EURL, SASU, and Individual Business: Advantages and Disadvantages for SMEs

Extract

[...] Already in the individual business with two assets, there is no statute. Therefore, no general meeting to organize. In the EURL and the SASU, on the other hand, the sole associate must organize meetings, but is exempt from the formalities of convocation, verification of the quorum and majority rules. Simplified single-member companies with a simplified legal status offer many advantages to entrepreneurs who want to exercise their activity. However, these legal forms also present certain disadvantages that need to be taken into account. [...]

[...] Flexibility in taxation: Option for IR or IS. Disadvantages: 1. Separate management of assets: A strict management of professional and personal assets is necessary. 2. Less suitable for fundraising: Less attractive to external investors compared to a partnership structure. The choice between these statutes depends on the specific needs of the company, the manager's preference for management and the nature of the activity. It is always recommended to consult a business law professional to obtain advice tailored to the company's specific situation. [...]

[...] Here is an overview: EURL (Sole Proprietorship with Limited Liability) : Advantages : 1. Limited Liability: The personal assets of the manager are separate from those of the company, providing personal protection in case of the company's debts. 2. Flexibility in management: The sole manager has a great freedom in managing the company. 3. Favorable taxation: Option to choose between income tax or corporate tax depending on the financial situation. Disadvantages: 1. Administrative complexity: Some administrative aspects may be heavier than in an individual business. [...]

[...] This means that there is no risk of confusion of the assets, between the professional assets of the partners or the sole partner, and the assets allocated to the activity, in case of debts of the company. When it comes to individual businesses with two assets3, The personal assets of the business owner are not engaged. Only the professional assets, also called the affected assets, will be responsible for the debts of the company. Similarly, for the EURL and the SASU, a new legal personality is formed, distinct from the sole partner, with a specific assets. [...]

[...] SASU (Simplified Joint Stock Company with a Single Shareholder): Advantages: 1. Limited liability: Liability is limited to the amount of contributions. 2. Statutory flexibility: Great freedom in drafting the statutes and managing the company. 3. Flexible taxation: Option to choose between IR or IS. Disadvantages: 1. Administrative complexity: Like for the EURL, some administrative formalities can be complex. 2. Cost of constitution: The creation costs may be higher. EIRL (Limited Liability Individual Enterprise): Advantages : 1. [...]