You have registered as a micro-entrepreneur (formerly autoentrepreneur), and have obtained your SIRET or French business registration number. One big step! Now you are all set to start your business in France. You have your clientele in mind, you know how to advertise your business. But, what about the administrative side to it, your legal obligations, as well as the rules and regulations governing this type of business?
With this in mind, we have carefully compiled a comprehensive article for you. Apart from registering your business, we also assist you with all the paperwork that follows. Read more about our services in our Relocation/ Administrative Formalities page.
With Brexit in mind, Brittany saw a surge of new business registrations by 31st December 2020 with a view to move permanently to France. Moving to another country where business practices and paperwork are completely different, not forgetting trying to cope with the French language, are not easy. Aiesha Bonneau has the expertise to guide you throughout the procedure and beyond.
The micro-enterprise shall be registered in the National Register of Companies maintained by INSEE (French statistical body) which issues a SIREN number which serves as the business identification number, as well as an APE code relating to the main business activity.
Name of your business and information:
You are allowed to give a “commercial” name to your business which could be used in your quotations, invoices, correspondence and business cards. However, please note that all official documents will bear your personal name and not your business name.
The following information is to be mentioned on all your invoices, quotations, advertisements and correspondence:
- Your name or your business name , address and telephone number (website – optional)
- Your SIRET trade registration number
- Your Registry of Commerce (RCS) number or your “Répertoire des metiers” number.
Third party liability insurance:
As an Micro-entrepreneur, your financial liability is unlimited with the exception of your main residence which cannot be seized by creditors. However, a third party liability insurance policy, known as an “assurance responsabilité civile professionnelle”, is highly recommended and compulsory for some activities, such as for artisans in regulated trades eg. building trades.
Like any professional, a micro-entrepreneur is responsible for damages caused by himself, his premises and his equipment. He is also responsible for damages caused by objects or the products that he sells, manufactures, repairs or installs in the course of his business. In other words, it protects you from claims made by clients for errors made during the course of your business with them.
Compulsory Ten Year Building Insurance Policy for building trades:
If your business is in the building trade, you are obliged to subscribe to such an insurance policy (“assurance garantie décennale”). In order to obtain more information on the types of trades required to subscribe to this policy, you are requested to enquire with the Chambres de Métiers.
This policy guarantees your work for a ten year period and in the event of any discrepancies, your clients would be covered. You are obliged to undertake repairs and to render the work/structure in working condition.
Any builder involved in the construction of a new or existing structure (such as residential or commercial buildings, civil engineering works) is subject to a ten-year liability regime. A builder is a contractor, an individual who builds for himself, a real estate developer, a developer, a master builder, an architect, a technician, a design office or a consulting engineer. A provider in business with a contractor through a tenancy agreement is also subject to this ten year liability regime. Contractors, i.e. companies that work independently under a contract, are excluded from the scope of the law. In fact, they do not have a direct link with the contracting authority. However, they remain responsible for the obligations undertaken to the manufacturer/supplier.
The builder is responsible for any damages incurred to his work during a ten year period. This obligation is also transmitted to successive purchasers in the event of a sale during the ten year period.
SIMPLIFIED ACCOUNTING SYSTEM:
The accounting system of a micro-social regime:
You are subject to a simplified accounting system and are exempted from making a balance sheet. However, you need to keep a chronological recording of receipts and purchases or, in other words, a register of your income. This register could be in paper or in electronic format (eg. Excel sheets) on condition that the data is not modified thereafter. A copy of your invoices are also to be kept. Please note that you are prohibited from paying in cash if the amount exceeds € 1,000.
Under this regime, the income thresholds are as follows:
- €176,200 for commercial activities of purchase/sale of goods, objects, supplies, consumption of food on site or takeaways, manufacture of products or hosting services (hotels, bed and breakfast, furnished gîtes)
- €72,600 for services and “liberal” (or intellectual) professions
Register for your income/sales
comprising of the following information:
- Amount and source of income, including the identity of the client or agent
- Method of payment used: cash, cheque, bank transfer etc.
- Reference number of your invoice
- Income received in cash during the day amounting to less than € 76 could be compiled together.
- For payments received by way of cheques, a list of the cheques, the amounts and the names of the issuers could be compiled together for the day, week or month.
Register for your purchases
if your business comprises of selling goods, supplies and food for on-site consumption/takeaways or providing accommodation. An annual summary of the following details are to be mentioned :
- Types of purchases
- Payment methods used to purchase the articles etc.
- References of invoices obtained
A bank account for your business:
- You can use your personal bank account (in your name) for your business although it is recommended to hold a separate account for your business.
- However, you are obliged to open another account (personal or professional) if your turnover exceeds € 10,000 for 2 consecutive years. Your professional account can have your business name with cheque books and bank cards bearing the company name.
Reporting your turnover:
To be undertaken online via the following link: https://www.autoentrepreneur.urssaf.fr/portail/accueil.html
- You are obliged to create an online account and declare your turnover either monthly or quarterly, depending on the choice that you made when you registered your business, and pay your social charges using your bank card or a standing order.
- You have to declare your turnover even if it is nil.
- If you fail to declare your turnover, URSSAF, the Government body in charge of obtaining these declarations, could apply a € 50 penalty. Moreover, if you persist in not declaring your income, you would be obliged to pay a higher percentage rate for your social charges.
- If you do not declare your income for 24 consecutive months your business shall be closed. You shall however receive a reminder prior to closure.
- You are allowed to regularise the status of your declarations at the end of the year.
- In the event of a tax inspection, an unkept or incomplete register of your income may result in penalties.
- Please note that you need a SIRET registration number for each of your activities (if they are different eg. carpentry and having a gîte business). You would have to decide on your main activity during registration. However, incomes from all your activities are to be declared on a single form in the appropriate sections.
- Your business is under the BNC (“bénéfices non commerciales”) if your income is not of a commercial nature. However, if you do sell goods, your business would be subject to BIC (“bénéfices industrielles et commerciales”).
- You are obliged to declare your annual income (from January to December) to the tax authorities even if you have opted to pay your taxes on a fixed levy at source (known as the “prélèvement forfaitaire libératoire”).
- The tax forms to be completed are 2042 and 2042-C. The latter form is for your business income.
- A 10% penalty is levied for submitting your tax return after the due date.
Payment of your “Cotisation Foncière des Entreprises” (business/ property tax):
- You are exempted during the first civil year of your business. However, please note that if you registered late during the year, you are obliged to complete a form given by your tax office by 31st December in order to benefit from this exemption. If you did not receive the form, you are to contact your tax office for the form or get it online in the French Government’s tax website.
- You are also exempt from this payment if your annual income is less than € 5,000.
- Payment of this tax is to be made online via the Government income tax website impots.gouv.fr where you should set up an account as a “professional”. Your tax returns are to be made on the same website under “particulier” (individuals).
A quotation given by a micro-enterprise could be based on the same model as an invoice as most of the information contained therein is similar. They do not replace invoices which are issued when the work is completed. Do not forget to mention the related quotation number in your invoice.
You are bound by the conditions mentioned in your quotation as it is considered as a contract. However, the client is only committed to paying you as per the terms of the quotation after having signed the quotation (or accepted it in writing).
You are allowed to make an addendum to your quotation if the work mentioned in the previous quotation did not reflect the correct timescale for example.
Two copies of the quotation are made, one for the client and the other for you. In principle, they are to be made in French and in English for anglophones.
Under French law, quotations are to be kept for a minimum period of 10 years.
Compulsory data to be included (where applicable):
- The words “Quotation” and/or “devis”
- The date of issue
- The quotation number in sequential order
- Your name and/or your business name and contact details
- Your trade registration SIRET number
- Your Trade Registry number (« Régistre du Commerce et des Sociétés » or « RCS » number or the “Répertoire des Métiers” (building trade number)
- Name of your client or company and the place where the work was undertaken (unless if your client does not want his/her address mentioned)
- The total amount to be paid and deposits received
- Details of the work or products, quantity and the gross unit price
- Labour cost
- Transport expenses
- Terms and conditions of payment, delivery and work to be undertaken
- Starting and completion dates of the work involved
- Conditions relating to claims
- Conditions of after-sales service (especially relating to guarantees)
- For tradesmen: ten year building insurance policy
- The words “Free quotation” (devis gratuit) or price of the quote
- Validity period of the quotation
- The words “Bon pour accord” (Quotation accepted) or “Lu et accepté” (read and approved). The clients would date and sign it.
The following compulsory data is to be mentioned, where applicable. As for quotations, all invoices are to be kept for at least 10 years.
- Name and address of your client
- Invoice number in sequential order
- Date of issue (in principle, the day of completion)
- Description of the work undertaken, quantity, unit price and total amount
- The words “TVA non applicable, art. 293 B du CGI” as you are exempted from VAT
- However, if your income exceeds the threshold limits for two consecutive years (€ 72,600 for services and € 176,200 for sales), you will thereafter be subject to VAT. You are therefore obliged to mention the gross unit price and the total gross amount and your business shall no longer be considered as an auto-enterprise. You would be obliged to upgrade/change your business regime.
- Delivery date of products or work if it is different from the billing date
- Deadline for receiving the payment
- The penalty rate (in percentage) for late payment beyond the deadline.
- Conditions of a reduced price if payment is made prior to the deadline. On the contrary, the words “pas d’escompte pour règlement anticipé” (no rebate for early payment) are added.
- Penalties can be levied for any payment delays between professionals. See link here.
- You are allowed to issue invoices in any foreign currency but you shall be subject to the exchange rates applied by your bank.
- You are permitted to accept online payments (eg. PayPal, Stripe) but watch out for commissions levied by your e-payment supplier.
OTHER USEFUL INFORMATION:
Changes relating to your business:
You are obliged to inform URSSAF via the auto-entrepreneur website of any changes relating to your business such as a change of address, your name, adding or removing your spouse as a business partner or making any additions or removals to your type of activity.
- Forms are available as per the requested changes.
- An individual cannot have more than one “auto-entreprise” business. However, you have the possibility of carrying out several activities of a different nature within the same business set up. Multiple activities within a micro-enterprise do not increase the turnover threshold.
Top-up health insurance or “mutuelle”:
Although you will be registered under the general health regime, a top-up health insurance will allow you to obtain a better reimbursement for your doctor’s visits, medicines and hospital bills.
Being employed and having an auto-entreprise business:
- You are allowed to own an auto-entreprise business and be an employee of a company.
- However, your business should not be in direct competition with your employer’s business.
- If you are employed, you should not utilise the time spent under his employment to undertake your business activities.
- You cannot have a sole client under the auto-entreprise business and work under his leadership on a regular full time or part time basis. Moreover, if you are working in his premises and use his equipment, you are considered as being an “employee” instead of a “company”. Companies employing personnel are regularly inspected by URSSAF in relation to illegal employment. This is because the company hiring you as a micro-entrepreneur would pay you based on your invoice, whereas if he hired an employee he would be obliged to pay an additional 50% of the employee’s “salary” to URSSAF by way of social charges.
We hope that this article gave you the information that you were searching for. We will make sure that the information is updated.
Sourced from the Government website Service-Public.fr and various consultancy companies’ websites.