5. Business Structures in France

1. 5.1. Types of Business Structure
2. 5.2. Sole Trader
3. 5.3. Limited Company
4. 5.4. 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 sole trader, or to establish a limited company.

A sole trader is called an Entreprise Individuelle, whilst the most common limited company structures have the acronyms EURL and SARL.

Since January 2011 it has also been possible to opt for the legal status of EIRL - Entreprise individuelle à responsabilité limitée, a status that grants a strong degree of limited liability, but without the need to establish a company.

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


Table: Business Structures in France

Structure	Abbreviation
Entreprise Individuelle	(EI)
Entreprise Individuelle à responsabilité limitée	(EIRL)
Entreprise Unipersonelle à Responsibilité Limitée	(EURL)
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 sole trader 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: Sole Trader Legal Status

Back: Business Professions and Activities