You've just decided to take the plunge, or you're still hesitating between several options. Before you: a list of acronyms, EI, microbusinessEURL, SARL, SASU, SAS. Each promises advantages, each hides constraints. This choice isn't simply a matter of ticking a box on a form: it determines your personal taxes, your social security coverage, the protection of your assets, and your ability to grow your business. This guide gives you the keys to making a methodical decision, without unnecessary jargon.
Legal status: definition and implications of the choice
The legal status, or legal form, is the legal framework within which your business will exist and operate. It determines who you are in the eyes of the law: a sole proprietor operating in their own name, or a company with a legal personality separate from yours.
This framework is not insignificant. It sets the rules of the game on four essential levels.
Financial responsibility. Are you personally at risk if your business accumulates debt? For sole proprietorships, your business assets are now separate from your personal assets since the law of February 14, 2022. For limited liability companies (SARL, SAS, EURL, SASU), your liability is limited to the amount of your contributions to the share capital.
Taxation. Will your profits be subject to income tax (IR), directly in your personal tax return, or to corporation tax (IS), at the company level? This choice has a direct impact on your net disposable income.
The social security system. Will you be a self-employed worker (TNS), affiliated with the Social Security for the Self-Employed, or an employee-like worker, attached to the general scheme? Contributions, health coverage, retirement and supplementary benefits vary considerably from one scheme to another.
Formalities and governance. Some forms are almost immediate to create (the micro-enterprise can be declared in a few clicks), others require the drafting of articles of association, the publication of a legal notice and the filing of a file with the registry.
The stakes are real: in 2024, 1,111,200 businesses were created in France, a record level according to theINSEEThis represents a 6% increase compared to 2023. Of these, 716,200 were micro-enterprises and 284,600 were companies. In other words, the question of legal status arises for hundreds of thousands of entrepreneurs each year, with the answers varying depending on the project.
Sole proprietorship and micro-enterprise: simplicity
A sole proprietorship (EI) is the most straightforward way to run a business in your own name. No capital to raise, no articles of association to draft, no partners. You are the business. Since the 2022 law in favor of the self-employed, your personal assets are automatically protected: only your business assets are liable for business debts.
The micro-enterprise is a simplified variant of the sole proprietorship (EI). It is not a separate legal form: it is a simplified tax and social security regime, accessible to sole proprietorships whose turnover remains below certain thresholds. Since January 1, 2026, these thresholds have been revised by the administration (Public Service Entrepreneurship:
These caps apply to the years 2026, 2027, and 2028. Note: the thresholds in effect until 2025 were €188,700 for sales and €77,700 for services. If you are reading older comparisons, please verify the figures.
The advantages of a micro-enterprise are real:
The limitations are just as real:
Who is the game for? A micro-enterprise is ideal for testing a business idea, supplementing salaried income, or running a business with low overhead and low investment. It becomes less suitable as soon as your turnover increases, your expenses become high, or you want to take on a partner.
EURL and SARL: the secure framework
The SARL (Société à Responsabilité Limitée, or Limited Liability Company) is the most common type of company in France for very small businesses (TPEs) and small and medium-sized enterprises (SMEs). It brings together between 2 and 100 partners, whose liability is limited to the amount of their contributions. Its operation is governed by the French Commercial Code (articles L.223-1 to L.223-43), which provides a predictable and secure framework.
EURL (Entreprise Unipersonnelle à Responsabilité Limitée - EURL) is simply the single-member version of the SARL: one shareholder, all the rules of the SARL. If a new shareholder joins the capital, the EURL automatically becomes an SARL.
The social security status of the manager
The manager majority (who holds more than 50% of the shares) falls under the self-employed workers' scheme. His contributions represent approximately 40 to 45% of his net remuneration, according to data from the URSSAFThis scheme is less expensive than the general scheme, but the retirement and insurance coverage is less extensive. Minimum contributions remain due even if there is no income.
The manager minority or egalitarian is treated as an employee, attached to the general scheme, with social protection close to that of an executive.
Taxation
The SARL (limited liability company) is subject to corporation tax (IS) by default. The standard rate is 25%. SMEs with a turnover of less than €10 million and at least 75% of their capital held by individuals benefit from a reduced rate. 15% on the first €42,500 of profit.
An option for income tax (IR) is available for the first 5 years, subject to certain conditions. A family-owned limited liability company (SARL de famille), however, can opt for income tax indefinitely.
The EURL, when the sole member is a natural person, is subject to IR by default, with an irrevocable option for IS.
The dividends
Note: Dividends paid to the majority shareholder of a SARL or EURL are subject to self-employed social security contributions for the portion exceeding 10% of the share capital, share premiums, and shareholder current account balances. The portion below this threshold is subject to a flat tax of 30%.
Who is the game for?
The SARL (limited liability company) is suitable for family projects, craft businesses, and small-scale activities where a structured legal framework provides reassurance to partners. The EURL (single-member limited liability company) is appropriate for a sole entrepreneur who wants a structure separate from themselves, with limited liability and income tax at startup.
SASU and SAS: flexibility
The SAS (Simplified Joint-Stock Company) has become the preferred structure for ambitious entrepreneurs. In 2024, the creation of SAS and SASU companies increased by +10% compared to 2023, according Bpifrance CreationIts distinctive feature: almost total statutory freedom. The partners themselves define the governance rules, the powers of the manager, the decision-making procedures and the transfer clauses.
SASU (Simplified Joint-Stock Company with a Single Shareholder) is the version with a single shareholder. If a new shareholder joins, the SASU becomes a SAS without cumbersome formalities.
The president's social security system
The president of SAS or SASU is assimilated employee If he is paid, he contributes to the general social security system, with health insurance, basic and supplementary pension coverage, and benefits aligned with those of managers. Contributions represent approximately 65 to 80% of net salary in gross equivalent terms.
Key point: a president of a SASU unpaid pays no minimum social security contributions. This is a decisive advantage for a creator who does not plan to pay themselves a salary at the start, especially if they are still receiving unemployment benefits (ARE).
Taxation
SAS and SASU companies are subject to corporate income tax by default, with the same reduced rate of 15% on the first €42,500 of profits for eligible SMEs. An option for personal income tax is available for a maximum of 5 years.
Dividends: a net advantage
Dividends paid to the president-shareholder of a SAS or SASU are not not subject to social security contributionsThey are only subject to the flat tax rate of 30% (or the progressive income tax scale by option, with a 40% allowance). This is a major difference compared to a limited liability company (SARL) for managers who wish to optimize their remuneration through dividends.
Fundraising and capital instruments
The SAS (simplified joint-stock company) is the only legal structure compatible with modern financing mechanisms: preferred shares, BSPCE (Business Founder's Share Subscription Warrants), BSA (limited liability warrants), and sophisticated shareholder agreements. Investment funds and business angels almost always require an SAS structure before acquiring a stake in the company.
Who is the game for?
The SASU (Simplified Joint-Stock Company with a Single Shareholder) is suitable for freelancers, consultants, and solo entrepreneurs who want social security coverage similar to that of salaried employees, or who receive unemployment benefits (ARE). The SAS (Simplified Joint-Stock Company) is the preferred structure for projects with multiple partners, startups, and companies planning fundraising or rapid growth.
Comparative table: taxation, social security, liability, formalities
| Criterion | Microbusiness | classical EI | EURL | SARL | SASU | SAS |
|---|---|---|---|---|---|---|
| Number of partners | 1 | 1 | 1 | 2 to 100 | 1 | 2 or more |
| minimum capital | No | No | 1 € | 1 € | 1 € | 1 € |
| Responsability | separate professional assets | separate professional assets | Limited to contributions | Limited to contributions | Limited to contributions | Limited to contributions |
| Executive social security scheme | TNS (micro-social) | TNS | TNS | Self-employed (majority manager) or equivalent employee | Assimilated employee | Assimilated employee |
| Default taxation | IR (micro-fiscal) | IR | IR (IS option) | IS (5-year IR option) | IS (5-year IR option) | IS (5-year IR option) |
| Dividends subject to contributions | N/A | N/A | Yes (share > 10% of capital) | Yes (share > 10% of capital) | No | No |
| Revenue ceiling | €28,150 / €19,250 | No | No | No | No | No |
| Creation formalities | Very simple | Simple | Medium | Medium | Medium | Complex averages |
| Fundraising | Impossible | Impossible | Impossible | Difficult | Possible | Ideal |
| Ideal for | Test activity, low loads | Craftsman, solo trader | Solo with structure | Family-owned SME, craftsmanship | Freelance, solo consultant | Startup, growth, investors |
The 5 questions to ask yourself before choosing
Before signing anything, ask yourself these five questions. Your answers will naturally determine the status that suits you best.
1. Will you be alone or with partners?
If you are a sole proprietor, your options are: micro-enterprise, sole proprietorship, single-member limited liability company (EURL), or simplified joint-stock company (SASU). If there are several of you from the outset, you will need a multi-member company: limited liability company (SARL) or simplified joint-stock company (SAS). This criterion immediately eliminates half of the options.
2. What revenue are you forecasting?
A projected turnover of less than €83,600 in services (or €203,100 in sales) with low overhead costs: a micro-enterprise may suffice. Above this threshold, or if your actual expenses are high, a company structure allows you to deduct them and optimize your tax liability.
3. What kind of social protection do you want?
The self-employed (TNS) scheme (sole proprietorship, single-member limited liability company, majority shareholder of a limited liability company) is less expensive but offers more limited retirement and insurance coverage. The employee-like scheme (simplified joint-stock company, simplified joint-stock company, minority shareholder of a limited liability company) is more protective but more expensive in terms of contributions. Retirement planning deserves careful consideration from the outset.
4. Do you need to protect your personal assets?
Since 2022, sole proprietorships (EI) already protect your personal assets. However, if your business involves significant financial risks, a limited liability company (SARL) strengthens this protection, provided you do not personally guarantee the loans to banks.
5. Are you considering raising funds or a future sale?
If so, the SAS or SASU are the only truly suitable structures. They allow for preferred shares, BSPCEs (free share warrants), and sophisticated shareholder agreements. Transferring shares in an SAS incurs only 0,1% registration fees, compared to 3% (after allowances) for SARL shares. On a €500,000 transfer, the difference is €500 versus over €14,000.
Changing your status mid-process: it's possible
Your initial status is not permanent. A business evolves: revenue increases, a partner joins the venture, an investor comes knocking. It is entirely possible to change your legal structure, but this operation has costs and consequences that must be anticipated.
The most frequent transformations
From micro-enterprise to company. This is the most common route. When your turnover exceeds the limits, or if you wish to partner with someone and deduct your actual expenses, you can create an EURL (single-member limited liability company) or a SASU (simplified joint-stock company with a single shareholder). Note: this is not a transformation per se, but the creation of a new entity. Your micro-enterprise is deregistered, and your company is registered.
From SARL to SAS. This transformation is common, particularly to prepare for fundraising or to improve the executive's social status. It requires a vote at the [legal meeting/organization].unanimity The shareholders' meeting at an extraordinary general meeting, the drafting of new articles of association, the appointment of a transformation auditor (unless the company already has an auditor), and the publication of a legal notice. The overall cost observed in 2026 is between €35,000 and €45,000 excluding VATAccording to a specialized service, the good news is that the company retains its SIREN number, its current contracts, and its legal personality. No dissolution is necessary.
From EURL to SASU. This transformation is also possible and follows the same main steps. It is often considered to prepare for the entry of an investor.
What to anticipate
A change in status often entails a change in social security regime (from self-employed to salaried employee, for example), which can increase contributions by 15% to 30% depending on the circumstances. It can also trigger the immediate taxation of current profits and unrealized capital gains if the tax regime changes. These consequences should be assessed with an accountant before making a decision.
Mistakes to avoid
Choosing a legal status without considering the medium-term consequences is a mistake many entrepreneurs make. Here are the most common pitfalls.
Choose the SASU by default without simulating the EURL. The SASU (Simplified Joint-Stock Company with a Single Shareholder) is often presented as the ideal legal structure. It is in certain situations, particularly if you are receiving unemployment benefits (ARE) or if you want social security coverage similar to that of an employee. However, if you don't have unemployment benefits to protect and your marginal tax rate is high, the EURL (Single-Member Limited Liability Company) with the self-employed (TNS) tax regime can provide you with a higher net income. Run simulations of both options with detailed figures before making a decision.
Set a share capital of €1. This is legally possible for all companies. It also sends a negative signal to banks and the tax authorities. Capital of €1,000 to €10,000 for a service-based business, or €10,000 to €50,000 for a capital-based business, strengthens your credibility and facilitates access to credit.
Choosing a limited liability company (SARL) for a project that aims to raise funds. The SARL (limited liability company) is unsuitable for projects that plan to attract institutional investors or business angels. These entities almost always require a SAS (simplified joint-stock company). Converting an SARL into an SAS is possible, but costly and time-consuming. It's best to start off on the right foot.
Underestimating the costs of the employee-like scheme. The president of a simplified joint-stock company (SASU) receives a salary and pays high social security contributions (approximately 65% to 80% of net pay, including all taxes and social security contributions). Some business founders are surprised to find that their net income is significantly lower than they anticipated. Calculate your net income before setting your salary.
Do not anticipate the change in status. Remaining a micro-enterprise beyond the revenue thresholds, or an EURL (single-member limited liability company) when your business activity requires a SAS (simplified joint-stock company), costs time and money. Plan from the outset for the conditions that will lead you to evolve, and consult a chartered accountant or a specialized lawyer to avoid being caught off guard.
Drafting articles of association for a SARL or SAS without assistance. The articles of association define the rules governing the relationship between shareholders. Poorly drafted or missing clauses can paralyze decisions, create conflicts, or prevent an investor from joining. According to data from the French National Bar Council (Conseil National des Barreaux), 43% of disputes related to simplified joint-stock companies (SAS) concern issues of interpretation of the articles of association.
Djaboo: Manage your business from day one, regardless of your status
Regardless of the legal status you choose, the day-to-day management of your business begins with the first client: quotes, invoices, payment trackingCustomer relationship management, project management. Djaboo is an all-in-one tool designed for very small businesses and SMEs, allowing you to register a customer and send an invoice in less than 2 minutes, without any technical or accounting skills. Financial management, CRM, invoicing, agile project management: everything is centralized in a single workspace, for teams of 1 to 100 people and more.
FAQ: Your questions about legal status
What is the difference between a micro-enterprise and a sole proprietorship?
A micro-enterprise is a sole proprietorship benefiting from a simplified tax and social security system. It is not a separate legal structure. The difference lies in how social security contributions are calculated (proportional to turnover for micro-enterprises, based on actual profit for standard sole proprietorships) and in the tax regime (standard allowance for micro-enterprises, deduction of actual expenses for standard sole proprietorships). Beyond the turnover thresholds (€203,100 for sales, €83,600 for services in 2026), the micro-entrepreneur switches to the standard sole proprietorship tax regime. For more information, see [link to relevant page]. entreprendre.service-public.fr.
Can a company's legal status be changed after it has been created?
Yes. The most common transformations are switching from a micro-enterprise to a single-member limited liability company (EURL) or a simplified joint-stock company (SASU), and from a limited liability company (SARL) to a simplified joint-stock company (SAS). These operations have costs (legal, tax, and social security) and consequences that need to be anticipated. It's best to choose carefully from the outset, but if your situation changes, the transformation is possible without dissolving the company.
SASU or EURL: which one to choose when you are alone?
It depends on your situation. If you are receiving unemployment benefits (ARE) and don't want to draw a salary immediately, a SASU (Simplified Joint-Stock Company with a Single Shareholder) is advantageous: the unpaid president doesn't pay any minimum social security contributions. If you want to optimize your social security contributions and your marginal tax rate is high, an EURL (Single-Member Limited Liability Company) with the TNS (Non-Salaried Workers) tax regime may be more tax-efficient. Have a chartered accountant simulate both scenarios before making a decision.
Which status will allow me to pay the least amount of social security contributions?
With the same remuneration, the majority shareholder of an EURL or SARL (self-employed status) pays lower social security contributions (approximately 40 to 45% of net income) than the president of a SASU or SAS (similar to an employee, approximately 65 to 80% of net income in gross equivalent terms). However, social security coverage is more limited for the self-employed, particularly regarding retirement and supplementary benefits. The opposite is true for dividends: SAS and SASU companies do not pay any social security contributions on dividends, while EURL and SARL companies are subject to contributions on the portion exceeding 10% of the share capital.
