All legal forms of the company

The legal form of an enterprise defines the rules that are applicable to it (its status) under the law  : terms of incorporation, minimum share capital, relationship between the partners, methods of taxation of profits, etc.

There are two main legal forms  : the sole proprietorship and the company .

Be careful not to confuse legal form and legal status of a company . The two terms are close and inseparable, but they must be distinguished: the legal form is the form of the company (SA, EURL, SARL, EIRL etc.) whereas the status refers to the rules and obligations (legal, fiscal …) that flow from this form.

List of main legal forms

There are a very large number of legal forms for a company. They can be classified in two or three categories  :

1 / Single-person companies: individual companies, EURL , SASU.

2 / Commercial pluripersonal enterprises: SARL, SA, SAS, SNC, SCA …

3 / Civilian pluripersonal enterprises.

Note: Commercial and civil pluripersonal enterprises differ only in their social purpose. The former have commercial activities, the latter civil activities. In both cases, these are companies.

Unipersonal structures

Single-person enterprises may or may not have the shape of a company. Sole proprietorships are not corporations. EURL and SASU are companies.

The sole proprietorship is the simplest legal form . It has no capital or partner. A sole proprietorship does not have the legal personality  : the person of the company merges with that of the entrepreneur. Consequence: the responsibility of the individual entrepreneur is not limited.

A sole proprietorship is subject to income tax . Self-enterprise is a form of individual enterprise, alongside IS and EIRL.

A person can create a one-person company. It will be a EURL or an SASU. Unlike the sole proprietorship, EURL and SASU have the status of a company  : they have a separate legal personality independent of that of the entrepreneur. The entrepreneur has the status of sole partner and his financial responsibility is limited to his contributions. A single partner has the option of subjecting his single-member company to income tax or corporate income tax.

Multi-personnel companies

Multi-employee companies are, as their name suggests, companies with multiple partners . They have the status of society and therefore have legal personality. They may take a civil or commercial form depending on the nature of the activity .

Note: The most well-known and most common multi-person companies are: public limited companies (SA), public limited liability companies (SARL) and simplified joint stock companies (SAS).

A distinction must be made between multi-personnel corporations, capital companies and partnerships (SNC). In capital companies (SARL, SA …), the financial responsibility of the partners is proportional to their contributions. Profits of corporations are taxed on corporation tax, but dividends and wages of partners are taxed on income tax.

No minimum capital is required to create a partnership . The special feature of partnerships is that partners are subject to income tax in proportion to their capital contributions. An SNC must be composed of at least two associate traders.

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