What is the best legal status option for your business project? EI, EURL, SARL, SA, SAS, SASU, SNC, Scop: there are many legal forms to choose from, depending on your situation, your objectives and your ambitions.
The BASQUE INVEST team explains.
Company or individual company?
Do you want to start your own business but don’t know which legal status to choose for your professional structure?
In order to choose the best option, analyze the following points of your project:
- What is your professional activity?
For some activities, the legal status will be mandatory. Depending on your project, you may wish to contact the “guichet unique des entreprises” in your region at the Chamber of Commerce in Bayonne.
- Do you want to work alone or with others?
The choice of whether or not to join forces is a key factor in the success of your project.
If you want to run your business on your own, independently and autonomously, without having to answer to anyone, an individual company is the obvious choice.
Find out more about the advantages and disadvantages, from a personal and professional point of view, before committing yourself.
If you have a common project and want to share this entrepreneurial adventure, a partnership is the best option.
Think carefully about the advantages and disadvantages, from both a personal and a professional point of view, before committing yourself.
The associated structure offers the possibility of developing your business over the medium or long term (pool of funds, skills, professional network, etc.).
- Do you have assets to protect?
In the case of an individual company, this question does not arise.
Whether or not you have assets to protect, your personal assets (e.g. real estate for residential use) and your business assets are separate.
If your company runs into financial problems, your personal assets cannot be seized.
In the case of a company, this will depend on the type of status. Partners are generally jointly and severally liable for the health of the business. Their personal assets may be involved.
- What are your funding and financing needs?
When you set up your business project, you need to define a business model and draw up a financial plan with projected accounts.
The fact that you are partners means that you can raise additional funds from investors who will be more convinced of the soundness of your project.
BASQUE INVEST can help you put together your grant applications. The maximum amount of public aid will be the total amount of equity (capital + associated current accounts).
- Who manages the company?
In the case of an individual company, there is no need to ask this question, since you will be the sole manager of your business.
In the case of a company, the partners manage the business not in their own name, but on behalf of the company. Management decisions (sales strategy, financing, suppliers, etc.) are therefore shared.
- What are the tax and social security regimes?
If you are a managing partner, there are several options for your social security system. For example, you can become an employee of your company.
Fiscally speaking, depending on your status, you will be subject to income tax (individual company or salaried executive) or corporation tax.
Individual company
You and your business form a single entity.
The advantage: total freedom in managing your structure and your business. Sales strategy, communications strategy, internal organization and remuneration are entirely up to you.
You can communicate in your own name or under a trade name.
Since you are subject to income tax, depending on your professional activity, you declare your income as BIC (Bénéfices Industriels et Commerciaux) – sale of products, or BNC (Bénéfices Non Commerciaux) – sale of services. You can also opt to pay corporation tax.
You will be treated as a self-employed worker for social security purposes, and your contributions will be different from those of salaried employees.
The formalities involved in setting up a business are straightforward and depend on the nature of your activity. As of January 1st, 2024, you must register your company online at the INPI one-stop shop.
You can also start a business on your own by creating a company: either an EURL (entreprise unipersonnelle à responsabilité limitée – SARL unipersonnelle) or a SASU (SASU: société par actions simplifiée unipersonnelle).
There are many subtleties involved, so contact the professionals in business creation to make the right choice. The BASQUE INVEST team can put you in touch with the business creation department of the Bayonne Pays Basque Chamber of Commerce and Industry.
Choosing the legal status of your company
The different types of legal status available for setting up a company, depending on your project: number of partners, amount of capital, social security system, etc…
- SARL – limited liability company
Number of partners: minimum 2 – maximum 100 (individuals or legal entities)
Managers: one or more managers, who must be natural persons – partners or third parties.
Taxation of profits: corporate income tax or option for personal income tax (SARL less than 5 years old).
Decision-making: manager / Ordinary General Meeting / Extraordinary General Meeting.
- SA – société anonyme
Number of shareholders: minimum 2 for unlisted companies / minimum 7 for listed companies – no maximum (individuals or legal entities).
Management: Board of Directors (3 to 18 shareholder members).
Taxation of profits: corporate income tax option (SA less than 5 years old).
Decision-making: Chief Executive Officer or Chairman.
- SAS – simplified joint-stock company
Number of shareholders: 1 minimum – no maximum (individual or legal entity).
Directors: Chairman (individual or legal entity).
Taxation of profits: corporate income tax / option for IR (SAS less than 5 years old).
Decision-making: determined by the partners.
- SNC – general partnership
Number of partners: minimum 2 – no maximum (individuals or legal entities).
Management: one or more managers, individuals or legal entities – partners or third parties.
Taxation of profits: partners’ personal income tax / corporate income tax.
Decision-making: manager / ordinary general meeting / extraordinary general meeting.
- Scop – cooperative production company
Number of associates: 2 minimum (Scop SAS) / 2 minimum (max. 100 for Scop SARL) / minimum (Scop SA).
Management: elected by salaried associates.
Taxation of profits: corporate income tax.
The BASQUE INVEST team can help you set up your business in the Basque Country.
Choice of legal status, search for business premises, networking, help with grant applications: a one-stop, free and confidential service to help you set up successfully in France, in the Basque Country.
