Being a self-employed person means applying a simplified social security system, which allows you to pay social charges according to your turnover. It is a status that promotes the creation of a streamlined way of a for-profit company while at the same time enjoying significant administrative, fiscal and social facilities.
In straightforward terms, you have the advantage of exercising an independent professional activity and of choosing to pay the tax on your profits simultaneously as your social charges through a system of final payments. But since the creation of this statute, nothing is specific as to its future, as there are difficulties and challenges to be met. Discover here the advantages of self-employed status and also its main challenges.
Table of Contents
Self-Employed Status: What Is It?
After many experiences, you finally embark on a commercial, craft or liberal activity. Only you have to choose the legal status of the company. Two options are available to you: the creation of a sole proprietorship and a company’s product.
Self-employed status can be summed up in two points:
- The creation of a sole proprietorship, which represents the legal form under which the auto entrepreneur operates;
- The exercise in microenterprise is a unique and simplified tax and social regime.
- To become a self-employed person, it is necessary to create an individual business under the micro-enterprise regime as a commercial intermediary.
Choosing the self-employed status makes it possible, in particular, to implement an economic activity on your own, to benefit from a certain simplicity in the formalities relating to the creation, operation and keeping of the accounts. But also makes it possible to obtain social cover and a right to continuing vocational training.
Obtaining self-employed status is therefore simple and without significant financial risk, with an easy formalism and thus several advantages.
The Advantages Of Self-Employed Status
The self-employed status allows you to test an activity without leaving your current job. It will enable you to create your training as a retiree or student. You, therefore, can carry out the movement of your choice without the constraint and stress of administrative formalities. This status mainly concerns commercial, craft and liberal activities. Here are the great benefits you get!
A Status Open To All
You have the possibility of being an exclusive self-employed entrepreneur or associate it with another status such as student, employee, civil servant, job seeker, retiree or employee-equivalent manager. All you need to do is be an emancipated adult or minor, not already a self-employed worker and have an address in France. But for nationals outside the European Union, you must hold a temporary residence permit which grants opening a self-employed business in France.
Simplified Administrative Procedures
The administrative procedures for setting up a self-employed business are straightforward. In addition, no capital contribution is required.
Calculation And Payment of Social Charges
It is according to your turnover that you pay social security contributions. You have the option of paying your payroll taxes monthly or quarterly. In addition, you declare your turnover for an automatic deduction of social charges from your Bank account. Finally, you do not pay social and tax contributions when you have no revenue.
All this with simplified accounting. But the self-employed status is not immune to difficulties.
The Challenges of Self-Employed Status
The first obstacle to self-employment is undoubtedly the increase in ceilings since January 1, 2018. However, other disadvantages should not be overlooked.
- Low credibility: challenging to obtain Bank loans. Also, some customers prefer to deal with corporations.
- Capping of resources: self-employment is possible only when the turnover is less than 170,000 euros for sales of goods, foodstuffs to take away or consume on site, accommodation services and 70,000 euros for services and the rental of furnished residential premises.
- No deduction: the auto entrepreneur does not deduct professional expenses such as telephone bills, transport costs, prospecting and advertising costs, electricity, and rent. Moreover, regarding the activities of resale goods, the auto-entrepreneur is taxed on the turnover achieved and not on his margin.
Self-employed status is advantageous for a certain number of people, particularly students, the unemployed or retirees. Indeed, according to the Union of Auto entrepreneurs (UAE), this status represents a transitional stage, pending a return to employment. According to this same Federation, this business creation status is beneficial for all, and it would be detrimental to implement reforms that could complicate current trends.