Company creation: choose the legal form of your company
Verified 01 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)
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 members, the amount of contributions, the taxation of profits or the social or fiscal regime of the members are important criteria.
BPI France provides a simulator to help you determine the legal status or statuses corresponding to your situation and your activity:
Assistance in choosing the legal status of the company
Company Type | Share capital / Contributions | Number of partners | For what activity? | Financial liability of partners / entrepreneur | Taxation of profits |
---|---|---|---|---|---|
Sole trader (SE) | None | Not concerned | Craftsman, tradesman, industrialist or professional | Limited to professional heritage | IR: titleContent Possible option for IS: titleContent |
single-member company with limited liability (EURL) | €1 | 1 | Craftsman, tradesman, industrialist, professional or pharmacist | Limited to the amount of contributions | IR, but possible option for SI |
Limited Liability business (LLC) | €1 | Between 2 and 100 partners | Craftsman, tradesman, industrialist or professional | Limited to the amount of contributions | IS, but possible option for IR |
Single person simplified share business (SASU) | Free | 1 | Craftsman, tradesman, industrialist or professional | Limited to the amount of contributions | IS, but possible option for IR |
Simplified share business (SAS) | Free | Minimum 2 | Craftsman, tradesman, industrialist or professional | Limited to the amount of contributions | IS, but possible option for IR |
Anonymous business (SA) | €37,000 | Minimum 2 (unlisted business) Minimum 7 (publicly traded business) | Craftsman, tradesman, industrialist or professional | Limited to the amount of contributions | IS, but possible option for IR |
Business in a general name (CNS) | Free | Minimum 2 | Craftsman, tradesman, industrialist, professional or pharmacist | jointly and severally liable indefinitely for the debts of the business on all their personal property | No tax on business |
Single Sponsorship business (SCS) | Free | 2 minimum (1 general partner.1 patron) | Craftsman, tradesman, industrialist, professional or pharmacist | General partners: indefinitely and jointly liable for the debts of the business Sponsors: responsible within their contribution | IR, but possible option for SI |
Equity Limited business (CAS) | €37,000 (or €225,000 in the case of an offer of securities to the public) | 4 minimum, 1 general partner (merchant) and 3sponsors (non-traders, whose liability is limited to supplies) | Craftsman, tradesman, industrialist, professional or pharmacist | General partners: indefinitely and jointly liable for the debts of the business Sponsors: responsible within their contribution | IS |
FYI
As of February 16, 2022, it is no longer possible to choose the status ofsole proprietor with limited liability (EIRL).
The status ofsole trader allows you to carry out your business without creating a legal entity.
You can use this legal form if you want to be a craftsman, tradesman, industrialist or professional.
The status of individual entrepreneur does not require input because there is no concept of share capital for this company.
Scope of liability
As an individual entrepreneur, your personal wealth and your occupational heritage are separated. This means that you are responsible for the company's debts on your professional assets only.
Taxation of profits
As an individual entrepreneur, you are taxed directly under theIR: titleContent or on security option of the IS.
Social security system
As a sole trader, you are subject to the self-employed (self-employed) scheme.
You can use this social form if you want to be a craftsman, a trader, an industrialist, a professional or even a pharmacist.
Number of partners
1 partner only (natural or legal person)
Amount of contributions
Social capital is minimal €1.
20% cash contributions are mandatory at the time of the business, with the money to be paid out within 5 years.
Scope of liability
Your liability is limited to the amount of its contributions, unless you have committed mismanagement or have granted personal sureties.
Taxation of profits
You are, as a sole partner, taxed directly for income tax purposes. However, the EURL can opt for business tax.
Social security system
The social security system differs according to the functions:
- Asassociate, you are subject to the self-employed (self-employed) scheme.
- If you are single associate manager, you are subject to the self-employed (self-employed) scheme.
- If you are third-party manager, non-associate, your status is that of assimilated employee.
Tax system
As an officer, you are subject to income tax either in the BIC or NBC, or in the case of wages and salaries.
FYI
if you are the sole associate manager of the EURL subject to the IR, you can choose the taxation of micro-companies.
You can use this social form if you want to be a craftsman, tradesman, industrialist, or practice a liberal profession.
Number of partners
2 minimum and 100 maximum partners (natural or legal persons)
Amount of contributions
The amount of the share capital is freely determined by the members. It is fixed at €1.
20% of the amount of the cash contributions must be paid at the time of incorporation, the money must be paid within 5 years.
Scope of liability
The liability of members shall be limited to the amount of their contributions, unless they have committed mismanagement or granted personal sureties.
Taxation of profits
Profits are subject to business tax.
However, it is possible to opt for income tax in the case of the family SARL.
An option for IR is also possible, under certain conditions, for SARLs created less than 5 years ago.
To opt for IR, the SARL must comply with the following four conditions:
- To carry on primarily an industrial, commercial, craft, agricultural or professional activity, excluding the management of one's own movable or immovable property
- Being held at 50%at least by natural persons and 34% at least by the leadership
- Not to be quoted on a regulated market
- Employ fewer than 50 employees and have an annual turnover or balance sheet total of less than €10 million
Social security system
If the SARL is subject to the IS, the manager minority or egalitarian is considered to be an employed person.
If the SARL is subject to the IS, the manager majority is self-employed (self-employed).
Members are subject to the employees' regime (if they have an employment contract).
Tax system
The manager is subject to salaries and wages (except business option for IR).
You can use this social form if you want to be a craftsman, a trader, an industrialist, or a professional.
Number of partners
1 single member: natural person or legal person
Amount of contributions
No minimum is imposed. Cash contributions shall be paid at least half of their amount when the business is set up.
Scope of liability
The contractor's liability is limited to the amount of his contributions, except exceptions (mismanagement for example).
Taxation of profits
Profits are taxed on business tax (SI) or, on option, on the personal business plan for up to 5 fiscal years.
Social security system
Managers are affiliated to the general social security scheme, whether they are associated or not. If there is no remuneration, there is no affiliation.
Tax system
The President is subject to the salary and wages regime unless the business opts for the IR.
You can use this social form if you want to be a craftsman, tradesman, industrialist, or practice a liberal profession.
Number of partners
1 minimum partner, no maximum (natural or legal person).
Amount of contributions
Capital is freely set by shareholders.
50% cash contributions are mandatory at the time of the company's incorporation, with the money to be paid within 5 years.
Scope of liability
The liability of members shall be 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 set up less than 5 years ago.
In order to opt for IR, an SAS must meet the following conditions:
- To carry out primarily an industrial, commercial, craft, agricultural or professional activity (except for the management of one's own movable or immovable property)
- At least 50% owned by natural persons and at least 34% by managers
- Not to be quoted on a regulated market
- Employ fewer than 50 employees and have an annual turnover or balance sheet total of less than EUR 10 million
Social security system
If the business is subject to business tax, the social security scheme is the scheme for employees (if they have an employment contract).
The president is considered a salaried employee.
Tax system
The President is subject to salaries and wages (unless the business for IR is optional).
It can be run by a board of directors with a CEO or by a supervisory board with an executive board.
You can use this social form if you want to be a craftsman, tradesman, industrialist, or practice a liberal profession.
Number of partners
The minimum number of partners is as follows:
- 2 partners in unlisted businesses,
- 7 partners in listed businesses (no maximum).
Amount of contributions
The amount of contributions must be higher when the business is created €37,000 minimum.
50% cash contributions must be paid when the company is established, with the money to be paid within 5 years.
Scope of liability
The liability of members shall be 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 set up less than 5 years ago.
In order to opt for IR, an SA must meet the following 4 conditions:
- To carry out primarily an industrial, commercial, craft, agricultural or professional activity (except for the management of one's own movable or immovable property)
- At least 50% owned by natural persons and at least 34% by managers
- Not to be quoted on a regulated market
- Employ fewer than 50 employees and have an annual turnover or balance sheet total of less than EUR 10 million
Social security system
The president is considered a salaried employee.
The other members of the board of directors are not paid for their managerial duties and are therefore not covered by any social security scheme.
Tax system
The Chairman of the Board of Directors is subject to the Wages and Salaries Statute, unless the business has opted for income tax.
You can use this social form if you want to be a craftsman, tradesman, industrialist, professional or pharmacist.
Number of partners
minimum 2 members (natural or legal persons)
Amount of contributions
The amount of the share capital is freely determined by the members.
Scope of liability
The partners are traders and are jointly and severally liable for the debts of the business. They are liable indefinitely for all their personal property.
Taxation of profits
There is no taxation at the business level.
Each partner is personally taxed on his or her share of profits in income tax (in the category of industrial and commercial profits - BIC). The business can opt for business tax.
Social security system
Members are subject to the self-employed (self-employed) scheme.
You can use this social form if you want to be a craftsman, a trader, an industrialist, or a professional.
Number of partners
The minimum number of partners is 4:1 general partner and 3 sponsors.
Amount of contributions
The minimum share capital is €37,000 or €225,000 in the case of an offer of securities to the public.
At the creation of the FCC, at least 50% of the cash contributions (money) must be paid on the day the company is incorporated. The remainder will be paid within 5 years.
Scope of liability
- The general partners are jointly and severally liable indefinitely for the debts of the business.
- Sponsors are liable to the extent of their contributions.
Taxation of profits
The profits of the business are subject to SI.
Social security system
The manager is subject to the status of a self-employed person.
If the manager is a member of a FAS, he or she is considered to be self-employed.
If the manager is a non-partner and is linked to the SCA by an employment contract, he is considered to be a self-employed person.
The limited partner is not paid and is therefore not affiliated to any social plan.
Tax system
The general partner or third party manager of the limited partnership business is taxed on income tax in the salary and wages category.
Who can help me?
Find who can answer your questions in your region
- Commercial Code: Articles L221-1 to L225-270
- Commercial Code: Articles L526-22 to L526-26Status of the individual contractor (IS)