What legal status for a construction company?

The SARL

Considered one of the most popular legal forms for construction companies, the SARL (limited liability company) offers you a choice of different VAT (value-added tax) regimes. These include basic VAT exemption and simplified VAT. The latter allows you to file an annual VAT return. You can also opt for the normal VAT regime if you wish to file monthly or quarterly returns.

What's more, setting up a construction business as a limited liability company is not complicated. You need at least one partner, who may be related to you or a close building contractor. This partner's liability is limited to the amount of his or her contribution to the share capital. You'll also need to draw up a set of articles of association when you set up the company, and plan for the associated costs.

Choosing the SARL (limited liability company) as your status as a craftsman in the construction sector means you can offer your customers a secure legal framework. What's more, you need less start-up capital, so you can get started even as a beginner. A limited liability company involves some heavy accounting. Among other things, you'll need to keep the mandatory books of account and draw up annual financial statements.

THE EIRL

TheEIRL (entreprise Iindividuelle à responsabilité limitée) allows you to be the sole manager and decision-maker of your construction company. This gives you greater freedom than a SARL, but you must assume full responsibility for the business. The formalities involved in setting up an EIRL construction company are straightforward and inexpensive. You have no articles of association to draw up, no share capital to hold, and you are subject to VAT, which you can also be exempted from.

You can also combine EIRL and auto-entreprise status, which is a great advantage if your activity is limited. Income tax and corporation tax are the options available to you. The EIRL is the ideal legal status for securing your personal assets, since you alone receive the profits from your work.

However, you cannot choose this status if you wish to have a partner to manage your business. Tax rates can also be high, depending on your income.

La SA

To set up an SA (société anonyme) in the construction industry, you need at least two shareholders and a minimum share capital of 37,000 euros. Each shareholder's liability is determined in proportion to his or her contribution. Shares are negotiable and transferable, but risks are limited. This represents a guarantee of security for customers.

The SA is mainly suitable for large construction companies, and requires the appointment of a statutory auditor, with no threshold requirement. Like all companies, it must have a registered office and be managed by a board of directors made up of several members, who may or may not be shareholders. To make things easier for you, you can also choose to domicile your business. For craftsmen in the building trades, the importance of domiciliation lies in the fact that it is highly adapted to the sector of activity and offers real time savings.

SAS

If you're planning to set up a construction company with a number of associates, and would like to simplify your administrative tasks at the same time, the SAS (simplified joint stock company) is a good option. This legal status means you don't need to raise a minimum amount of share capital. You only need to call in a statutory auditor above certain sales ceilings.

Your simplified joint-stock company specializing in construction is subject to corporate income tax (IS), orin some cases income tax. Your partners' liability is limited to their contributions, but they all have a free hand in appointing a company president. The advantages of this legal form mean that it is becoming increasingly popular with building tradespeople.

However, as with most companies, you need to factor in the costs of setting up a business, including those relating to the registered office. Have you ever wondered how much a registered office costs? It depends on your main needs. With SeDomicilier, you can be sure of finding the right business address at the best price.

Micro-business

As a builder, you can set up a micro-business easily and simply. You don't need a minimum share capital, and you don't have to draw up any articles of association. You do, however, need to have a vocational training certificate (CAP, Bac professionnel or BEP). Micro-businesses are subject to income ceilings, i.e. a VAT threshold of 34,400 euros and a maximum threshold of 72,600 euros for services.

The limits for sales of goods are 85,800 euros for the VAT threshold and 176,200 euros for the maximum micro-business threshold. Social security contributions are calculated on your sales: 12.8% for the sale of goods and 22% for the provision of services. Your accounting obligations are limited to keeping a revenue book on paper or in an Excel file. If you generate no sales, you have no social security contributions to pay.

Choosing a legal status for your construction company is no easy task. First and foremost, you need to think carefully about your business creation project. What's more, since nothing is set in stone, you can change your legal status at any time as your business evolves.