Establishing a micro-enterprise: a good choice?

Is it a good idea to establish yourself in a micro-enterprise? It is a question that many entrepreneurs ask themselves, poised between the simplicity of the statute and the significant limits it presents. Let’s try to see it more clearly…

A little history to begin with. In 2008 the self-employment regime was established, introduced to remove as many obstacles as possible to the creation of a business: a real success, accompanied however by controversy, with the accusation of unfair competition against the self-employed worker compared to the other statutes . The scheme was therefore reformed in 2015 and renamed “micro-enterprise”. Some obligations have been reinstated, notably the professional qualification for craftsmen. But in reality it is the self-enterprise system that triumphs. Indeed, it has never been easier to start a business in France.

What exactly is a micro enterprise?

A micro-enterprise is nothing more than a sole proprietorship, i.e. an activity carried out “in one’s own name”. But the micro-enterprise has particular characteristics, particularly on the social and fiscal level.

Contrary to popular belief, the scheme has no duration limits (provided certain turnover thresholds are not exceeded) and allows for recruitment. You can create and terminate a micro-enterprise at any time. It should be noted, however, that the plan is closed to certain types of businesses such as agriculture, art or medical professions.

What advantages?

The first advantage of the micro enterprise is that there are no accounts to keep. The only obligation concerns the follow-up of the turnover, which can be done on a simple notebook or desktop computer. The turnover must be declared monthly because it is on the basis of this that the social security charges and taxes will be calculated.

It is therefore a percentage of turnover that will be deducted for the payment of contributions, i.e. 12.3% for the sale and purchase of goods, or 21.2% for the provision of services. These rates are halved in the first year of activity in the event of use of the ACRE (Aid to Creation or Business Takeover; see our previous article on aid). An extremely simple system therefore, with no risk of error, no payment times, no regularization of charges: this is what is called the “micro-social regime”.

As for the income tax, it is calculated on the basis of an estimated income, i.e.:

29% of turnover for sales activities,

50% of turnover for service activities,

66% of turnover for self-employment activities.

It is therefore on the basis of these amounts that the tax brackets and rates will be applied. You can also opt for exemption from income tax, which will then be deducted as a percentage of turnover, like social security contributions: what could be simpler?

Another advantage: it is permissible to carry out different activities in a micro-enterprise, for example a business of selling goods and a business of services. Finally, the scheme is subject to the same rules as other companies regarding the payment of VAT.

What disadvantages?

The micro-enterprise regime also has limitations, which in some cases make it an unsuitable status. First, the absence of accounts can be an obstacle, for example to obtaining professional or personal finance. Indeed, without an accounting document proving your profitability, your financial advisor may lose his smile. Likewise, goodwill will be difficult to value or resell, again due to lack of accounting…

Another disadvantage is that the micro-regime is closed to certain aids such as tax exemptions in the rural revitalization zone or the honor loan of the Aveyron initiative.

Finally, the plan is limited in terms of revenue. However, the ceilings have been significantly raised in recent years: they now stand at €188,700 for the sale of goods and €77,700 for the provision of services, which leaves time to see what happens. Ultimately, micro-enterprise status is suitable for small businesses that do not require large investments or legal commitments, at least initially. This status can be exercised while remaining dependent. It allows you to test your idea in the best conditions, without stress and limiting risks as much as possible.

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