The new sole proprietorship has just appeared: take advantage of its assets!

Simpler, and above all more protected: Since February 14, 2022, the new version of Sole Proprietorship offers a unique status for independent entrepreneurs.

Putting the future in full swing

Business has been doing well in France for several years, even during the Covid crisis. on 1Verse In the quarter of 2022, 286,319 companies were created, of which only 78,360 companies are in the form of “community” and above all 207,959 are independent companies, of which approximately 85% are small enterprises. Over the past ten years, individual companies have continued to grow and this is a real social phenomenon. There are now more than 3.5 million self-employed people doing their ‘self-employed’ activity.

They are merchants, artisans, farmers…, representative of the economic fabric of France with which we meet every day. Excluding agriculture, about half, according to INSEE, have activity in the three poles of trade and trade, health and social work, and construction, where the self-employed are largely privileged compared to only 36% of private sector employees who work in the same branches of activity .

The measures taken in recent years, notably the doubling of business turnover ceilings for the “simple solution for self-employees” of putting a micro-entrepreneur in, lowering fees and bonuses in case of business stagnation, have already been going in the right direction. The peak of the closure of the announced twenty measures has disappeared. There is no doubt that this “new version”, which makes the situation more homogeneous, and which automates the protection of the self-employed, will create more simulators and above all reassure the “undecided” who are just waiting to embark on an adventure .. entrepreneurial with ambition while minimizing risks. Many assets deserve focus.

Automatically limited liability

In the current “old” statutes of the EIRL (Individual Company with Limited Liability) the entrepreneur had to take steps to identify the items of his assets that he had allocated to his professional activity. Big change with this new mode of sole proprietorship since then The contractor is automatically placed under the limited liability regime. Even better: not only did the director’s legacy be protected, but the legislator also limited his possibility of permanent guarantee. However, wouldn’t the banks try to encourage the entrepreneur to resort to the corporate model for an unlimited principal’s guarantee?

Possibility to choose corporate tax

By right, an entrepreneur who establishes a sole proprietorship is subject to income tax, with all his profits counted as his income. This new situation would allow him, if he so desired, to choose ISIS. The feature cannot be neglected because it can Determine his wages and pay social fees only on this. Therefore, the legislator aligns this new status with that of EURL, a single-member limited liability company, which is only one of the forms of SARL.

There is still a gray area: in SARLs, the portion of dividends paid in excess of 10% of the share capital is subject to the social package, which nevertheless reaches 20%. Created under François Hollande’s five-year mandate, this social package has been abolished and reduced to certain categories (participation for example…) but not for small SARLs! It would therefore be interesting to know whether or not the executive decrees would speak of a part of the outcome except for the remuneration of the self-employed person who must be subject to this social package; Which, of course, is not desirable in any way!

Moreover, this transition from international relations to information systems will not constitute a cessation of activity (the legislator does not consider that one activity ceases and that another is created), and, accordingly, the latent values ​​​​must be subject to neutralization or postponement. This conditional attenuation principle would be applicable; It allows, by maintaining the same balance sheet values, not to be taxed when switching from IR to IS.

Be careful because ISIS has no legal personality

Sole Proprietorship is not a corporation and therefore has no legal personality. She does not survive her leader. Thus, in the event of discontinuation of activity or death, The reward will be subject to tax. Of course, as its name implies, this case is individual, so it is impossible to correlate it.

Self-employed worker applies

An entrepreneur who chooses to create a sole proprietorship is automatically subject to the TNS – Self-Employed System. I remember that Amount of compulsory social fees to which TNS with minimum basic quasi-equivalent coverage is subject, is lower, as a percentage of remuneration, than that of the employee. Of course, he can sign up for voluntary Social Security fees (Madeleine’s Supplemental Health Insurance, savings insurance, retirement, etc.), allowing him and his family to have proper coverage. This choice greatly reduces the difference in the end, but it still depends on this judging that those with this “independent” state of mind relate to.

This new position of the individual company can be accommodated according to certain criteria of the SARL, with less formality but also lower prospects for direct development in the case of strong growth. It risks delaying the transition to a company, which will also be more complicated and expensive. This section will integrate the creation of a company, but also the contribution of sole proprietorship with Tax arbitration for respect (capital gains). If we start from the premise that the entrepreneur aims to develop his activity, then this will lead to socialization. The only question remains: What is the best time to establish this company?

It must be remembered that the business creator will have to carefully consider many other parameters when initially choosing the legal status of his activity. But anyway, this new mode is best suited for freelancers! We bet this will translate very quickly into new numbers of entrepreneurs creation and success that we can be proud of.

This article was written with Christoph Alberola, Legal Director Walter France

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Pascal Veron Pascal Ferron, a Business School graduate, chartered accountant and chartered auditor, directs the 250-person service and advice group for entrepreneurs, Fimeco Walter France. It is located at No…
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