Your turnover and your activity reach a level which brings you out of the thresholds defined for the micro-enterprise regime (€ 82,800 for trade and housing activities; € 33,100 for services and professions liberal). You have no choice. We must move to another legal form …
Several options are available to you: either continue as part of a classic individual business (EI), go to the form of sole proprietorship with limited liability (EIRL) or constitute a EURL type company (Single member limited liability company) or SASU (simplified joint stock company), if you are alone. The SARL (limited liability company) and the SAS (joint stock company) will be legal in nature suited to a project with partners or shareholders.
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Remain an individual entrepreneur: EI with assignment heritage or EIRL
Among the different possible legal forms, EURL, SASU, SARL and SAS are among the companies. The difference with IS and EIRL is fundamental. Legally, only companies create a clear distinction between the natural person of the entrepreneur and his activity. The company has a legal personality. In the case of IS and EIRL, you exercise your activity as a natural person. This means that you take personal responsibility for any difficulties.
By default, Classic IE only protects your primary residence. The rest of your personal wealth is affected by your activity. It is strongly advised to carefully measure this feature. The matrimonial property regime is to be taken into account and possibly modified. To limit your responsibility as an individual entrepreneur, you have two solutions.
The first is to carry out a declaration of exemption from seizure before a notary. The latter will have the formality published at the mortgage office. In addition, the law provides for other means of information for third parties: mention in the Trade and Companies Register (RCS) for a trader, in the Trade Directory for a craftsman, or publication of a legal notice in a newspaper of legal announcements for a liberal profession, a farmer or a micro-entrepreneur.
The second possibility to limit your financial responsibility is to modify your individual business by transforming it into EIRL. For this legal form derived from sole proprietorship, you are going to assign a specific heritage to your activity. The intervention of a notary may be necessary for the valuation of an affected property. In the event of difficulties, only this asset allocation can be seized by the possible creditors of your company. There is no restriction on the EIRL: any individual enterprise, and even micro-enterprise can be created as an EIRL.
Incorporate a company before declaring the cessation of activity of the sole proprietorship
Transformation into society is a very different logic. It is relevant if your business is growing well and if you have plans to grow with other people. As mentioned above, companies allow you to separate your entrepreneurial activity from your personal and family wealth.. Economic responsibility is limited to the level of social capital. This protection has some constraints: lhe incorporation formalities are heavier and more expensive than that of a sole proprietorship. However, the company gives your company a more reassuring legal and economic status, especially for your partners (bank, supplier, customer, etc.).
To transform your micro-enterprise into a company, you will need to declare the cessation of activity of your business. The formalities are to be carried out at your center for business formalities (CFE). But it is advisable to first proceed with the creation of your EURL or SASU company. You must therefore choose your statutes, adopt them, deposit your share capital, have your statutes registered in the Trade and Companies Register (RCS) after publication of a legal notice. After these formalities, you will have a Kbis extract which will allow you to continue your activity within the legal framework of this new company. It is necessary think about the transition from one form to another. All your documents (commercial, accounting, etc.) will need to be updated. By taking the time to properly prepare for this phase, you make sure not to disrupt your activity.
Once this company is incorporated, you can register the cessation of activity of the sole proprietorship. It’s free. However, you should know that you will not be able to create a new activity with this micro-enterprise scheme before the end of the current year, plus one calendar year to follow.
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