▷ Move from sole proprietorship to incorporation 2020 -

For the individual entrepreneur, the growth of his activity raises the question of changing the legal structure. Indeed, there comes a point at which the levels of commitment of the entrepreneur require distinguishing the natural person from his activity. Even if the EIRL allows this distinction by limiting responsibility to the assets affected, the corporate form (EURL, SARL, SASU, etc.) still better protects personal assets. Obviously, in the event of proven error or management error, the entrepreneur remains responsible …

Forming a company above all allows the individual entrepreneur to move to another level of development. It also changes the relationship of the entrepreneur to his activity which he no longer does in his own name but on behalf of a legal person, society.

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Micro-entrepreneur: a tax regime for an emerging and limited activity

For individual entrepreneurs under the micro-enterprise tax regime (self-entrepreneur regime), the limits allowed are clearly defined by the amounts of turnover achieved. This regime applies as long as the annual duty-free turnover (turnover actually collected during the calendar year) does not exceed the following thresholds (adjust in proportion to the activity time):

  • € 82,200 for business activities and the supply of accommodation (hotels, guesthouses, rural lodgings, furnished accommodation for tourism);
  • € 32,900 for services and liberal professions under the BNC or BIC.

These thresholds are currently valid until December 31, 2016.

EURL almost as simple as EIRL status

The choice of legal structure depends on your development perspective and how you want to manage your business. Heritage protection exists in the regime of the individual entrepreneur with limited liability (EIRL), but this regime imposes formalities and has constraints that should not be overlooked.

The sole proprietorship with limited liability (EURL) will ultimately be almost as easy to set up as an EIRL scheme. But above all, the EURL has the advantage of companies, and allows to easily switch to the form limited liability company (SARL) if you want to involve other people in growing the business. In any case, it is important to measure the advantages and constraints of each form over the life of a business, and not just one or two accounting years.

Two ways to go from sole proprietorship to society

After the delisting of the sole proprietorship and the valuation of its assets, the transition to the company can be done in two ways.

The first is to bring the assets of his sole proprietorship to the company created. Depending on the amount of the contributions compared to the capital, the intervention of a contribution commissioner may be necessary to carry out the transaction in accordance with the rules.

The other way is through sale of the fund (trade, crafts) to the company created. This solution has two direct advantages. First, the company can take out a loan to finance the purchase and deduct interest from its taxable income. Second, the entrepreneur collects the sale of his fund.

During the creation of the company, before the various formalities (choice and drafting of the statutes, publication of a legal announcement in an authorized newspaper, registration with the RCS …), it is important to verify that you can create a company ( diplomas, experience) to develop your activity there. You should also be sure that you can direct your address to the chosen address. Certain activities require a municipal authorization or more simply the agreement of the condominium or the neighborhood depending on the type of activity.

The change of legal status gives rise to the publication of a legal notice, you can carry out this formality online via our service by clicking below:

Publication of legal notices

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