The tables hereafter shown in this document compare the main legal structures mainly used in France, available to entrepreneurs.
We have included in this table several commercial-type enterprises as well as two cases of non-commercial structures.
The cases for commercial-type companies are:
- E.I. (Entreprise Individuelle) – Individual Enterprise;
- E.U.R.L. (Entreprise Unipersonnelle à Responsabilité Limitée) – Enterprise with limited liability;
- S.A.R.L (Société A Responsabilité Limitée) – Company with limited liability;
- S.A. (Société Anonyme) – Private Company;
- S.A.S. & S.A.S.U (Société par Actions Simplifiées – Société par Actions Simplifiées Unipersonnelle) – Companies with stock actions simplified;
- S.N.C. (Société en Nom Collectif) – Collectif ownership company;
- S.C.O.P. (Société Coopérative et Participative) – Cooperative and Participative Company.
The two non-commercial structures are:
- Associations, which are useful to philanthropic entrepreneurs or commercial types, with non-competitive activities;
- The S.C.I. (Société Civile Immobilière) which are useful for the organization of real estate assets.
The following criteria will be further developed:
- Number of partners;
- Management style;
- Responsibility of partners;
- Responsibility of leaders;
- Capital amount and contribution release;
- Contributions in kind;
- Net profit taxation;
- Executives’ compensation tax regime;
- Social scheme for managers;
- Social scheme for partners.
COMMERCIAL COMPANIES
Individual Entrepreneur | E.U.R.L | S.A.R.L | S.A. | S.A.S and S.A.S.U | S.N.C | S.C.O.P | |
NUMBER OF PARTNERS | The individual entrepreneur only | One single partner (natural or legal person) | 2 partners minimum 100 maximum (physical or legal persons) | -2 partners minimum in unlisted companies -7 partners minimum in listed companies -Partners may be physical or legal persons | Minimum 1 partner-No maximum (physical or legal persons) | Minimum 2 partners no maximum legal (physical or legal persons) | 2 partners minimum – no maximum (Scop SAS) 2 partners minimum – maximum 100 (Scop SARL) At least 7 partners (Scop SA) |
MANAGEMENT STYLE | The individual entrepreneur only | A manager (mandatory natural person) who can be either the sole shareholder or a third party. | One or more manager(s), who must be natural person(s) (either one of the partners or a third party) | Either a board of directors (3 to 18 members) who must be shareholders. The chairman is appointed by the board of directors from among its members.Or a management board and a supervisory board | A single president, natural person or legal person. The partners freely determine in the articles of association the rules of organization of the company | One or more manager(s), natural or legal person. It can be either one of the partners or a third party | A manager elected by the salaried partners for 4 years (6 years for the Scop SA) |
PARTNER’S RESPONSABILITY | Liability of the individual entrepreneur limited to goods used for the professional activity, in terms of professional debts. the main residence is legally unseizable by professional creditors. Automatically benefits from the separation of personal and professional assets. | The partner’s liability is limited to the amount of their contributions, unless they have committed management errors or granted guarantees on a personal basis | The partners’ liability is limited to the amount of their contributions unless they have committed management errors or granted guarantees on a personal basis | The partners’ liability is limited to the amount of their contributions | The partners’ liability is limited to the amount of their contributions | Partners are jointly and severally liable on all of their personal properties | The partners’ liability is limited to the amount of their contributions. |
LEADER’S RESPONSABILITY | Civil and criminal liability of the entrepreneur | Civil and criminal liability of the manager | Civil and criminal liability of the manager (s) | Civil and criminal liability of the manager (s) | Civil and criminal liability of the manager (s) | Civil and criminal liability of the manager (s) | Civil and criminal liability of the manager (s) |
CAPITAL AMOUNT AND CONTRIBUTION RELEASE | Share capital does not exist | Amount freely fixed by the partner, according to the needs of the company Compulsory cash release of 20% upon incorporation and the balance within 5 years | Amount freely fixed by the partner, according to the needs of the company Compulsory cash release of 20% upon incorporation and the balance within 5 years. | €37.000 minimum Compulsory release of 50% of the cash contributions to the constitution and the balance within 5 years | Amount freely fixed by the partner, according to the needs of the company Compulsory release of 50% of the cash contributions to the constitution and the balance within 5 years | Amount freely fixed by the partner, according to the needs of the company Full release of contributions to the constitution is not compulsory. The balance will be paid at the request of the management | € 18.500 for Scop SA €30 for Scop Sarl or SAS |
CONTRIBUTIONS IN KIND | N/A | Possible: Must be indicated in the articles of association, appointment of an auditor in charge of the assessment but possibility of dispensing with it in certain cases | Possible: Must be indicated in the articles of association, appointment of an auditor in charge of the assessment but possibility of dispensing with it in certain cases | Possible: Must be indicated in the articles of association, appointment of an auditor in charge of the assessment | Possible: Must be indicated in the articles of association, appointment of an auditor in charge of the assessment but possibility of dispensing with it in certain cases | Possible: Must be indicated in the articles of association, appointment of an auditor in charge of the assessment is not compulsory | See SARL, SAS or SA depending on the legal form chosen |
NET PROFIT TAXATION | The entrepreneur is taxed directly under income tax, either on a flat-rate basis (micro-enterprise regime) or in real terms (real tax system). The sole proprietor subject to a real tax regime may, however, opt for corporation tax. | The company is not taxed, the sole shareholder is taxed directly for income tax as in a sole proprietorship. The EURL can opt for corporate tax and thus the manager will pay tax on the income on his remuneration and the company will be taxed on the net profit to the corporation tax | The net profits are subject to corporation tax and the remuneration of managers to income tax The company may opt for income tax in the case of family SARL or, under certain conditions, for SARL less than 5 years old | The net profits are subject to corporation tax and the remuneration of managers to income tax The company may opt for income tax under certain conditions, for SA less than 5 years old | The net profits are subject to corporation tax and the remuneration of managers to income tax The company may opt for income tax under certain conditions, for SAS less than 5 years old | The company is not taxable, each partner is taxed on his share of profits for income tax (in the category of industrial and commercial profits) The company can however opt for corporate tax | Profits are subject to corporation tax Exemption from corporation tax for the fraction of profits distributed to employees in respect of the participation and for that set aside as part of the investment provision |
EXECUTIVES COMPENSATION TAX REGIME | Income tax in the category corresponding to the activity of the company or, in the event of the option for corporation tax, in that of wages and salaries | Income tax in the category of industrial and commercial profits or non-commercial profits (EURL subject to income tax), or in that of wages and salaries (EURL subject to corporation tax). The single associate manager of EURL in the IR regime can choose the tax regime of the micro-enterprise | Salaries and wages tax regime, except if the company opt for income tax | Salaries and wages for the chairman of the board of directors (for conventional SA)or for the Chairman of the Management Directory Board for other companies Unless the company option for income tax | Salaries and wages tax regime for the president, except if the company opt for income tax. | Income tax in the category of industrial and commercial profits | Tax regime of salaries and wages |
SOCIAL SCHEME FOR MANAGERS | Self-employed workers scheme | Self-employed workers scheme when the manager is the sole shareholder Assimilated-employee when the manager is not a partner | SARL submited to corporation tax: Minority or egalitarian manager: assimilated-employee Majority manager: self-employed Option to IR: See SNC regime | SA in classic form: The chairman is considered an employee The other members of the board of directors do not come under any social security scheme because they are not remunerated for this function | The president is assimilated-employee | Self-employed workers scheme | Managers are assimilated to employees in particular with regard to unemployment insurance |
SOCIAL REGIME FOR PARTNERS | N/A | Self-employed worker scheme | The partner can be a self-employed worker if he is in the majority, or an employee if he is equal or minority. | Employees’ scheme (if they have an employment contract) | Employees’ scheme (if they have an employment contract) | Self-employed workers scheme | Employees scheme (if they have an employment contract) |
NON-COMMERCIAL COMPANIES
ASSOCIATIONS | SCI | |
NUMBER OF PARTNERS | 2 members minimum no maximum | 2 members minimum no maximum |
MANAGEMENT STYLE | Freely chosen mode of management. The association is often run by a board of directors, which usually elects an office (president, treasurer and secretary) | One or more managers, partners or not, natural or legal persons |
PARTNER’S RESPONSABILITY | Non-executive members are not responsible | Partners are liable on all of their personal properties |
LEADER’S RESPONSABILITY | Civil and criminal liability of the manager (s). Liability reduced under certain conditions when the manager performs his duties on a voluntary basis. | Civil and criminal liability of the manager (s) |
CAPITAL AMOUNT AND CONTRIBUTION RELEASE | There is no social capital Members can make contributions with the possibility of recovering them when the association is dissolved. | No minimum |
CONTRIBUTIONS IN KIND | Each contribution must be recorded in the articles of association, as well as the right of recovery so that the contributor can take advantage of it | Possible: Must be indicated in the articles of association, appointment of an auditor in charge of the assessment is not compulsory |
NET PROFIT TAXATION | Associations which make profits, with for-profit purposes, are subject to corporation tax at the standard rate Non-profit associations benefit from a reduced corporate tax rate on their only income from assets Non-profit associations whose revenues ancillary sales do not exceed € 60,000 per year, are tax exempt | The company is not taxable Each partner is taxed on his share of profits for income tax (in the category of property incomes) The company can however opt for corporate tax |
EXECUTIVES COMPENSATION TAX REGIME | Tax regime of salaries and wages if remuneration is paid. | The manager can only be an employee if he is not a partner. In the event that the associate manager receives remuneration, this is not deductible from the profit of the SCI. |
SOCIAL SCHEME FOR MANAGERS | Managers are assimilated-employees under certain conditions | Non-partner managers are assimilated-employee |
SOCIAL REGIME FOR PARTNERS | No working contract possible for members | N/A |
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