Sole proprietor: separate business and personal assets

Since May 15, 2022, the assets of a sole proprietor (EI) are separated into two categories: business assets and personal assets. This separation is automatic and requires no action on the part of the business owner. Business creditors can only claim payment from the business assets. The primary residence is automatically protected, but only the habitable portion. This protection has limitations: fraud, serious and repeated tax or social security violations, waiver of rights, personal debts, and assets that are not strictly separate.

This page addresses the separation of assets within a sole proprietorship (EI) based on four pages from service-public.fr, accessed on October 17, 2026. The dates of their verification by service-public.fr are indicated at the end of the page. It does not cover the full text of the relevant articles of the French Commercial Code, the specific taxes covered by tax exemptions, the treatment of life insurance policies in relation to business creditors, the situation of non-residents, or notary fees. Social security coverage for sole proprietorships is addressed on a separate page.

What the rule says

The status of sole proprietor allows you to operate a business in your own name, without creating a company. The business activity can be commercial, artisanal, agricultural, or professional. The same applies to micro-entrepreneurs: their personal and business assets are automatically separated.

For an entrepreneur already in business before May 15, 2022, the separation only takes effect from that date.

The main residence

Automatic protection, limited to the habitable area

The primary residence is automatically protected upon the creation of the sole proprietorship. No action is required with a notary to benefit from this protection.

Only the habitable part of the home is protected. The part used for professional activities (office, storage, workshop, for example) is not protected and can be seized.

Prove that this is indeed your home

A business owner contesting a seizure must prove that the property in question is their primary residence and that they live there. The service-public.fr website adds, in this context, that a secondary residence is not protected and can be seized. For other types of real estate, see the section "Protecting Other Real Estate.".

Selling and buying back

If you sell your primary residence, the proceeds remain protected when reinvested in the purchase of a new primary residence. The purchase must take place within one year of the sale.

If the activity stops

After cessation of activity, including in judicial liquidation, professional creditors cannot force the entrepreneur to sell his main residence.

The limits of protection

The page "Sole Proprietorship (EI): what you need to know" clarifies this: the separation protects personal assets from potential business debts, with a limit in case of failure to meet tax or social obligations.

When the main residence can be seized

• When the debt is personal. The example on the page is that of a bank loan taken out to buy the main residence: the bank can then request its seizure.
• For the benefit of the tax authorities, In cases of fraudulent activity or failure to comply with tax obligations, the page on the separation of assets specifies the cases: fraudulent activity, serious and repeated failure to comply with tax obligations.
• If personal and professional debts are not strictly separate. A so-called bi-patrimonial procedure then deals with both estates, and the liquidator can request the sale of the residence for personal creditors.

Tax and social exceptions

According to the page on the separation of assets:

• The tax authorities The tax authorities can seize all of an entrepreneur's assets, both personal and professional, for income tax and property tax on assets used for business purposes. They can also seize personal assets in two cases: fraudulent activities, and serious and repeated failures to comply with tax obligations.
• Social security organizations They can seize all assets, both professional and personal, for social security contributions, such as the CSG (General Social Contribution). These rules also apply to micro-entrepreneurs. They can also seize personal assets in cases of fraud or serious and repeated violations. For serious and repeated violations, the threshold is set at over €1,000, and the following conditions apply.

The pages on service-public.fr are constantly evolving. Check the details of the cases and thresholds that apply to your situation on the relevant page before making a decision.

Protect another property

Your primary residence is automatically protected. To protect personal real estate other than your primary residence, such as a secondary residence, the page on separating assets indicates that you must contact a notary to have them draw up a declaration of unseizability (notarized deed, then published). The declared property is only unseizable for professional debts incurred after the publication of the declaration. Debts already incurred remain outside its scope.

Renouncing protection

The page describes two cases of waiver: using an asset of personal property as security for a business debt, or signing a waiver at the request of a business creditor. The page indicates a 7-day reflection period. A handwritten note in the document can reduce this to 3 full days.

To waive the protection of the main residence from seizure, the entrepreneur signs a deed before a notary. He declares it within one month at the business formalities counter.

The exact scope of a waiver is read in the document itself, before it is signed.

Other consequences to be aware of

• No guarantee of his own debts. Separation prevents a sole proprietor from personally guaranteeing their business. The page suggests using a relative as a guarantor or a mutual guarantee company.
• Judicial liquidation. When personal and business debts are clearly separate, the liquidation process focuses on the business liabilities, while the debt mediation commission handles the personal liabilities, with the business owner's agreement. If they are not strictly separate, the procedure addresses both assets.
• Mismanagement. In the event of mismanagement that has aggravated liabilities (the page cites a late declaration of cessation of payments), the court may order the entrepreneur to repay part of his debts from his personal assets.
• Cessation of activity or death. The two estates are then combined. In the event of insolvency upon death, only the business assets are subject to the collective procedure.
• Option for corporate tax. Sole proprietorships are generally subject to income tax. Opting for corporate income tax results in the cessation of tax liability for the sole proprietorship.

Numerical example (fictitious profile)

Situation. Marc is a self-employed plumber. His business assets (equipment, utility vehicle, inventory, accounts receivable) are worth €60,000. His business debts amount to €140,000. He lives in a 100 m² house worth €400,000, of which 15 m² are used for his business (office and storage).

Assumptions of the example (These provisions are not based on law): personal and professional debts are clearly separate; Marc has not signed any waiver; no serious tax or social security violations are involved; the value of the home is allocated proportionally to its surface area (€4,000 per m²); the 15 m² portion reserved for business activities, which is not protected, can be seized for professional debts. The pages consulted do not detail either the valuation or the procedures for seizing this portion.

Issue. How far can his business creditors go?

Strategy. Apply the rule: business creditors demand payment from business assets. The part of the home used for business is not protected, but the living quarters are.

Result.

In this case, the habitable portion of Marc's home is not subject to the remaining €20,000. If an exception were to apply (fraud, serious misconduct, waiver, or non-separate assets), the outcome would change. This scenario is hypothetical. The figures illustrate the rule. They do not prejudge your situation.

What changes depending on your situation

• Your business start date : before or after May 15, 2022.
• The use of your home : a section reserved for the activity is not protected.
• The nature of the debt : professional, personal or mixed.
• Your tax and social security situation : repeated delays in payment or reporting.
• The commitments already signed : waiver of a creditor, personal property pledged as security for a professional debt, notarial deed.
• Your other real estate assets : secondary residence, rental property.

The rule depends on your situation. No results are guaranteed.