De facto separation between personal and professional assets

The main novelty introduced by the single status of individual entrepreneur is the separation between the professional and personal assets of the entrepreneur.

The goal is to protect the entrepreneur's personal assets by making them elusive to professional creditors. It is however possible for the individual entrepreneur to waive the benefit of this separation of assets, on written request of a creditor.

The entrepreneur's professional assets include the property, rights, obligations and securities held by the entrepreneur and used for his professional activity:

• the business, craft and agricultural funds, all the tangible or intangible assets which constitute them and the rights relating thereto, as well as the right of presentation of the clients of a liberal professional;

• movable goods such as goods, equipment and tools, agricultural equipment and means of mobility for itinerant activities such as home sales or services, transport or delivery;

• immovable property used for the business, including that part of the sole trader's principal residence used for business purposes. Where such immovable property is owned by a business of which the sole trader is a shareholder or member and whose principal activity is to make it available to the sole trader, the shares of such a business;

• intangible assets such as customer data, patents, licenses, trademarks, designs, and more generally intellectual property rights, trade names and brands;

• cash funds, any cash held at the place where the professional activity is carried on, the sums entered in the bank accounts dedicated to that activity and the sums intended to cover current expenditure relating to that activity.

Create a unique status and terminate the EIRL

The reform creates a unique status of sole trader, the EIRL scheme is being put on hold. It is therefore no longer possible to create an EIRL since February 15, 2022. However, current and pre-existing EIRLs will retain this status. However, it is necessary to draw up a declaration of the taking over of existing affected assets and to lodge a descriptive statement.

The new status of individual entrepreneur is also different from EIRL because it no longer obliges the entrepreneur to open a separate bank account in order to carry out his business. However, this does not apply to traders and micro-entrepreneurs with a turnover of more than EUR 10 000 for two consecutive years.

Possibility of opting for business tax

The new status of sole trader in taxation gives the trader the possibility to choose between income tax (the default type of taxation) and business tax.

Transfer of professional assets

Individual business The objective of this unique status of individual entrepreneur is to simplify the procedures related to the

Individual business It is thus easier to move from the status of a worker to that of a business because there is no longer any need to liquidate the professional assets.

Individual business Liquidation is also no longer necessary for the transmission of a The transmission will be by sale, donation or business.

This universal transfer of professional assets must include all its elements (rights, property, obligations and security rights).

Simplification of access to the Self-Employed Workers' Allowance (ITA)

This change in the status of sole trader is accompanied by an evolution in the self-employed workers' allowance (SLA). It is now also open to self-employed workers who have permanently ceased their activity because it was no longer economically viable.

This criterion of the company's non-viability corresponds to a reduction of at least 30% in income tax income.

The sole trader must obtain a certificate stating that his activity is not economically viable. This certification must be issued by a "trusted third party" who may be a public accountant or a person authorized by an institution of the consular network of the sector of activity in question.

Other conditions to be met in order to benefit from the ITA are:

1. be registered in Pôle emploi;
2. have been self-employed for a minimum uninterrupted period of two years in a single company on the date of cessation of activity;
3. have a previous income from employment of at least EUR 10 000 in one of the last two years of self-employment;
4. have monthly resources below the RSA (less than € 598.54 per month for a single person on 1^er July 2022).

In addition, the ITA is no longer subject to a court order setting out the reasons for stopping the activity.

The entrepreneur will be entitled to an allowance of 600 to 800 € for a maximum of 6 months. This amount varies according to the average annual amount of previous income from activities over the period of activity concerned.

These provisions shall apply to those who fulfill the opening conditions from 1^er April 2022.