Choosing the legal structure of your business: liability, social security system, taxation

The choice of legal structure depends on several factors. Service-Public initially mentions the number of partners and the amount of share capital, then details six criteria for commercial and craft activities: the operating method (sole proprietorship or partnership), liability, management, setup costs, social security contributions, and profit taxation. If operating alone, you can choose between a sole proprietorship, a single-member limited liability company (EURL), and a simplified joint-stock company with a single shareholder (SASU). If operating with partners, you must create a company (SAS, SARL, SA, among others). The legal structure can be changed during the company's existence: the initial choice is not final.

This page follows the official guide "Choosing the legal structure of your business" (verified on 10/04/2026) and the individual guides for each legal structure. It covers commercial and craft activities. It does not detail regulated liberal professions (which have their own structures, such as professional practice companies), general partnerships (SNC), limited partnerships, or contribution rates.

Shapes in a table

A sole proprietorship has no share capital. The share capital is unrestricted for an EURL, SARL, SASU, and SAS (minimum €1 for an SASU, according to the SASU fact sheet). The remaining cash contributions must be paid up within 5 years of registration. The figure of €37,000 for an SA is the minimum share capital mentioned in the fact sheet.

Responsibility

In EURL, SARL, SASU, SAS, and SA companies, the liability of the partners is limited to the amount of their contributions. This limit has one exception, as the information sheets point out: the sole managing partner of an EURL can be held liable in the event of mismanagement.

In a sole proprietorship, personal and business assets are automatically separated. However, in the event of non-compliance with tax or social security obligations, the tax authorities and social security agencies can recover their debts from both assets. A sole proprietorship does not create a separate legal personality, and an individual cannot own multiple sole proprietorships.

The social security regime of the manager

Two systems coexist:

• TNS The sole proprietor, the majority managing partner of a SARL (more than 50% of the shares), the sole shareholder of an EURL. They are affiliated with the self-employed workers' scheme.
• Employee-like status : the president of SAS, SASU or SA, and the minority manager of SARL, who falls under the general scheme.

Two orders of magnitude are given in the fact sheets. For a sole trader, contributions represent approximately 45% of their business income. For a company director treated as an employee, social security contributions represent approximately 60% of their gross salary. The bases differ: these percentages are not comparable.

During the first two years of self-employment, the form indicates a flat-rate basis equal to 19 % of the annual social security ceiling, i.e. €9,131 in 2026.

Taxation of profits

Service-Public clarifies that corporate income tax can apply to all types of businesses, including sole proprietorships. The corporate income tax rate indicated in the SASU fact sheet is 25%, with a reduced rate of 15% for SMEs on the portion of profits up to €42,500.

For sole traders, the guide also provides the thresholds for the simplified actual tax regime in 2026 (2025 turnover): between €203,100 and €945,000 for the sale of goods, and between €83,600 and €286,000 for services. Above these thresholds, the standard actual tax regime applies.

The costs of creation

Setting up a sole proprietorship costs €21.74. A company costs €33.83 in registration fees at the business formalities office, plus €19.33 for the declaration of beneficial owners, plus a legal notice. The cost of the legal notice is not provided in the information sheets consulted.

Operation and transfer

• SARL The manager must be a natural person, whether or not they are a shareholder. The transfer of shares is generally unrestricted to a shareholder or a family member, unless the articles of association stipulate otherwise; it is subject to shareholder approval if the buyer is a third party. Registration fees are 3% of the price after a deduction of €23,000, proportional to the share of capital transferred.
• SASU : the president is appointed in the statutes; the transfer of shares carries 0.1 % of rights.
• EURL : manager natural person, rights of 3 % after deduction of 23,000 € proportional to the number of shares transferred.

A detailed comparison between SASU and EURL is provided on a dedicated page.

Choosing the legal structure: a numerical example (fictitious profile)

Situation. Nadia starts a consulting business on her own. Assumptions of the example, which are not rules: if she creates a company, the contribution is €20,000, entirely in cash; the legal notice is not quantified.

Issue. What must it release upon creation and what formality fees does it incur depending on the form?

Strategy. Apply the rules of the sheets: 20 % of the cash for the EURL, half for the SASU; €33.83 + €19.33 for a company; €21.74 for a commercial EI.

Result.

The €53.16 is comprised of €33.83 and €19.33. Consistency check: 19 % of the annual social security ceiling of €48,060 (value cited in the manager's social protection information sheet) gives €9,131.40, which is the same figure of €9,131 in the information sheet. This example does not specify Nadia's social security or tax status. These profiles are fictitious and do not reflect your individual situation.

Choosing the legal structure: what changes depending on your situation

• Your number of partners Whether alone or in a group, the forms are not the same.
• Your activity : commercial, artisanal, unregulated or regulated liberal professions.
• Your need to protect your assets : sole proprietorships and companies do not offer the same separation.
• Your method of remuneration : the social status of the manager depends on it.
• Your plans for partnerships or sale : the form influences the formalities of transfer.

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