New for self-employed

Any self-employed person can choose this status, be they shopkeepers, skilled workmen, liberal professions, farmers or an auto-entrepreneur.  In addition, it can be adopted at the time of setting up or afterwards.

The first thing to do is to file a déclaration d'affectation at the Registre du Commerce, Chambre des Métiers where all the self-employed are registered. This declaration is a list of the necessary assets used for the professional activity.
Where there is joint ownership (spouse, partner etc), the second owner must give their consent. The nature, quantity and value of each asset (bien affecté) must be listed in this declaration. Up to a certain limit which has yet to be set,  you will have to value the assets yourself.

After this limit, you need an expert opinion, for example from a chartered-accountant (or a solicitor for the real estate). If you do the estimation, you will be considered responsible by the creditors if the value is not correct (for a period of five years).

The other obligations for an EIRL are to have a professional bank account and to keep and register annual books. In a fraud case, the self-employed person will be considered responsible for all their assets. On the declaration, listed goods are called patrimoine affecté and only professional assets can be taken into account by the professional creditors.

Conversely, private creditors cannot touch professional assets, except for debts incurred before the declaration,  unless the creditors agree to include them into the listed professional assets.

Net income of an EIRL is normally subject to income tax but it is possible to opt for corporate tax. In this case, only the professional income is subject to social security contributions under certain conditions.

Finally, the EIRL can be passed on with its listed professional assets (patrimoine affecté) but, in the event of death, it disappears.

While the new status offers  advantages that you would normally only get by setting up a limited company, it is worth getting some advice.

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