Select your legal status according to preferences
What are the advantages of corporate legal status? When starting your company, the choice is not always easy. Follow the guide!
When starting a company, the choice is always complicated. Indeed, before starting the various administrative procedures, it is important to carefully choose your legal status according to your different needs and the project itself.
The importance of choosing the right legal status
Choosing your legal status is never easy for a variety of reasons. Sometimes the financial aspect takes precedence over other times the obligation to protect one’s situation and personal assets.the operating potential of the company can be elementary or, on the contrary, very large. In all cases, it would almost be appropriate to implement these ideas separately, although some statutes are particularly attractive for sectors of activity, to which we will return with logical explanations.
Fortunately, today several specialized platforms, as well as easier access to valuable advice, allow you to better choose your status and adapt your situation to the needs of the future company. Of course, it is advisable that you decide on the status of your company before starting the administrative work, because, for example, the official publication of the charter or sending it to the register of the competent commercial court logically indicates the type of company created. .
Although no legal status for a company may seem perfect in every way, some may benefit contractors in general.
What are the main advantages of existing legal statuses when starting your company, both depending on the sector of activity and future needs?
Note : this list excludes the micro-entrepreneurship regime, which is not a legal entity per se, but a tax regime, which may be of interest to the self-employed.
EI: Advantages of sole proprietorship
Highly valued by artisans and traders, the sole proprietorship, which is the largest activity in France in terms of number of companies, requires very few administrative procedures for its creation.
Subsequently, the same applies because the manager of the IE is not obliged to publish the annual accounts of the company concerned. In addition, this status is really adequate for companies with low turnover, for example, allowing them to grow their company gradually.
EIRL: Advantages of sole proprietorship with limited liability
While it has many similarities to EI, EIRL has an added advantage that can be especially important for crafters. Indeed, with this legal status, it is possible to separate assets into activities. Thus, personal and professional property are not put in the same basket, and no claim on personal property is possible in case of financial hardship.
In addition, EIRL allows for a wider choice of tax burdens: the manager decides between corporate taxes or income taxes.
EURL: Advantages of sole proprietorship with limited liability
In the eyes of the law, the real company bearing this name, EURL, requires annual reports and general meetings, contrary to what is mandatory with the options mentioned above.
However, this disadvantage can give way to a certain advantage depending on the situation. With no minimum capital required, EURL allows anyone to take steps towards creating a company worthy of their name and logically separate personal and professional assets.
Responsibility depends the amount of the contribution submitted at the time of creation of the company. Due to its simplicity, EURL status is very suitable for being a freelancer.
SARL: Advantages of a Limited Liability Company
If only one advantage of a SARL were retained, as the name suggests, it would likely be its legal ability to limit the liability of partners. Thus, protection is common when financial problems arise, and this is especially so due to the separation of property, which is set as an example for other legal statuses.
Like the EIRL, the SARL does not require any minimum amount to constitute the authorized capital, which can allow several partners to invest in the company without a large cash flow.
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SAS / SASU: Advantages of a simplified joint-stock company and SASU
SAS is a status often chosen by companies in the third sector. Why? Because in most cases, when the company is led by several people, the activities of SAS or SASU can be managed in the way the managers want. At this level, and from an administrative and financial point of view, these are the two legal statuses that leave the most room for the capabilities and sometimes precise choices of leaders.
For this, only in certain cases it is necessary to enter the charter on the exact activity of the company.
In addition, the company is directly linked to corporation tax and allows managers to choose whether dividends are paid or not. However, and as shown by the almost unlimited possibilities for changing this type of work, it is also possible to prefer income tax.
Finally, since we know that company directors are not always as well protected as possible, choosing this status makes the president dependent on the general social security system. If there is any problem, this aspect can help a person a lot. in question and logically for the sustainability of the company.
