Government announcements concerning the life of very small businesses and SMEs were expected. In early September, Prime Minister Edouard Philippe lifted the veil on the proposed development for the micro-enterprise regime (ex-autoentrepreneur) …

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Much higher ceilings…

At 1st January 2018, the turnover ceilings will be doubled compared to the current situation to keep the simplified social system of the micro-entrepreneur. For shops, the maximum turnover goes from 82,800 euros to 170,000 euros per year. In the area of ​​services, the micro-entrepreneur can go up to 70,000 euros instead of 33,100 euros. The principle of VAT exemption does not change.

Another novelty related to turnover, for seasonal activities, there is no longer any question of pro rata temporis. This means that a seasonal micro-enterprise can keep its tax and social security system as long as it does not exceed the thresholds that concern it.

… And exemptions for small micro-enterprises

For micro-entrepreneurs with very limited activity (turnover of less than 5,000 euros per year), the government plan provides for an exemption from the property assessment minimum. Up to 30,000 euros in annual turnover, an independent entrepreneur who creates or takes over an activity will be exempt from payment of social security contributions during the first 12 months. Up to 40,000 euros, the exemption will be declining.

Offer modern tools to permanently forget the self-employed

In terms of procedures for the declaration, an application for smartphones and tablets is announced, with the aim of simplifying the declaration of income for micro-entrepreneurs. In the same logic, the very old site lautoentrepreneur.fr will be finally renovated. Since the creation of the auto-entrepreneur regime in 2009, it hasn’t changed much. It is also true that the term autoentrepreneur has become so prevalent, in statistics as in public debate, that it will be necessary to propose new tools to move to micro-enterprise (or return to the auto-entrepreneur).

Exceeding the thresholds of turnover of the micro-enterprise what to do next?

If your micro-enterprise grows well, if the activity continues for two consecutive years, you risk reaching the defined thresholds fairly quickly. You exit the simplified plan and then fall under sole proprietorship. By default, the main principles (liability, protection of the main residence, etc.) are the same.

Several questions will arise then.

  • Can you exercise new activities?

As an individual entrepreneur, you can exercise certain activities that were prohibited for you as a micro-entrepreneur: agricultural activities, rental of equipment and durable goods, or those relating to real estate VAT for example.

  • What is your social and tax regime?

Currently, the two regimes differ in terms of taxation of profits and income.

Going under the sole proprietorship regime,

  • You will be subject to the tax regime of simplified real profit (BIC) or from controlled declaration (BNC) since the January 1st following the year of the overshoot;
  • You will be subject to the VAT since the 1st day of the month crossing the threshold;
  • You will be assimilated to social security scheme for the self-employed, from the January 1st following the overshoot.

The activity carried out by the individual entrepreneur defines the category in which it is taxed: non-commercial profits (BNC); industrial and commercial profits (BIC); or agricultural profits.

Given the announcements, we have to wait to accurately compare the new features of the microenterprise with those of the conventional sole proprietorship when they really take effect.

  • Can you, do you want to continue your activity alone?

If you want to continue on your own, you can stay in the individual business. For companies with no planned investment, it will be enough to continue your activity. To develop the activity with other entrepreneurs, the company is essential. Depending on financial needs, whether you want to keep control of operations or not, and your development prospects, you will choose a limited liability company (SARL) or a simplified joint stock company (SAS). To employ an employee, the legal framework of the company will also be simpler.

As a reminder, the self-employed regime has long represented more than half of business creations in England. In recent years, some of the new independent entrepreneurs have fled the famous and decried RSI and have chosen to form companies of the simplified one-person joint stock company type (SASU).

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