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Choose the legal form of your company

Verified 15 May 2022 - Legal and Administrative Information Directorate (Prime Minister)

Independent Plan: new measures concerning LPIAs

Published on 15 February 2022

Since February 16, 2022, it is no longer possible to choose the status of Individual Limited Responsibility Contractor (LPIA).

However, existing LRITs continue to operate under the same conditions.

That is what the law of 14 february 2022 on the independent .

If you want to create a company, you must choose a legal status. There are several criteria to consider when making your choice. The number of partners, the amount of contributions, the taxation of profits or the social or tax system of the partners are important criteria.

BPI France provides a simulator to help you determine the legal status(s) corresponding to your situation and activity: 

Help in choosing the legal status of the company

Differences between company statuses

Company Type

Social Capital / Contributions

Number of Associates

For what activity?

Financial responsibility of partners/contractor

Taxation of profits

Individual Entrepreneur (ISD)

None

1

Artisan, trader, industrialist or professional

Limited to professional heritage

IR: titleContent

Option for IS: titleContent

Limited Liability Single company (EURL)

€1

1

Artisan, merchant, industrialist, professional or pharmacist

Limited to the amount of contributions

IR, but option for IS

Limited business

€1

Between 2 and 100 associates

Artisan, trader, industrialist or professional

Limited to the amount of contributions

IS, but option for IR

Anonymous business (SA)

€37,000

2 (business not publicly traded)

7 (Listed business)

Artisan, trader, industrialist or professional

Limited to the amount of contributions

IS, but option for IR

Single-person simplified share business (UAS)

Free

1

Artisan, trader, industrialist or professional

Limited to the amount of contributions

IS, but option for IR

Simplified Share business (SAS)

Free

1

Artisan, trader, industrialist or professional

Limited to the amount of contributions

IS, but option for IR

Collective business (CNS)

Free

2 minimum

Artisan, merchant, industrialist, professional or pharmacist

Solid and indefinitely liable for business debts on all their personal property

No tax on business

Sponsored business (SCS)

Free

2 minimum sponsored1 sponsor)

Artisan, merchant, industrialist, professional or pharmacist

Commands: indefinitely and jointly and severally liable for business debts

Sponsors: responsible within the limits of their contributions

IR, but option for IS

Share Sponsored business (CBS)

€37,000 (or €225,000 in the case of public offerings)

4 minimum, 1 sponsored (merchant) and 3sponsors (non-traders, whose liability is limited to inputs)

Artisan, merchant, industrialist, professional or pharmacist

Commands: indefinitely and jointly and severally liable for business debts

Sponsors: responsible within the limits of their contributions

IS

Theindividual contractor allows you to carry on your business without having to create a legal entity.

You can use this legal form if you want to be an artisan, trader, industrialist or professional.

Number of Associates

You don't have a partner.

Amount of contributions

The individual entrepreneur does not require input because there is no concept of social capital for this company.

Scope of responsibility

As an individual entrepreneur, your personal and professional heritage are separated. This means that you are liable for company debts on your professional property only.

Taxation of profits

As an individual contractor, you are taxed directly under theIR: titleContent or option underIS: titleContent.

Social

As an individual entrepreneur, you are subject to the self-employed (self-employed) regime.

You can use this social form if you want to be a craftsman, trader, industrialist, professional or pharmacist.

Number of Associates

1 sole partner (natural or legal person)

Amount of contributions

Social capital is minimum €1.

20% cash contributions must be made at the time the business is made, with the money to be paid within 5 years.

Scope of responsibility

Your liability is limited to the amount of your contributions, unless you have made management errors or provided personal guarantees.

Taxation of profits

You are, as a single partner, taxed directly on income tax. However, the EURL can opt for business tax.

Social

The social system is different depending on the function:

  • As a partner, you are subject to the self-employed (self-employed) regime.
  • If you are a sole associate manager, you are subject to the self-employed (self-employed) regime.
  • If you are a third-party manager, not a partner, your status is that of an employee.
Tax

As an officer, you are subject to income tax either in the BIC or BNC, or in the area of salaries and wages.

FYI  

If you are the unique associate manager of the URL submitted to the IR, you can choose microcompany tax regime.

You can use this social form if you want to be an artisan, a trader, an industrialist, a professional or a pharmacist.

Number of Associates

2 minimum partners (natural or legal persons)

Amount of contributions

The amount of the share capital is freely fixed by the partners.

Scope of responsibility

The partners have the status of merchants and are jointly and severally liable for the debts of the business. They are responsible indefinitely for all their personal property.

Taxation of profits

There is no taxation at the business level.

Each partner is personally taxed on its share of income tax profits (in the Industrial and Commercial Profit - BIC category). The business can opt for business tax.

Social

Members are subject to the self-employed (self-employed) scheme.

You can use this social form if you want to be an artisan, a merchant, an industrialist, or a professional.

Number of Associates

The minimum number of associates is 4: 1 sponsored 3 sponsors.

Amount of contributions

Minimum social capital is €37,000 or €225,000 in the event of an offer to the public of securities.

At the creation of the FCC, at least 50% of cash (cash) contributions must be paid on the company’s establishment. The remainder will be paid within 5 years.

Scope of responsibility
  • Sponsors are jointly and severally liable for the debts of the business.
  • Sponsors are responsible to the extent of their contributions.
Taxation of profits

The profits of the business are subject to IS.

Social

The manager is subject to the status of assimilated employee or self-employed.

If the manager is a FCC partner, he or she is considered a self-employed person.

If the manager is unassociated and is bound by a contract of employment with the FCC, he is considered to be an employee.

Sponsor is not paid and therefore not affiliated with any social plan.

Tax

The general manager or third party of the business is taxed on income tax in the salary and wages category.

It can be managed by a board of directors with a CEO or by a supervisory board with a board of directors.

You can use this social form if you want to be an artisan, a merchant, an industrialist, or a professional.

Number of Associates

The minimum number of associates is:

  • 2 partners in non-listed businesses,
  • 7 partners in publicly traded businesses (no maximum).
Amount of contributions

The amount of contributions must be increased when the business is created €37,000 minimum.

50% cash contributions must be made at the time the company is established, with the money to be paid within 5 years.

Scope of responsibility

The liability of the partners is limited to the amount of their contributions.

Taxation of profits

Profits are subject to business tax.

An option for IR is possible when the business was created less than 5 years ago.

In order to opt for IR, an SA must meet the following 4 conditions:

  • The principal activity of an industrial, commercial, craft, agricultural or liberal activity (except management of its own movable or immovable property)
  • At least 50% of the total number of detainees held by natural persons and at least 34% by the management
  • Not listed on a regulated market
  • Employ fewer than 50 employees and achieve an annual turnover or balance sheet total of less than EUR 10 million
Social

The president is equal-paid.

The other members of the Board of Directors are not paid for their executive duties and therefore do not belong to any social system.

Tax

The Chairman of the Board of Directors shall be subject to the Salaries and Wages Regulations unless the business has opted for income tax.

You can use this social form if you want to be an artisan, a merchant, an industrialist, or a professional.

Number of Associates

2 partners minimum and 100 maximum (natural or legal persons)

Amount of contributions

The amount of the share capital is freely fixed by the partners. It shall be €1.

20% of the amount of cash contributions is obligatory at the time of constitution, the money to be paid within 5 years.

Scope of responsibility

The liability of the partners shall be limited to the amount of their contributions, unless they have committed management errors or granted personal guarantees.

Taxation of profits

Profits are subject to business tax.

However, it is possible to opt for income tax in the case of family LLC.

An option for IR is also possible, under certain conditions, for LLCs created less than 5 years ago.

In order to opt for IR, SARL must meet the following 4 conditions:

  • To carry out as a principal activity an industrial, commercial, craft, agricultural or liberal activity, excluding the management of its own movable or immovable property
  • At least 50% of the total number of detainees held by natural persons and at least 34% by the management
  • Not listed on a regulated market
  • Employ fewer than 50 employees and achieve an annual turnover or balance sheet total of less than EUR 10 million
Social

If the LLC is subject to the SI, the minority or egalitarian is assimilated and employed.

If the LLC is subject to the SI, the majority is self-employed (self-employed).

The members are subject to the employees' regime (if they have an employment contract).

Tax

The manager is subject to salary and wages (except the option of the IR business).

You can use this social form if you want to be an artisan, a merchant, an industrialist, or a professional.

Number of Associates

1 minimum partner, no maximum (natural or legal person).

Amount of contributions

Capital is freely fixed by shareholders.

50% cash contributions are obligatory at the time the company is established, with the money to be paid within 5 years.

Scope of responsibility

The liability of the partners is limited to the amount of their contributions.

Taxation of profits

Profits are subject to business tax.

An option for IR is possible when the business was created less than 5 years ago.

In order to opt for IR, a SAS must meet the following conditions:

  • The principal activity of an industrial, commercial, craft, agricultural or liberal activity (except management of its own movable or immovable property)
  • At least 50% of the total number of detainees held by natural persons and at least 34% by the management
  • Not listed on a regulated market
  • Employ fewer than 50 employees and achieve an annual turnover or balance sheet total of less than EUR 10 million
Social

If the business is subject to business tax, the social system is the regime of the employees (if they have a contract of employment).

The president is equal-paid.

Tax

The president is subject to salary and wages (except the option of the business for the IR).

You can use this social form if you want to be an artisan, a merchant, an industrialist, or a professional.

Number of Associates

1 unique partner: natural person or legal person

Amount of contributions

No minimum is required. Contributions of money shall be made at least half of their amount when the business is made.

Scope of responsibility

The contractor's liability is limited to the amount of its contributions, with exceptions (for example, mismanagement).

Taxation of profits

Profits are taxed on business tax (IS) or, optionally, on the business plan for up to 5 fiscal years.

Social

Executives are affiliated with the general social security system, whether or not they are associated. In the absence of remuneration, there is no affiliation.

Tax

The president is subject to the salary and wages regime unless the business opts for the IR.

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