5. Business Structures in France

1. 5.1. Types of Business Structure
2. 5.2. Self-Employed
3. 5.3. Sole Trader
4. 5.4. Limited Company
5. 5.5. Status of Spouse

---

5.1. Types of Business Structure in France

It is not ordinarily necessary to establish a separate legal company structure to start and run a business in France.

As a general rule, you have the choice to either operate a business as a self-employed person, or to establish a limited company.

A self-employed business is called an Entreprise Individuelle, whilst the most common limited company structures have the acronyms EURL and SARL.

We can, therefore, summarise the three main business structures as follows:


Table: Business Structures in France

UK	France
Self-Employed	Entreprise Individuelle (EI)
Sole Trader	Entreprise Unipersonelle à Responsibilité Limitée (EURL)
Limited Company	Société à Responsibilité Limitée (SARL)

There are also a number of legal structures for public limited companies, partnerships, investment companies and certain professions libérales, e.g. SCP, SEL, SA, SAS, SNC, SCM! We shall not be considering these structures in these pages.

If you are proposing to rent out property then you may wish to establish a rather specialist type of property company called a Société Civile Immobiliiére. The SCI is mainly used for home purchase, but can also be used as a legal vehicle to let out unfurnished property.

Most people setting up a business in France do so on a self-employed basis. Whilst it is possible to later migrate to a limited company, there are fees and taxes associated with doing so, particularly if you are transferring business assets to the new company.

Otherwise, the costs of running a limited company (including accountancy fees) probably outweigh any benefits they may bring.

The type of legal structure you choose will have implications on your fiscal status.

Thus, depending on the choice you make, you will either be taxed through the personal income tax system, or through the system of company tax (or both!).

Similarly, you will pay social security contributions, either as a salaried employee, or as a self-employed person (or both!).

---

Next: Self-Employed

Back: Business Professions and Activities