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Creation of a business: six criteria to choose the correct status

Entreprise individuelle, EURL, SARL, SAS, SA... The possibilities are many but choosing the right legal status is the determining factor. Depend on the developm

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Creation of a business: six criteria to choose the correct status

Entreprise individuelle, EURL, SARL, SAS, SA... The possibilities are many but choosing the right legal status is the determining factor. Depend on the development of the company, its funding capacity, the distribution of power and responsibility of the leaders.

Is meant by the legal form the legal framework that allows the company to see the light of day legally. That the activity is commercial, industrial, artisanal or liberal, the contractor has the choice between two main legal forms : individual enterprise (IE) or company (SARL, SA, EURL...).

The choice between a sole proprietorship or society according to several criteria :

1/ The willingness to associate or not : only the company can create a company in several.

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2/ The creator who wants to remain master on board will choose the individual company, EURL (sole proprietorship with limited liability) or the SASU (simplified joint stock company with a single shareholder).

READ ALSO >> COMPARISON CHART. The five legal forms of business-to-magnifier

In a sole proprietorship, the creator is responsible for his debts as his personal estate is confused with its business assets. In the case of seeds, the creditors can seize the personal property of the creator (with the exception of their primary residence) unless it has established a declaration of immunity from seizure in front of a notary or opt for EIRL.

READ ALSO >> How the law Macron protects the principal residence of the entrepreneur

The LIMITED liability company (LLC consisting of a sole proprietorship) is more secure because the responsibility of the leader is limited to the amount of its contributions. The SASU is reserved for larger-scale projects because it is possible to accommodate investors.

>> Service Partner : go on Legalstart.fr to make the steps online to create your company

In the individual company, as in society, it is possible to hire employees. But be careful, in hiring staff, the individual entrepreneur takes risks. In the case of a legal conflict, he is 100% responsible for, including his personal property.

3/ The rules of operation of the company : in a sole proprietorship, they are reduced. The choice of the company requires more formalism.

4/ The financial needs : a company and a sole proprietorship does not require the same needs. If the needs are substantial, the creation of an SA (société anonyme) or a SAS (simplified joint-stock company) may be appropriate, including to open capital to investors.

READ ALSO >> comparative Table of the different types of status: SARL, SAS, SA

5/ Le plan social : it differs depending on whether the activity is carried on in a corporation or a sole proprietorship. The contractor is thus subject to the social regime of independent if it is individual entrepreneur, a sole partner of an EURL, manager or shareholder of SARL subject to corporation tax. It contributes to the plan of the employees he is managing a minority or egalitarian LLC, president, CEO, or the ceo of ITS.

6/ The tax system : there also, and according to the legal form chosen, the profits of the company are subject to the tax on the income (entreprise individuelle, EURL) or to the tax on companies (SARL, SA, SAS, SASU). In the first case, the business leader focuses on his personal statement of income the amount of the profits (industrial and commercial profits, BIC, for merchants and artisans, or non-commercial profits, BNC, liberal professionals).

In the second, the profits of the company are reported in the category of salaries and wages.

READ ALSO >> Infographic: the legal status of the company

legal Status: what to remember

You're only :

• EI (entreprise individuelle)

• EURL (sole proprietorship with limited liability)

• or SASU (société par actions simplifiée unipersonal)

You create several :

• LLC (limited liability company)

• SAS (simplified joint-stock company)

• SA (public limited company)

• or SNC (société en nom collectif).

You have a heritage to protect : prefer the form of society that allows you to separate personal assets and business assets. Individual enterprise (IE) presents indeed the drawback of mixing the two.

Read our complete file

SAS, SASU : what you need to know on these articles of association SAS: attention to the drafting of the statutes! COMPARATIVE TABLE. The five legal forms of business to the magnifying glass

You need an amount of capital to be high : there, too, prefer the shape societal (SA or SAS) that allows us to welcome outside investors.

This article has been updated to the 29/04/2019. VF

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