That’s it, have you decided to start as a craftsman on your own account? A great adventure awaits you! But before you start taking orders and sending quotes, you need to choose and declare your legal status as a craftsman. Depending on your activity and how you will carry it out, you can choose a legal status that is advantageous for you. The goal is to control the cost of your social contributions, your turnover, the possibility of opening capital… So many different criteria depending on the statuses that are discussed! If you don’t know which one to choose, follow our guide instead. You will then know how to choose the best legal status for a craftsman.
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Different types of legal status for craftsmen
Let’s start by listing the choices available to you. By the end of the article, you will know which legal form is best suited for your activity.
- Self-employed or micro-enterprise
- EIRL: Sole proprietorship with limited liability
- EURL: Sole proprietorship with limited liability
- SASU: Simplified joint-stock company
- SA: Public limited company
- SAS: Simplified joint-stock company
- SNC: General partnership
- SARL: Limited liability company
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Désplash Choose your legal status as a craftsman based on the number of partners
To start guiding your choice, you need to ask yourself about the number of partners. Depending on the legal status you choose, you won’t be able to do as you wish later on.
If you do not intend to have a partner
Are you still working solo? Then don’t ask yourself any more questions, you have the choice between the status of independent craftsman and the EIRL status. These two statuses do not allow for the retrospective addition of a partner, so think carefully about it. Otherwise, transforming a sole proprietorship into a company will be possible through a costly procedure. So, what to choose for a craftsman, a sole proprietorship (EIRL) or an independent entrepreneur?
The independent entrepreneur status was established to facilitate the process and help entrepreneurs start their business. Their tax regime is quite reduced and they have no accounting obligation. However, their turnover is limited and their personal assets are at risk.
Independent entrepreneur vs sole proprietorship
| Self-employed | EIRL | |
| Partner(s) | No | No |
| Limited turnover | Yes* | No |
| Liability | Limited | Limited |
| Mandatory accounting | No | Yes |
| Capital required at creation | €0 | €0 |
| Creation cost | €0 | €0 |
Notable differences between the Self-Employed and EIRL statuses *€170,000 per year for business and hosting activities (deductible VAT €82,800), €70,000 per year for services (VAT €33,200); cumulative.
Before the PACT law of 2019, craftsmen in sole proprietorship had to declare, upon creating their business, the assets constituting their professional assets to serve as a reference in case of debt. Now, this is no longer a requirement; you can create an EIRL with a zero amount. This new feature makes the EIRL status more attractive for craftsmen. Indeed, it is possible for an EIRL to benefit from the self-employment tax regime, and vice versa. That is to say, under certain conditions, you can reduce the amount of your social security taxes as an EIRL, just as you can protect your assets by remaining a self-employed entrepreneur.
Example: if you are an independent carpenter, and you will need a stock of materials (wood), provided that you comply with the tax regime for self-employed businesses. On the other hand, if you have very few expenses in your business as a craftsman, the EIRL will not be attractive for you.
We recommend these individual statuses more to craftsmen who want to safely try their hand at entrepreneurship.
You do not dismiss the idea of having a partner in the future
If you are solely responsible for your business but wish to remain open to future partners, prefer to create an EURL or a SASU. These statuses are more suited to the evolution of activities. They require more investment and capital at creation (with no minimum), but personal and professional assets are very distinct. Indeed, the EURL status was created in response to the LLC, which did not allow for a single partner. Similarly, the SASU corresponds to the SAS in a single associated version. It should be remembered that both laws allow for future association, and that liability is limited to each partner’s contributions. The main difference lies in the status of executives, their remuneration, their contributions, and their social protection:
EURL vs SASU
| EURL | SASU | |
| Spouse collaborator | Yes | No |
| Responsible for social contributions | 45% | 70% |
| Social protection | Minimum | Advantageous |
| Administrative management | Simple | Mandatory payroll |
Differences between EURL and SASU management For most craftsmen, the EURL is sufficient. The number of partners can change, and regarding the rest, nothing will change. The SASU is preferable instead for projects aimed at ultimately investing financial partners. It will therefore concern fewer craftsmen.
Illustration: Désplash You are two partners or more
In this case, you would rather create a company. You would then turn to SA, SAS, SARL, SNC… Either from the start or after some time spent in EURL or SASU.
The SNC has no notion of capital unlike the others. The liability of the partners is indefinite and joint on their personal assets. All partners have the status of merchant, which does not necessarily interest the majority of craftsmen.
On the other hand, the SA will require a minimum capital of €37,000, with at least 7 partners. It can be interesting for craft cooperatives. Its main advantage is to protect each partner, on the pretext of employing an auditor. Only the president is then treated as an employee.
LLC is often favored when two craftsmen are from the same family; but it can contain many more partners (up to 100).
Partners in SA and SARL are employees if an employment contract is concluded.
The SAS will be the most flexible status for craftsmen. It is a compromise between the SA and the LLC. The number of partners is then infinite.
Outside of the SNC, for all these statuses, the liability of the partners is limited to their contribution to the capital.
SA vs SARL vs SAS vs SNC
| SA | SARL | SAS | SNC | |
| Number of members | 7 and up | 2 and up | 2 and up | 2 and up |
| Social regime of | employees in case of linked contract | No | Yes | No |
| Equal president | employee | majority manager | non-salaried minority | equal |
| Corporate tax | Yes | Yes | Yes | No |
| on income if the family business | Yes | No |
Differences between the various company laws
Tag: What is an EURL