The new business structure could make having a business in France less of a headache. The recent law modernisation, no. 2008-766 from the 4th August 2008, will bring into place a new type of sole trader structure, the Auto-Entrepreneur. This will be operational from the 1st January 2009, if the final decrees are passed.

Following in the footsteps of the micro and the recently introduced micro social, this has been created for those people, who would like to set up a small business structure and limit the risks of a business creation. It is easy to set up or shutdown, and can also be used when someone is already employed or retired . It involves a system of declarations of real income, on a quarterly or monthly basis and payments of social charges and income tax corresponding to real sales for that period . It is designed to simplify a business creators progession into the independant business world. It requires the completion of a form and a payment corresponding a percentage of sales to cover the fiscal and social charges.

Legal Form :

Entreprise Individuelle (Sole trader) – meaning no need for a capital invest ment, but making the enterpreneur wholely responsable for all business debts. Your home can however be pro tected by a Déclaration d’Insaisissabilté drawn up with the Notaire. Advantages:

• To start-up, if you already have a salaried or professional activity, there is no need to inscribe on the Registre du Commerce et des Sociétés or the Registre des Métiers. (This does not Include those who inscribe with URSSAF as a profession libérale)

• Fiscal and social charges based on real sales figures i.e. No sales = No Social or fiscal charges

• The same fiscal and social regime as a micro entreprise

• Start-up and shutdown procedures made simple and rapid via the Internet

• Easy accounting

• No need to make an official demand to create a commercial locale in your home

Rules:

• Only accessible to companies having sales limited to :

• 32 000 euros (HT) for a service activity

• 80 000 euros (HT) for a commer cial activity (i.e. sales of merchandises, objects, supplies, con sumable goods, food to be eaten in or taken away or lodgings)

This is limited to a total sales figure of 80 000 euros if you have a mixed activity, with service part being limited to 32 000 euros (unlike the classic micro, which put one on top of the other).

• Can not pass from another struc ture to go into auto entrepreneur

• The auto-entrepreneur has to opt into this regime, by the latest, the last day of the month following that of its creation

Social Charges:

Compulsory to follow the micro-social regime ( micro entreprise) with payments either every quarter or every month (your choice) (in place from the 1st Jan 2009)

• 21.3% of sales for a service activity

• 12% of the sales of a commercial Activity

Taxes:

If conditions, concerning the maximum household fiscal revenue, are met, there is the possibility, as with the social charges, to pay either quarterly or monthly payments towards taxes. For this, your income as a single person must not exceed 25 195 euros or 50 000euros for a couple and 75 000 euros for a couple with a child.

• 1% for those with a commercial Activity

• 1.7% for service activities that come under BIC

• 2.2% for services from professionals (BNC)

This is only applicable if the entrepreneur has opted into the micro-social declarations. If they have not or they go over the fiscal limits, they continue as for the old micro entreprise, to pay on the income progressively, after the forfeit has been deducted TVA ( VAT): As with the micro, TVA is non applicable. Taxe Professionnelle Having opted for intermediary payments towards income tax, you are exonerated from taxe profesionelle for the following two years (corresponding to three years without payment)

Accounting

The mirco system and hence the auto entrepreneur option has the advantage of being limited on accounting demands. You do have to, however, keep a detailed ledger for sales, with a summary for the year and copies of all bills relating to the purchases, sales and services. Accessory costs do not need to be kept. Travel expense forfeits can be included in your tax return (no.2042) based on the fiscal bareme for the year.

Note

The auto-entrepreneur system has not been finalised and changes may be made before its introduction in January. Those persons who have already opted into the micro-social system should look into moving to the auto-entrepreneur option. Information is available from the Internet or the RSI