Transitioning from micro-enterprise to company: when to consider it in 2026

Exceeding the thresholds for the micro-enterprise tax regime does not require you to create a company. After two consecutive years of exceeding the thresholds, you will automatically switch to the standard tax regime. Forming a company is a choice, justified by specific reasons: bringing in partners, separating your personal income tax from that of the business, changing your legal status, or preparing for the transfer of ownership.

This page presents the signals and procedures described by Service-Public (pages verified between February and October 2026). It does not cover: the official procedure specific to micro-entrepreneurs, as the company conversion guides clearly state that they do not apply to them; VAT; or a numerical comparison of social security contributions for a micro-entrepreneur and a company director, as no director contribution rates are included here. For these points, the applicable rule depends on your situation and should be verified before making a decision.

First indicator: revenue thresholds

The micro-enterprise tax regime applies as long as turnover excluding VAT remains below the thresholds. Here are the 2026 figures published by Service-Public, along with the applicable rates for each activity.

For liberal professions, the threshold sheet indicates €83,600 for liberal activity (BNC) without distinguishing the Cipav.

Micro-social security contributions are calculated on the actual revenue received, not invoiced revenue. The standard micro-tax allowance cannot be less than €305. Furnished tourist accommodations have their own thresholds (€83,600 for a classified furnished property, €15,000 for an unclassified one) and their own rates: these are not detailed here. For mixed activities, an overall threshold and a threshold specific to each activity apply.

This triggers the exit

A single instance of exceeding the threshold does not result in being removed from the scheme. Eligibility is lost after exceeding the threshold for two consecutive years, with effect from January 1st of the year following the second year. In the event of two instances of exceeding the threshold, the micro-entrepreneur information sheet on the Service-Public website indicates that you will be switched to a standard or simplified tax regime.

The exit has three consequences:

• The micro-social regime has ended, replaced by the social regime for individual entrepreneurs, which varies according to the activity; ;
• end of the micro-tax regime, replaced by a real regime for taxing profits; ;
• additional accounting obligations.

You can also opt for the actual regime without exceeding the thresholds: the option is made in writing, dated and signed, addressed to the business tax service.

Exceeding the thresholds triggers a shift into a real economy. Society is one possible outcome, not the automatic one.

What a company changes from the outset

These costs are those displayed by Service-Public on 10/04/2026. Registering a sole proprietorship costs €21.74.

Reasons to consider society

Service-Public mentions the following reasons in its information sheet on the transition of a sole proprietor to a company.

• Welcoming partners. Becoming a company allows for the inclusion of other partners or shareholders.
• Distinguish between personal taxation and corporate taxation. Service-Public indicates that the choice of IS allows them to be distinguished.
• To change social status. The majority shareholder of a limited liability company (SARL) is a self-employed worker. The president of a simplified joint-stock company (SAS) is considered an employee-like manager and falls under the general social security scheme. An employee-like manager who loses their position as a company officer is not eligible for unemployment benefits, except in cases where they hold a concurrent employment contract.
• Prepare for transmission. Upon the death of the operator, the sole proprietorship reverts to joint ownership. Registration fees on the transfer of shares are 0.1 % of the transfer price in SAS, SASU, SA and SCA companies, and 3 % of the transfer price after a deduction of €23,000 in EURL, SARL and SNC companies.
• Legal basis: liability. In a company, the risk to partners is limited to the amount of their contributions, according to the Service-Public fact sheet, which concludes that a company "can therefore prove more advantageous" in this respect. The fact sheet specifies that, since May 15, 2022, the personal and professional assets of sole proprietors are separate. It adds that a sole proprietor can waive this protection at the request of one of their creditors, and that a bank can request it before granting a loan.

The legal form chosen can be changed during the life of the company, according to Service-Public.

Regarding the separation of assets, the micro-entrepreneur information sheet states that it "protects your personal assets from any business debts." It also indicates that the tax authorities or social security organizations can recover their debts from both your personal and business assets. The extent of this protection therefore depends on your specific situation, which should be verified before making a decision.

The two paths described by Service-Public

Please note: the Service-Public fact sheets describing these two options include the warning "This page does not apply to micro-entrepreneurs." They are presented here for sole proprietors in general; their application to micro-entrepreneurs should be verified.

For sole proprietors, Service-Public describes two ways to transform the business into a company:

1. The contribution. The entrepreneur contributes their business assets to the company they are creating. Universal transfer of business assets (TUPP) is the default arrangement. If the entrepreneur is married under the regime of community property acquired after marriage, they must obtain their spouse's consent to contribute the business or premises.
2. The transfer. The entrepreneur sells their business, or all of their professional assets, to the company. The company can borrow money to pay the price. Service-Public specifies that this arrangement is only feasible if the business is sufficiently profitable.

Capital gains from a contribution are covered on a dedicated page.

A limit to be aware of

Both of these fact sheets bear the warning: "The page you are viewing does not concern micro-entrepreneurs." The micro-entrepreneur fact sheet, however, discusses the transfer of a business "to a third party (a company, for example)" and refers to the fact sheet on capital contributions. The two pages do not overlap, and neither fact sheet describes the procedure specific to micro-entrepreneurs. Service-Public advises seeking guidance from a professional (lawyer, accountant). The Business Advisors service will call back free of charge within 5 days.

The option for corporate income tax without creating a company

Without incorporating, a sole proprietor can opt for tax treatment similar to that of a single-member limited liability company (EURL). This option is available to entrepreneurs subject to the standard tax regime. The French government's economic development agency website, economie.gouv.fr, lists micro-enterprises among those that cannot opt for corporate income tax (IS). A dedicated page addresses this topic.

Numerical example (fictitious profile)

Situation. Camille operates a freelance business as a micro-enterprise. Her revenue was €91,000 in year N and €96,000 in year N+1. Assumptions of the hypothetical profile: the threshold of €83,600 is the same in both years, and the 2026 rates from this document (25.6% of micro-social contributions, 34% of the allowance) are applied to year N+1.

Issue. On what date does the micro-enterprise regime end, and what does it lose on that date?

Strategy. Apply the Public Service rule: two consecutive years of exceeding the threshold, exit on January 1st of the year following the second year. Then measure what is lost: the micro-social security contribution and the micro-tax allowance. The comparison with a company is not quantified on this page: no manager contribution rate has been used.

Result.

Camille exits the micro-enterprise tax regime on January 1st of year N+2. The micro-social security contributions and the standard allowance, calculated above for year N+1, no longer apply from this date: they are replaced by the social security regime for sole traders and by a standard tax regime. The choice between remaining a sole trader under the standard regime and creating a company still needs to be determined based on her actual figures.

This profile is fictitious. The figures illustrate the mechanism and do not predict your situation.

What changes depending on your situation

• The nature of the activity : it sets the threshold, the micro-social rate and the allowance.
• The level of turnover over two years, and not on just one.
• Your marital status : the contribution may require the agreement of the spouse depending on the matrimonial property regime.
• Your project : partners to be welcomed, future sale, transfer.
• Your desired social status : self-employed worker or manager treated as an employee.

No results are guaranteed. The rule depends on your situation and must be examined on a case-by-case basis.