5. Business Structures in France

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

5.3. Sole Trader in France – Entreprise Unipersonelle à Responsibilité Limitée (EURL)

An 'EURL' is a limited company in single ownership.

Under an EURL the business is wholly owned by the sole trader and managed through a separate limited company.

The company can be established with as little capital as €1 and the owner is, thereafter, afforded limited liability from debts to the amount of the initial capital.

Capital can be entered by way of cash or assets and for a small business there is no need for an independent valuation of assets entered as capital.

In relation to taxation, an EURL can choose whether to be taxed through the personal income tax system (so no distinction between profits of business and income of owner), or to pay company tax on profits. If the latter, your salary is a deductible expense from company profits. You can also choose to have some of your remuneration paid as dividends, which has some important fiscal advantages, as will be seen later.

Whichever basis on which you choose to be taxed, the basis on which you will pay social security contributions will be as a self-employed person under the régime des non salariés (TNS).

The company is obliged to appoint a gérant who has formal legal responsibility for the running of the company. In effect, it is the managing director, although they have what may be regarded as traditional company secretary responsibilities. The person is normally the business owner but it may also be a third party.

If you employ a third party as the gérant then they are considered to be a salaried employee, and both employer and employee social contributions are payable.

It is possible to engage someone in a non salaried basis as gérant non rémunéréé, in which case minimal social security contributions are payable by (or on behalf of) the gérant. This can be a family member, provided it is not your spouse.

The French Government have provided a model set of Articles that could be used by anyone proposing to set up an EURL, although we would recommend you took professional advice on it before you adopted it automatically.