WHAT IS THE BEST STATUS FOR A COMPANY?

Published on : 20 April 20203 min reading time

The legal status of a company determines the legal framework that governs it. The legal framework groups together the applicable legal texts according to the form of the company. The legal regime is therefore different from one company to another. The decision should not be taken lightly because it presents important issues. The best legal status for a company depends mainly on the project of the company founder.

SETTING UP A COMPANY IN CASE OF RISKY ACTIVITIES

The ability to limit liability is one of the main advantages of setting up a company. If you want to carry out a large business activity, which requires the integration of other partners or requires a large amount of share capital, you should choose the appropriate legal regime for a company. However, it should not be forgotten that there are several forms of commercial companies.

OPT FOR A SOLE PROPRIETORSHIP FOR A SMALL BUSINESS

The legal status of sole proprietorship is suitable for a project leader who wishes to start a self-employed activity. If it is carried out on a secondary basis, the micro-enterprise form is recommended to facilitate its management and creation. It can also be argued that the sole proprietorship is the simplest form for a low-risk activity, given the joint and several and indefinite liability of the entrepreneur.

DIFFERENTIATING BETWEEN A SOLE PROPRIETORSHIP AND A COMPANY

There are different types of company statutes, but in general they are grouped into two, namely sole proprietorships and companies. A sole proprietorship does not lead to the creation of legal personality. The creation of a company requires more stringent formalities than that of a sole proprietorship. The difference lies in matters of assets and liabilities, tax regimes and operating rules. For a sole proprietorship, it is advisable to submit your file to the Business Formalities Centre. Whereas for a company, publication in a newspaper of legal announcements is necessary. The assets of the company are the same as those of its creator. The company has its own assets, which are separate from those of the partners. From a tax point of view, a sole proprietorship benefits from a more favourable tax regime than a company that is subject to corporate tax. Finally, as far as the operating rules are concerned, the sole proprietor has freedom of action compared to entrepreneurs in a company subject to certain rigid formalisms for all decision-making.

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