legal forms undertake

Choosing your legal form, the heart of business creation

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The choice of the legal form of a company is important. It is an essential step in your business creation project. The chosen status will allow it to develop its activity in a legal environment. However, you have to choose your status according to your needs. Indeed, it is necessary to make the right choices.

Studying your project to adapt its legal form

Before embarking on an entrepreneurial adventure, you must first take a step back from your project. Indeed, there is no point in running, you have to leave at the right time. In this sense, for every individual who wishes to undertake, one must study his project. The aim is to define by following a legal framework and a legal form. Of all the possible structures, there is not, strictly speaking, a miracle structure. However, certain criteria will reinforce an entrepreneur for one choice or another.

Thus, among these criteria, there is first of all the nature of the activity. Indeed, some activities require a particular legal form. Following, it is also necessary to determine whether or not the contractor is alone in theact of undertaking. It may well be possible to partner with other people for financial reasons. As an entrepreneur, you also have to deal with yourself and your ability to carry the project. Indeed, some trades require specific and specific skills or diplomas. In the entrepreneurial project, we must also take into account the risks, the tax system most suited to his situation, the social system, the need or prospects of financing or the credibility of the structure.

Then you have to choose a status. Thus, from a legal point of view, the entrepreneur must choose a natural person or a legal person.

So for the individual, the company and the individual are one. This is the status of the individual company. In this legal form,there is no differentiation between the person and the company. Professional and personal assets are intertwined. So the contractor is liable for his own property if there’s a debt. However, since 2015, the main residence has been protected.

The legal person corresponds to the member constitution, it includes the SARL, the SAS or the SASU, for example. The principle of the company lies in the fact that there are one or more partners. They are “owners” according to the contribution they have made to the latter. It is important to know that a legal representative is a legal representative. Thus, the corporation forms a kind of shell that protects partners and shareholders.

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Choosing a legal form is a key step in an entrepreneurial project

Choosing between individual company or company

So depending on the consideration of the criteria seen during the first stage of creation, it is time for the entrepreneur to make the choice between an individual company or a company.

Individual enterprise is a legal form simplified business, which is why many entrepreneurs choose this form. To start your business quickly, it’s a suitable form. From the age of 18, a person can declare an individual business without having to build up a minimum capital. However, as mentioned above, this status involves certain risks that must be taken into account. From the point of view of the tax system, the individual entrepreneur is taxed on his income there is no tax at the level of the company . Depending on turnover, it is possible to choose between the micro-enterprise scheme, the simplified real plan and the normal real plan. For example, if an entrepreneur chooses a micro-business, their social contributions are calculated as a % of monthly or quarterly sales. If it does not generate a turnover, it will not have to pay social security contributions.

On the other hand, there are the form of society. These legal forms include sarL, EURL, SAS and SASU. Creating a company involves several things. First, you have to choose a corporate name. To do this, we must make sure that it is not already the property of another. You should look to the INPI to see if the name is available. Then you have to designate and locate a head office. Generally the most natural track is to put the address of his local.

However, there are other solutions. Indeed, one can also locate the head office at his home, even if there are prohibitions in the lease. This is possible if the activity does not receive customers or harm tranquillity. However, if there is a prohibition on the lease, after 5 years you have to find another place. It is also possible to call on a domicile company that will find an address for the various legal forms

Following, it is necessary to raise social capital between the partners. For example, for a SARL or EURL, it is possible to bring 20% of the social capital to the creation and the rest over the next 5 years. For the SARL, the principle is the same except that the percentage of contribution is 50%.

Statutes must also be drafted. This document is important and it synthesizes the company’s information, including the name, the address of the headquarters in addition to the contributions… They can be written by a lawyer or a lawyer. But it is also possible to enjoy free status on the Bpifrance website for example.

In a society, it is necessary to determine a social object. It must be both wide enough and especially precise. Indeed, the activity can evolve, and the social purpose must always be coherent. In addition, it must leave the possibility of possible openings. The leader may be appointed, but when he changes, the status will also have to be changed to update him. The company will also have to be registered and filed with the relevant Business Formality Centre (CFE).

For all types of companies, capital is freely determined by the partners. It can be a cash contribution, a contribution in kind or a contribution to industry.

From a tax point of view, the company’s profits are subject to the Corporate Tax (IS). The result is determined in the income statement and takes into account the actual expenses of the company. Depending on the type of company chosen, the social regime of the executives is different, it varies between manager, president, self-employed or assimilated employee.

In this sense, if being an entrepreneur is an adventure, studying and setting up is also an adventure in its own right. It is during this key stage that everything is played out… Thus, it is necessary to clearly identify its needs and take into account the advantages and disadvantages offered by each legal form,including being advised by the most experienced legal or figure professionals.



“Individual enterprise, a status to create a business easily”,Economy.gouv, article of 27 March 2018

“Knowing the legal, fiscal and social principles of the company and the executive” Webinare of February 18, 2021 “I also undertake at home with my ICC”

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