Becoming a self-employed entrepreneur is an appealing idea that is attracting more and more French people. Indeed, over a million businesses in France benefit from this status. It must be said that creating a self-employed business is very easy, encouraging entrepreneurs to choose it. However, be careful, as despite its many advantages, this regime also has its drawbacks. So, before becoming a self-employed entrepreneur, take the time to study the advantages and analyze the disadvantages. In this article, discover why you should be a self-employed entrepreneur.
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Why be a self-employed entrepreneur?
The reasons for choosing this status can be numerous and personal. However, the following cases often come up in discussions.
Your entrepreneur profile
Indeed, even though it is easy to create a microenterprise or a self-employed business, this status is more relevant for certain types of managers. If you are an entrepreneur who wants to experiment with a service or a new product, this is the ideal status. A beginner entrepreneur can also choose the self-employed status to “test the waters” before moving to a corporate regime. Students and employees may also choose this option to be able to work freely for themselves and part-time.
Your revenue
If you have a commercial activity and your revenue never exceeds €170,000, the self-employed status is made for you. Similarly, if you provide services and your revenue remains below €70,000, this is the ideal status. However, be aware that if you exceed these thresholds for two consecutive years, you will automatically switch to the individual business regime on December 31 of the second year of exceeding.
A simplified tax and social system
Being a self-employed entrepreneur means benefiting from reduced tax obligations. Simple and practical, these obligations have been put in place to facilitate your taxation. Above all, they should not be a deterrent. Socially, self-employed entrepreneurs have enjoyed the same protection since January 1, 2018, as employees when the RSI was transferred to the general social security system. The RSI was then replaced by the SSI (Independent Social Security) for the social protection of self-employed entrepreneurs.
As mentioned earlier, executives choose to be self-employed entrepreneurs for their own reasons. We have just cited criteria as examples. Furthermore, there are other advantages to this status that might lead you to choose it.
The advantages of self-employment
The self-employed business certainly embodies the word simplicity in its purest form. Indeed, at several levels and in various areas, everything has been simplified. For example, steps to create and terminate activities can be done online to make them more accessible and easier to accomplish. Additionally, to set up your micro-enterprise, you do not need to go through extensive declaration formalities. When it comes to your accounting obligations, they are so simple that you don’t even have to hire a professional accountant.
On the other hand, if you decide to become a self-employed entrepreneur, your expenses will be significantly reduced. If, for example, there is a lack of funds for creating a self-employed business or if the self-employed entrepreneur is unemployed at the time of creation, they can benefit from ACCRE (Aid for the creation or takeover of a business). This is a partial exemption from social security contributions, which will last for three years. However, other state aids can be requested even after three years. Also remember that if the self-employed entrepreneur does not receive any income, they will not pay any fees. Furthermore, below certain thresholds, a micro-enterprise is not subject to VAT.
Becoming a self-employed entrepreneur: the disadvantages
Like a coin, the self-employment system also has its downsides. Knowing the disadvantages will help you better understand why being a self-employed entrepreneur requires a lot of thought.
One of the first dangers of this regime is certainly the fact that it is not possible to distinguish the self-employed entrepreneur from their micro-enterprise. Thus, your personal wealth will be considered as that of the micro-enterprise. Your personal assets can therefore be used to repay your business debts. In fact, you take on more responsibilities by choosing this regime.
Moreover, even if the micro-enterprise grows, the self-employed entrepreneur will not have the right to hire an employee. They will have to manage everything themselves. Additionally, while the capped revenue may suit some businesses, it does not always correspond to the revenue of others. It will also be impossible for the self-employed entrepreneur to recover VAT on purchases.
You should not ignore these disadvantages to avoid unpleasant surprises once your micro-enterprise has been set up.
How to become a self-employed entrepreneur?
After analyzing the reasons that might push you to become a self-employed entrepreneur and after studying the advantages and disadvantages of this status, you now know why being a self-employed entrepreneur is appealing. Let’s now look at how to become one.
As with all startup businesses, steps must be taken and necessary documents must be provided to obtain registration. However, everything has been designed to facilitate the creation of this form of business. You must fill out the Cerfa P0 or “declaration of commencement of activity” indicating, among other things, your personal information, the activities carried out, the place of exercise (choice of direct debit), the option chosen for the payment of contributions, etc. This step can be completed online on the dedicated micro-enterprise website. This document must then be submitted to the competent Business Formalities Center. However, it must be accompanied by an identity document, proof of residence dated within the last three months, and a declaration of non-conviction.
Also consider that you must declare your activity, as its nature will ensure that you are registered with the RCS (Trade and Companies Register) or the RM (Directory of Trades). If you will be engaging in a commercial activity, you will be with the CHN. On the other hand, if your activity is artisanal, you will be registered with the RM.
In addition to being easy to manage, the self-employed business is also easy to set up. All these advantages make the strength of the regime.
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