Business of Liberal Limited Liability (SELARL): what you need to know
Verified 20 November 2024 - Directorate for Legal and Administrative Information (Prime Minister)
The business of Liberal Limited Liability (SELARL) is a business for regulated professions. It enables these professionals to carry out their activities in the form of capital businesses.
The business of Liberal Limited Liability (SELARL) is a reserved social form only to regulated professions.
The operation of SELARL is largely modeled on that of the limited liability company (SARL). The SELARL benefits from the system of capital businesses (tax on businesses, liability of partners limited to contributions...).
Before you perform your registration to SCR: titleContent, SELARL must have been registered in the professional association or have been approved by the competent authority.
In addition, it must send each year to the competent licensing authority or professional association for registration a statement of the composition of its share capital and voting rights, as well as an updated version of its statutes.
Formation of share capital
The amount of the share capital shall be determined freely by the partners (€1 minimum). The share capital may be constituted by contributions of cash (money) and contributions in nature (goods: equipment, machinery, buildings, customers, etc.).
From inception, at least 20% of the cash contribution must be freed, i.e. paid into an account at the disposal of the business. The remaining balance must be released within 5 years that follow registration.
Assessment of contributions in kind by a commissioner for contributions is mandatory in principle. Nevertheless, the members may decide unanimously not to appoint a commissioner for contributions where the 2 conditions the following are combined:
- None of the contributions in kind has a value greater than €30,000,
- And the total value of in-kind contributions is no more than half of the share capital.
Depending on his contribution to the capital, each member receives a certain number of shares giving him a right to vote and one right to dividends.
Please note
SELARL also allows industrial inputs. These contributions are not included in the composition of the share capital.
Holding of share capital
SELARL should consist ofat least 2 partners. They may be partners natural persons individually or as members legal persons (other businesses).
In principle, more than half of the share capital and voting rights must be held, either directly or through a business of professional financial interests (SPFPL), by professionals practicing within the business.
However, depending on the profession pursued by the business, the majority ownership of the capital may be open to others.
Health profession
The majority of the share capital may be held by :
- Professionals or legal persons exercising the rightsocial object of the business
- Businesses for financial holdings in the liberal professions (SPFPL), provided that the majority of the capital and voting rights of these are held by any professional or legal person established in France or any other European person pursuing the profession forming the business object of the business of pursuit in which the shareholdings are acquired.
Legal profession
The majority share capital and voting rights may be held by :
- Professionals or legal persons established in France and practicing a legal or judicial profession
- European persons practicing a legal or judicial profession
- Businesses of financial holdings in the liberal professions, provided that the majority of the capital and voting rights of the latter are held by persons exercising a legal or judicial profession, established in France, or by a European person.
The business of liberal practice must include among its members, directly or through a business of financial holdings of liberal professions, at least one person practicing the profession constituting the object of the business.
Technical and living environment profession
The majority share capital and voting rights may be held by :
- Professionals or legal persons established in France and practicing thesocial object of the business
- European persons exercising the objects of the business
- Businesses of financial holdings in the liberal professions, provided that the majority of the capital and voting rights of the latter are held by any professional or legal person established in France or any European person exercising the profession forming the business object of the business of exercise in which the holdings are acquired.
Financial liability of members
The partners are not responsible for the debts of the business only to the extent of their contribution.
In other words, if the business runs into financial difficulties, the partners will not be obliged to repay the creditors beyond their contribution. The partners will only lose what they have invested in the business.
Example :
If the business is unable to repay the monthly installments of a loan or to fulfill the payment of an order to a supplier, the creditors cannot seize the personal property of the partners.
Management body
SELARL is directed by one or more managers natural or legal persons. The manager must be chosen from associates and must exercise its regulated liberal activity within the business.
Please note
The manager shall be appointed and dismissed by the decision of one or more of the partners representing more than half of the shares.
In relations between partners, the powers of the manager are determined by the statutes. In the silence of the articles of association, the manager may all management acts in the interest of the business (e.g. subscribing to professional insurance, sending of invitations to meetings, payment of social security contributions).
In dealing with third parties, the manager has the greatest powers to act in all circumstances on behalf of the company, subject to the powers expressly conferred on members by law.
Collective decisions of the members
Decisions which exceed the powers conferred on the manager are taken by members meeting in general assembly:
- Either in ordinary general meeting (AGO) : it decides on the annual approval of accounts, the appointment, dismissal and remuneration of the manager. Decisions shall be adopted by one or more partners representing more than half of the shares.
- Either in extraordinary general meeting (AGE) : it shall take a decision in the event of amendments to the Staff Regulations (e.g. change of business purpose or name, increase in share capital). Decisions shall be adopted by a majority of 2/3 of the shares held by the members present or represented.
Please note
By exception, the transfer of registered office is voted in AGE by one or more members representing more than half of the shares in the company, whereas the change of nationality requires the unanimity of the members.
SELARL subject to IS
SELARL falls under the EU regimebusiness tax (IS). As such, it carries out an annual income statement no 2065, within 3 months of the end of the financial year. However, if the financial year is closed on 31 December or if no financial year is closed in a year, the declaration shall be made at the latest on 2e working day following 1er May.
The amount of business tax (IS) is calculated from the results of the last completed fiscal year. The tax rate is 25% on the totality of that tax result.
Please note
One reduced rate 15% shall apply to small and medium-sized companies which have a duty-free turnover not exceeding €10 000 000 and whose capital is fully paid up and held for at least 75% by natural persons. This rate applies to the share of profits up to €42,500. Beyond that, the tax rate is 25%.
Members of NBC
Since 1er January 2024, the natural associates of liberal exercise businesses (SELARL, SELAS, SELAFA...) know a new system of taxation of their remuneration resulting from their liberal activity.
Previously taxed in the category of salaries and wages, their remuneration paid by the business in respect of the exercise of the liberal activity (referred to as ‘the technical remuneration ") now falls within the category of non-commercial profits (NBC).
The main consequence is that SEL associates will no longer be eligible for the lump sum deduction of 10% provided for in respect of salaries and wages for professional expenses, this deduction not being provided for in respect of NBC.
Please note
The remuneration of the office of the company paid to the manager is not affected by this change. The manager must distinguish this remuneration, which remains taxed in the salary and wages category.
The non-commercial profits (NTBs) of the member fall under either the controlled declaration, or of the scheme micro-BNC if its duty-free revenue in year N-1 or N-2 does not exceed €77,700. In assessing this threshold, the following remuneration must be taken into account:
- Technical remuneration paid by SEL
- The member’s professional expenses paid in his name and on his behalf by SEL, in respect of year N-1 or N-2 which would have been declared in NLC if they had been received from 2024.
Controlled Declaration
Any SEL member covered by the controlled declaration must to keep accounts : journal (revenue/expenditure) and fixed asset book.
The partner must perform a annual income statement (Declaration No 2035-SD) to determine his BNC income, the amount of which he then transfers to his supplementary income tax return (Declaration No 2042 C-PRO).
The partner may deduct actual business expenses (mileage costs, small equipment, magazine subscriptions...) of its result, provided that they have not already been taken over directly by SEL (and therefore already deducted from the result thereof).
Pension contributions paid under a ‘Madelin’ contract are deductible the profits declared in respect of the liberal activity of the members in SEL.
Micro-BNC
An SEL member reporting to the micro-NLC shall keep a record of the daily details of his business receipts.
He must also carry forward the amount of his technical remuneration on his supplementary income tax return (Declaration No 2042 C-PRO).
Taxable profit is then determined by applying a abatement flat-rate of 34% on the amount of revenue excluding VAT.
Pension contributions paid under a ‘Madelin’ contract are deductible the profits declared in respect of the liberal activity of the members in SEL.
Please note
To allow for the 2025 income tax return, SEL partners must complete a questionnaire and send it to the companies Tax Office (SIE) on which the SEL with which they are associated depends.
Who shall I contact
As of this reform, any SEL partner must be identified by a Siren number. He must therefore register as a member of SEL and not as an individual contractor, on the company formalities office.
In spite of this new registration, Liberal activity is indeed in the name and on behalf of the business.
The members, who perform the professional acts, do not act in their own name. They do not meet the definition of individual entrepreneur. This calls for 3 details :
- SEL's partner is not subject to VAT, he must not charge VAT on his technical remuneration to the SEL in which he carries on his business.
- SEL's partner is not liable to the CFE. Since the liberal activity is carried out by the business, it is therefore solely liable to pay the company property tax (CFE).
- SEL's partner does not may not opt for assimilation to the EURL which carries with it the liability to the SI.
Distribution of dividends
When the business makes a profit, the SEL partner is required to collect dividends. Such dividends shall give rise to one of the following methods of taxation, you can choose from:
- Flat-rate flat-rate levy (PFU) : the default regime, dividends are subject to a 12.8% to which are added 17.2% social security contributions.
- Progressive Income Tax Schedule : regime applicable on option, dividends are included in the income tax base of the partner after applying a abatement of 40%. The partner's total income will then be taxed according to its tax bracket (from 0 to 45%).
Income brackets | Income tax bracket rate |
|---|---|
Up to €11,294 | 0% |
From €11,295 to €28,797 | 11% |
From €28,798 to €82,341 | 30% |
From €82,342 to €177,106 | 41% |
More than €177,106 | 45% |
In either case, the partner must declare the dividends received on his or her personal income tax return as " income from movable capital ”.
The manager is appointed among the partners SELARL. It has a different social system in accordance with its shareholding business.
Majority Manager
From a social point of view, the majority manager of SELARL falls under the social welfare system of Self-employed persons (SFTs). They are therefore attached to the social security scheme for the self-employed (SSI), which is integrated into the general social security scheme.
Minority manager
From a social point of view, the minority manager of SELARL is assimilated employee and benefits from the social protection provided for by the general social security scheme.
The social contributions linked to the director and paid by the company are the same as those of an executive employee, except unemployment insurance. However, they may, if they so wish, take out additional unemployment insurance.
He is covered by sickness and maternity insurance, family allowances, insurance against accidents at work, basic pension insurance, supplementary pension insurance and pension insurance.
Please note
To learn more about the social protection of the business manager, you can consult our dedicated card.
Each partner is personally responsible for the professional acts he performs.
Where a member commits a fault in the course of his professional activity, he shall be required to pay the damages to the victim (a client or a patient), through of his personal assets.
Example :
- A dental surgeon injures his patient during dental care.
- A public accountant makes errors in the bookkeeping and in the tax returns of his client, who is then subject to a tax adjustment.
- A notary does not check the validity of the title of the seller of a property. It may be liable to the purchaser who discovers that the property is encumbered with a mortgage or a bondage.
In this situation, the business is jointly and severally liable with him. This means that the victim of the harm can sue the business or the professional who committed the fault. If it is pursued, the business can then go back to the partner for reimbursement.
Consequently, SEL and its individual members are required to subscribe to a professional indemnity insurance (CPR). This insurance must be taken out even before exercising, a certificate of subscription may be required at the time of registration with the Order.
PII provides support in finding an amicable solution, covering legal and procedural costs, and compensating for damage.
Authorization of members
Within SELARL, the shares are freely transferable between partners, between spouses (spouses or partners of Civil partnerships) and between ascendant and descending.
On the other hand, transfers of shares to third foreigners to the business are subject to approval procedure. In other words, the shares cannot be transferred to third parties with the consent of the majority of the partners representing at least 3/4 unit-holders engaged in the profession within the business.
In the case of an assignment subject to approval, the proposed assignment shall be notified to the business and to each of the partners. The business must give notice of its decision within 3 months from the notification. In the absence of a reply within that period, consent to the assignment shall be deemed to have been given.
The statutes may, by unanimity of the members, lay down the principles and procedures applicable to the determination of the value of the shares. The value of the shares may take into account a value representative of the civilian clientele.
If the business refuses to consent to the transfer, the members shall, within three months of such refusal, to acquire or cause to be acquired the sharesat a price fixed by an expert appointed for that purpose.
Warning
As part of a SELARL, more than half of the share capital and voting rights must be heldeither directly or through a business of financial contributions from the liberal professions (SPFPL), by professionals practicing within the business.
Declaration of assignment
Assignment established by an act
Assignments of social rights established by an act shall be subject to the formality of registration within the period of 1 month from the date of the act.
The deed of assignment must be deposited on the spot or by post, in 2 copies and accompanied by the payment of fees (by check or transfer) to the department in charge of the registration of the domicile of one of the parties or of the residence of the notary if the assignment is made by notarial act.
Who shall I contact
Assignment not established by an act
Assignments of social rights which are not not established by an act must be declared within the 1 month from the date of transfer:
- or by means of the online service available on impots.gouv.fr in your professional area, under Actions > Assignments of social rights
Impots.gouv.fr professional space
- or by means of Form No 2759, to be filed with the registration department on which one of the parties is dependent.
Assignment of social rights not established by an act to be declared obligatorily (form No 2759)
Who shall I contact
Payment of the registration fee
The transfer of shares shall give rise to the payment of a registration fee to the tax administration.
Payment of this fee shall, in principle, be at the expense of the purchaser. Nevertheless, the assignment may provide that the payment of this fee is to be borne by the assignor or shared between the two parties.
This duty shall be fixed at 3% and calculated on the transfer price less one abatement equal to €23,000 reduced to percentage of the number of shares transferred in social capital.
Example :
A partner disposes of 50 shares in a SELARL whose capital is divided into 400 shares. It transfers its shares to the purchaser for a value of €50,000.
The amount of the registration fee to be paid by the purchaser is calculated as follows: - (23,000 x Number of shares sold ÷ Total shares in the business) x 3%.
Applied to our example, this would result in: 50,000 - (23,000 × 50 ÷ 400) = 47,125 × 3% = €1,414 the registration fee to be paid to the tax authorities.
The rate is 5% for businesses with a predominance of real estate, i.e. businesses where more than half of the assets are made up of buildings not used for his professional purposes.
The amount of the registration fee may not be less than €25.
SELARL | SELAFA | |||
|---|---|---|---|---|
Number of partners | 2 to 100 (or 1 partner in SELARLU) | Minimum 2 (or 1 partner in SELASU) | Minimum 2 | Minimum 2 |
Leader | Manager(s) | President + Directors-General | Chairman + Board of Directors or Executive Board | Manager(s) |
Share capital | Free | Free | €37,000 minimum | Free |
Allowed Inputs | Currency, nature and industry | Currency, nature and industry | Currency and nature only | Currency, nature and industry |
Release of cash contributions | At least 1/5 from creation | At least 1/2 from creation | At least 1/2 from creation | Specific to the profession exercised by the business |
Financial liability of members | Limited to inputs | Limited to inputs | Limited to inputs | Indefinite |
Taxation of profits | Business tax (IS). Possible option for IR | Business tax (IS). Possible option for IR | Business tax (IS). Possible option for IR | Income tax (IR). Possible option for SI |
Social security of the director | TNS if majority management, treated as employee in other cases | Assimilated employee | Assimilated employee | Self-employed person (SST) |
Corporate securities | Shares | Actions | Actions | Shares |
Eligible for trading on a regulated market | No | No | No (unlike traditional SA) | No |
Transmission of securities | Majority of 3/4 of partners practicing in SELARL | Majority of 2/3 of partners practicing in SELAS | In accordance with the procedures laid down in the statutes of SELAFA | Majority of partners representing at least 3/4 of the votes |
Registration fee | 3% of the sale price after a reduction of €23,000 | 0.1% of the transfer price | 0.1% of the transfer price | 3% of the sale price after a reduction of €23,000 |
System of businesses for self-employed persons (Articles 40 to 95)