The SARL (Société à Responsabilité Limitée)
Considered one of the favorite legal statuses for construction companies, the SARL (limited liability company) offers you the option to choose different VAT (Value Added Tax) schemes. These include the basic VAT franchise and the simplified VAT scheme. The latter allows you to file an annual VAT return. You can also opt for the standard VAT scheme if you want to file monthly or quarterly returns.
Furthermore, the steps to creating a construction company with the SARL status are not complex. You need at least one partner who can be from the same family as you or a close construction entrepreneur. The liability of this partner is limited to the amount of their contribution to the share capital. You must also draft articles of association when creating the company and anticipate the related costs.
Choosing the SARL as a status as a craftsman in the construction sector allows you to offer a secure legal framework to your customers. In addition, the initial capital is lower, which helps you get started even as a beginner. The limited liability company involves a slightly cumbersome accounting management. Among other things, you must provide for the mandatory accounting books and the preparation of annual accounts.
The EIRL
The EIRL (Entreprise Individuelle à Responsabilité Limitée - sole proprietorship with limited liability) gives you the option of being the sole manager and decision-maker of your construction company. You have more freedom here than with a SARL, but you must assume full responsibility for the company. The formalities for setting up a construction company with EIRL status are simple and inexpensive. You don't have to draw up articles of association or have any share capital, you are subject to VAT and you can also be exempt from it.
You also have the option of combining EIRL and self-employed status, which is a great advantage if your activity is limited. Income tax and corporation tax are options available to you. EIRL is a legal status suitable for securing your personal assets, as you are the sole recipient of the profits from your work.
However, you cannot choose this status if you want to have a partner to manage your business. Tax rates are also sometimes high depending on your income.
The SA (Société Anonyme)
To create a public limited company (SA) in the construction industry, you need at least two shareholders and a minimum share capital of 37,000 euros. Each partner's liability is set in proportion to their contribution. The shares are negotiable and transferable, but the 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 an auditor, regardless of any threshold conditions. Like any company, 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. Also, to make things easier for you, you can choose to domicile your company. For tradespeople in the construction industry, the importance of domiciliation lies in the fact that it is very well suited to the sector of activity and offers a real time saving.
The SAS
If you're planning to start a construction business with partners and want to simplify administrative tasks, a SAS (société par actions simplifiée - simplified joint-stock company) is a good option. This legal structure means you don't need a minimum share capital. You only need to appoint an auditor if you exceed certain turnover thresholds.
With your simplified joint-stock company specializing in construction, you are subject to corporate income tax (CIT) or, in some cases, to personal income tax. The liability of your partners is limited to their contributions, but all have freedom of decision in the appointment of a company president. The advantages of this legal structure mean that it is increasingly popular with construction professionals.
However, like most companies, you should budget for business setup costs, including those related to the registered office. Have you already asked yourself: how much does business address registration cost? It depends on your main needs. With SeDomicilier, you're guaranteed to find great business addresses at the best prices.
Micro-business
As a building craftsman, you can easily and simply create a micro-enterprise. You don't need a minimum share capital or articles of association to draft. However, you must have a CAP (Certificate of Professional Aptitude), a vocational Baccalaureate or a BEP (Vocational Studies Certificate) to practice. The micro-enterprise is subject to income ceilings, i.e. a VAT threshold of 34,400 euros and a maximum threshold of 72,600 euros for services.
The thresholds for the sale of goods are 85,800 euros for the VAT threshold and 176,200 euros for the maximum threshold in micro-enterprises. Social security contributions are calculated on your turnover, i.e., 12.8% for the sale of goods and 22% for services. Accounting obligations are limited to keeping a record of receipts on paper or in an Excel file. If you do not generate any turnover, you do not have to pay social security contributions.
Choosing a legal status for your construction business isn't easy. First and foremost, you need to carefully consider your business creation project. Also, since nothing is set in stone, you can change the status at any time depending on how your business evolves.
Written by our editorial expert
September 25, 2023
