU, the EURL is a partnership. It is possible to opt for taxation of profits under the IS regime. Finally, an EURL governed by the partnership regime may at any time decide to have its activity governed by the micro-enterprise regime, provided that sales correspond to the limits set by such a regime, and if and only if the EURL's manager is a sole partner and a natural person.
Finally, the differences in the way these structures are set up are minor.
As a result, the process involved in setting up an EURL and a SASU is similar, and comprises 7 steps:
- drafting bylaws
- Payment of both cash and in-kind contributions
- Signing the articles of association
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Appointment of future directors of the one-person company
- Publication in a JAL of a notice of incorporation
- A declaration concerning the establishment ofcorporate status
Send an application for registration to the CFE.
Nevertheless, there are a number of differences that should be mentioned:
- As a result, the "compulsory information" will be very different whether the company is a EURL or a SASU.
- Also, if a EURL is set up by a single individual partner, a TNS form must be drawn up to accompany the incorporation of the legal entity.
In conclusion, the choice of a particular legal form for a sole proprietorship is left to the sole proprietor.
To make the right choice, it's important to keep in mind the project you want to develop over the long term.
Written by our expert Quentin Moyon
June 8, 2018
