Hiring a spouse to help with business

One businessman in five has had help from his wife in setting up in business, but those who help in their partner’s business are breaking the law if they do not set up a legal working relationship that recognises their role in the business.

The law is aimed to get away from the “invisible” help a spouse gives – whether by regularly doing the books or dealing with work in French – which will count for nothing if the partners divorce or the business owner dies.

It is a way to protect a spouse who may have spent years helping to build up a business, but be left with no legal title and no right to a pension in his or her own right.

The law specifies three types of working relationships for married or pacsed couples to safeguard the rights of the spouse in the case of divorce or death.

Spouses must choose between conjoint collaborateur, conjoint salarié and conjoint associé: basically partner, employee and shareholder.

Each has different financial implications and improved rights to social benefits, including a pension.

About 85 per cent of conjoints collaborateurs are women. It is a simple act with few formalities and low costs that gives full social benefits.

It is open to spouses working with artisans and commercial traders, but only for married or pacsed couples – not those just living together – and only if the business principal is working in an entreprise individuelle, Eurl, Sarl, or as an auto-entrepreneur.

Concubins, people living together, can apply to their caisse RSI for an affiliation volontaire (voluntary link).

A conjoint collaborateur must play a regular and effective part in the business, be unpaid, have the agreement of the business principal and be registered at their Centre de formalité des entreprises (CFE).

If they have a paid outside job, it should be part-time and take up no more than 50 per cent of their time.

If they work more than this, they are presumed not to be playing a regular role in the business; however, if they still are, they should declare this and pay towards a pension entitlement which can be used in tax calculations.

Social charges are low and there are a range of different percentages that can be used to set the level of charges towards the pension entitlement. They can also buy extra pension entitlement.
Other benefits, such as sickness and maternity benefits, are free, because they come through the payments that the partner makes.

In the case of divorce, the status of conjoint collaborateur simply ceases, but she retains earned social benefits. If the business principal dies, the conjoint collaborateur can try to keep the business going, and may get a capital payment.

The title of conjoint salarié is open to all couples, married, pacsed or not, but depends on the strength of the company: whether it can afford the salary and social charges that go with the employment.
The spouse must work regularly in the business, have a written work contract, receive a salary and be responsible to the head of the firm (ie: does not have any control of the business).

They are liable to social charges on their own account; if the business fails, they are not liable for its debts, unless they are a guarantor.

In the case of death or divorce, the married and pacsed conjoint salarié gets her rights to the business, depending on their marriage regime or contract. A live-in partner has no rights to the business.

The final category is as a full partner or shareholder in the business as conjoint associé, but this can only be of a limited company.

The conjoint associé pays individual cotisations to the régime social des indépendants (RSI) and gets full social and pension benefits.