GETTING STARTED! OKAY, BUT WHICH STATUTES?
Hello everyone!
I know this title sounds barbaric, but we've come to the end of the business articles that have been getting you all excited! During this business week, it was very inspiring for me too to read your feedback and see what interests you! This article is a bit like the Sistine Chapel, which was produced in collaboration with our super accountant, whose contact details you'll find at the end of the article.
I promise, I've tried to make it as easy to understand as possible - you'll see, it's almost fun! The more I reread the article, the more I realize that it couldn't be clearer.
When you launch your business, there are two things you need to know: are you going to sell products (also known as trading), or are you going to sell a service? When you know this, it's great, but you can also do both. You'll just need to know roughly which activity will bring in the most income in order to determine your main activity (APE), and which collective bargaining agreement you fall under, if you intend to have employees.
Paperwork....
So, for example, to recap, you've decided to open a pastry shop. You're going to sell, so you're going to trade, but on Saturdays you're also going to run cookery workshops for children, so you're going to sell services... We can guess that the bulk of your activity is sales, so your main activity is pastry trading.
Now, what you really need to know is that there are 3 legal options open to you:
- Self-employment, or AE for short!
- Sole proprietorship or EI for short...
- Companies, big choices: SAS / SASU / SARL (it's like an SAS but on its own) / EURL (it's like an SARL but on its own), it's going to be fine...
What's important for auto-entrepreneurs and sole proprietorships is that there's no distinction between you and your company.
For companies, on the other hand, your liability is limited to the capital contributed (except in the case of very, very, very serious misconduct). Understand that your company is a person in its own right. Congratulations on your new baby! Your company is therefore a legal entity that doesn't exist. It's like a little ghost!
The auto-entreprise It's the perfect way to get started, because it's ultra-simplified! If you know what you want to do, but you're not sure how mature your project is, and you don't have the slightest idea of your estimated turnover, the easiest way to get started is to become an auto-entrepreneur.
- ultra-simplified accounting
- no VAT
- No paperwork, everything online
- It won't cost you any money, but for some years now it's been essential to have a second account to receive cash.
- You'll be considered a non-salaried worker (TNS), and you'll contribute to the RSI / URSSAF depending on your activity (shopkeeper, craftsman, consultant).
Please note, however, that this is a simplified system, but it is limited to a certain annual turnover. 32,900. If your business takes off and exceeds this threshold, you'll go straight to sole proprietorship (EI) status. This is the ideal time to go and see an accountant, who can advise you on the best solution for your activity, the structure best suited to your business and the procedure to follow. Auto-entrepreneurship is often a transitional system, and it's a great way to get started because the tax system is extremely simple. Taxes and social security contributions are calculated on the basis of declared sales, then you benefit from deductions that vary according to whether you're in the service or trading business.
Unlike sole proprietorships and companies, auto-entrepreneurs are not subject to VAT. So if you incur expenses on services, you won't be able to reclaim the VAT on the purchases you make. For example, if you're a graphic designer making paper decorations, you won't be able to separate your costs from your services, so you'll have to inflate your estimates to include your incompressible creative costs. But don't overdo it, just do as you please...
It's a great status for freelancers who do a lot of services, such as graphic designers, stylists and photographers. It's a springboard from which to launch yourself.
Sole proprietorshipI'd go so far as to say that it's the logical continuation of the auto-entreprise (AE), and I'd even go so far as to say that once you've reached the 32,900 euro ceiling, you'll be able to start your own business.The sole proprietorship (EI) is best suited to cases where you're on your own. In other words, you don't have any partners, but you can still have employees. This status is ideal when your business has been running for some time and you have a clear view of your results and ambitions. In practical terms, the transition from auto-entreprise (AE) to sole proprietorship (EI) requires you to take your former auto-entrepreneur accounting activity to an expert (Dolicrane recommended).
The sole proprietorship is more commonly used for small businesses where there is generally no partner, or for liberal professions such as doctors, lawyers and craftsmen...
- This system won't cost you any more money, but you will need to open a business bank account.
- There will be more paperwork with URSAFF and VAT...
- VAT system
- Accounting a little more complex (we strongly advise you to call on the services of an accountant).
- As manager of the company, you will be considered as a non-salaried worker (TNS). You will pay RSI / URSSAF contributions, depending on your activity (retailer, craftsman, consultant).
- However, when it comes to taxing your business, you'll be assessed on your actual sales minus your actual expenses, rather than on a flat-rate basis as with auto-entreprise.
The company will give your business credibility, especially when you're working with other companies, and it gives you the possibility of associating with other people. Don't hesitate to ask your accountant for any assistance you may be eligible for. To draw up your company's articles of association, you'll need to ask a lawyer for help, depending on the complexity involved.
If you wish to form a partnership with a third party, "the famous associates", you will need to choose the SARL or SAS company, rather than the sole proprietorship or self-employed entrepreneur.
- If your accounting is a little more complex, you'll need a chartered accountant.
- Subject to VAT
- You'll still have to deal with URSAFF and VAT paperwork, but no more than a sole proprietorship (EI).
- It will cost you more money: manager's remuneration, chartered accountant, lawyer if necessary...
- As the manager of a company (SARL/EURL..it's a president in SAS), you will be considered as a non-salaried worker (TNS). You will contribute to the RSI/URSAFF if you have a SARL or EURL. However, with an SAS, you won't be a self-employed worker (travailleur indépendant non salarié), you'll be treated as an employee (assimilé salarié), and this could cost you more - ask your expert!
And then there are other little things to know, such as the "prime pour l'emploi" (employment bonus) from which you can benefit. It's a 4,000 euro bonus for the first employee hired on a permanent contract, and it's been extended for 2017! And there's more good news: with the A.R.E (aide au retour à l'emploi), you are entitled to unemployment benefits if you were an employee and left via a "rupture conventionnelle", for example. The scheme allows you to maintain your unemployment benefits for the full duration, so if you set up a company such as EURL/SAS/SARL/SAS, you don't have to pay yourself through the company until your unemployment benefits run out. So it's a great help for starting up a business!
A huge thank you to Nicolas Barnet, of the firm Batt&Associés for his invaluable advice and time!
I know it's scary, but frankly all these social/accounting/legal issues are much easier to digest with people whose job it is. I'd also recommend reading about this site and take notes, it's very instructive! Or directly on the government website here. If it's still "Chinese" at the end of this article, don't hesitate to go and see an accountant. Because knowing how to surround yourself with the right people is essential! The energy you're going to spend trying to do these things yourself is energy you won't be using to create added value for your business. Your accountant is there to help you make money, not lose it!