Creating a business with the status of auto entrepreneur (micro business) is increasingly popular with the French. It allows you to embark on a professional project, and become your own boss, while having a lot of advantages.
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Becoming your own boss is the dream of many people. Being free, not being accountable, being able to choose your schedule and working for yourself is not given to everyone.
You have to be able to get started and accept to take risks.
A self-employed entrepreneur, késako?
Together we will understand what this status corresponds to and what the advantages and disadvantages are.
Although this plan is simplified to allow as many people as possible to get started, there are subtleties. Knowing it well will allow you to undertake with ease and without unpleasant surprises.What is Auto entrepreneur status?
This is a sole proprietorship. The tax system is that of the micro enterprise. Regarding contributions and social contributions, these depend on the social system. The procedures are simplified and can be done by everyone. A site has also been set up in order to be able to carry out the greatest number of online procedures "auto entrepreneur.urssaf.fr".
With this status, you can exercise a commercial activity (hairdressers), liberal (ski instructors) and artisanal (cabinetmaker). One of the significant advantages of this self-employed status is the possible reconciliation with another activity, employee or not.
Since 2016, the auto-entrepreneur status and the micro-enterprise status have merged. So there is no difference between the two. From now on, we will talk about the status of "micro entrepreneur".
What are the advantages ?
As I told you above, this status has a number of significant advantages. Starting with the creation of the activity, and until the cessation of activity, we will approach all the good sides of the micro enterprise.
- Simplified procedures
- Reduced contributions
- Possibility of combining with another activity
- Exemptions from social contributions
By opting for this legal status, you will have, under certain conditions, the right to a reduction in contributions during the first calendar year of exercise.
In addition, if you are unemployed when you start your business, you can claim start-up aid. This may be necessary for the purchase of materials, advertising and installation.
If, on the other hand, you are an employee, you can continue to work while embarking on the adventure of micro-enterprise. You will be able to combine your salary and the turnover of your self-employed business.
Although the procedures are simplified, you should not throw yourself into such a project with your eyes closed. Becoming your own boss is not a decision to be taken lightly.What are the disadvantages ?
Although this status is the most advantageous for getting started without taking too many risks, there are still disadvantages that it is important to know.
- Limited turnover ceiling
- No charge deduction
- VAT recovery impossible
- Limited pension contribution
- Non-deductible charges
These disadvantages, although minimal, depending on the activity for which you have chosen the status of self-employed entrepreneur, are still to be taken into account.
It should be noted that a craftsman who exercises a trade that requires high expenditure in tools, such as the building trades, will not necessarily have an interest in choosing the status of micro-enterprise.
On the other hand, for a hairdresser at home, who sells a service, it will be wiser to opt for the status of self-employed entrepreneur.
Owning a website when you are self-employed
In the digital age, owning a website for your micro-enterprise has become imperative. Of course, this is not necessary for all professions. But when a service or product is offered, having a digital identity is essential.
I will not hide from you that the creation of a website is expensive. However, asking a web designer is no longer mandatory thanks to the many sites that offer you to create it yourself: WIX, IONOS, SQUARE... and many others.
Rates vary from single to quadruple, or even more. I will give you a range, wide, depending on the option chosen.
- Freelance web designer: between 1000 and 3000 euros.
- Digital agency: between 5,000 and 100,000 euros.
- Do it yourself: about ten euros per month.
As we can see, depending on the service provider, but also on the demand, you will not have the same amount to pay.
You should know that creating a website requires a lot of skills.Our website was created by an experienced web designer. It required a lot of work and even once the creation is finished, there are always improvements or changes to be made. In addition, hosting and domain name privatization have a significant annual cost.
But this is much more than necessary, in order to be able to develop sufficiently and have a wide distribution. In today's world, social networks and websites have a huge impact on the image and extension of a company.
This is a step that absolutely must be prepared in advance so that the result matches the image you want to have.
Other possible statuses
For future bosses who plan to have a different status, for several reasons, in particular on the turnover which, according to a forecast, would be beyond the authorized limit for the self-employed status.
Not choosing the status of self-employed entrepreneur can also be a solution when you choose to practice a profession that generates heavy loads. These cannot be deducted with the status of the micro enterprise.
Here is an overview of the statuses and their characteristics:
- EI or EIRL, sole proprietorship or sole proprietorship with limited liability. These statutes are flexible but the liability of the entrepreneur is unlimited. Personal or professional property is not dissociated.
The micro enterprise is one of the individual enterprises. It is not possible to create them with an associate. No starting capital is required.
- EURL / SARL, sole proprietorship with personal liability / limited liability company. Possibility of creating a company with several associates. A starting capital is necessary to create a company with this legal status.
The responsibilities are specific to the company and do not concern personal assets. You will be able to deduct your expenses, and thus recover the VAT.
Choosing the right legal status is more than important. Depending on the activity, expenses and turnover that you estimate, the choice will be different.
Becoming a self-employed entrepreneur has many advantages, but despite everything, the disadvantages that can be attributed to this status are not less. On the other hand, this status will allow you to continue your current position, while creating your business. A significant asset, especially financially.
In conclusion, collect as much information as possible to avoid unpleasant surprises.
But above all, get started! ;)