The choice of legal status is one of the main steps in starting a business, as it allows you to conduct your activity with peace of mind. This article provides you with all the explanations about the different legal forms.
The sole proprietorship and the individual entrepreneur
The sole proprietorship is the most recent legal form. It is suitable for beginners who want to start their business at their own pace while complying with the legal form civility. Most of the formalities for creating this type of business are simplified, from registration to tax obligations and accounting. As for the individual entrepreneur (EI), it is similar to the sole proprietorship, except that its existence dates back further. Setting up an individual entrepreneur does not require complex formalities. Its creation does not require share capital, and its leader, the entrepreneur, has great freedom of action. However, tax will only be levied on your business income.
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The EIRL and the EURL
The individual limited liability company (EIRL) is the ideal legal status to limit liability while having a dedicated asset. The EIRL also allows the entrepreneur to protect their personal assets in case of bankruptcy. On the other hand, the EURL is suitable if you want to create a limited liability company composed of a single shareholder who is also the manager. The entrepreneur’s liability is limited to their contribution to the share capital. An EURL can easily become an SARL. All it takes is for a new partner to join the company’s capital.
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The SASU and the SARL
The single-member simplified joint-stock company (SASU) constitutes a simplified joint-stock company with a single shareholder. This shareholder is both the sole employee and manager of their company. They are therefore subject to the corporate tax regime. The limited liability company (SARL), on the other hand, is the most common legal status. It is indeed a commercial company that has legal personality and limits the financial liability of shareholders to their contributions. It can have up to 100 partners. Furthermore, the SARL offers certain legal assurances to shareholders. However, choosing this legal form imposes a great deal of operational rigor.
The SA and the SAS
The public limited company (SA) is also a business within which the financial liability of shareholders is limited to their contribution to the formation of the share capital. Additionally, their social charges are assessed based solely on each of their remuneration. The SA is also characterized by its credibility. It is indeed mandatory to appoint a statutory auditor. However, its establishment requires a substantial capital. It is ideal for carrying out large projects. In contrast, the SAS is a type of company whose operation is quite flexible. There is no minimum capital requirement to set up an SAS, and shares are easy to transfer under the supervision of the majority shareholder.
You now know the characteristics of each legal status.