FRANCE is renowned for its layers of bureaucracy and registering your business is one layer that has to be dealt with before you start up.
FRANCE is renowned for its layers of bureaucracy and registering your business is one layer that has to be dealt with before you start up.
The different business types have advantages and disadvantages and planning ahead pays dividends, as does having all your documentation to hand and photocopied ready for the registration process.
Registration is straight-forward once you have decided which type of business you will be running.
The three main business classes are commerçiale, artisanal or liberal, and each has its own registration body which contains the Centre de Formalités des Entreprises.
If you want to run a shop or a commercial business – essentially buying something to resell to someone else – then you should register at the CFE in the Chambre de Commerce et d’Industrie.
If you have a trade, you should register with the Chambre de Métiers et de l’Artisan. Trades are divided up into foods, building, textiles and services (such as a mechanic). An artisanal start-up should not have more than 10 employees.
The final grouping of liberal professions is covered through Urssaf (Union de Recouvrement des cotisations de Sécurité Sociale et d’Allocations Familiales).
This regime is itself split into two, with regulated professions, professions libérales dites “réglementées” – which are defined by law as the likes of lawyers, doctors, nurses and accountants who have to abide by professional codes – and the non-regulated professions, which is a catch-all grouping for anyone not covered by the previous lists (other than farmers).
Artists and journalists, archaeologists and film-makers, wine tasters and mediums are all covered by this regime.
No complete legal list of jobs exists, but the APCE agency and the Chambre Nationale des Professions Libérales can be a help in deciding. Your business should fit into one of these categories, but if you have doubts contact the chambre de commerce or the chambre de métiers for guidance.
APCE can also guide you through setting up your business and you can buy files of useful information for the bulk of business types.
When you have completed your registration, the CFE will pass your details round the system, which includes the national statistical body, Insee, which assigns your Siren, Siret and Ape (now being called Naf) number, the tax authorities and the social security authorities.
While deciding on what regime a business should fall under, there is also a decision on the scale of the operation: whether it will be run as a sole trader/self-employed person (entrepreneur individuel) or as a company and what type.
The EI has the advantage of easy set-up and great freedom of action, including the possibility of employing staff. Social charges are levied as a travailleur non-salarié (TNS) and you pay income tax rather than a business tax, as the business and the person are essentially the same thing.
However, this also means unlimited liabilities, which could cost you your home.
It is possible to limit your exposure by getting a notaire to draw up a déclaration d’insaisissabilité with regard to your non-business assets or by setting up a Entreprise Unipersonnelle à Responsabil-ité Limitée, which is essentially a one-person company that limits your liabilities to the capital investment (which can be as little as €1).
Now, however, a new entity called the Entrepreneur Individuel à Responsabilité Limitée has been set up to give the self-employed more protection. In effect you are creating a new entity: the business, separate from yourself.
Any sole trader, whether commercial, artisan or liberal profession, will be able to set up as an EIRL and make a declaration of what property is linked to the business, thus protecting family assets.
Similarly to the EI, you can decide to stay with the income tax system or opt to pay company tax on the profits. You are also in the same TNS regime for social charges.
The EIRL is the first level of distinct business; the next step is the private limited company, Société à Responsabilité Limitée (SARL), which has more than one owner.
SARLs have a minimum of two employees and a maximum of 100 and, like the EIRL, can be started with a capital investment of just €1.
They are liable to company tax, Impôts sur les Societés, although companies less than five years old can opt for Impôt sur le Revenu, personal income tax.
