20/05/2022
FRENCH WORDSMITH INFORMATION: NEW Legal Requirements for Micro-Entrepreneurs
If you are a micro-entrepreneur (ME), this is essential reading about some small but significant changes. Nothing too onerous, and some good news, but you may want to reach for a small G&T!
In a nutshell, from 15 May 2022 all MEs must add either ‘Entrepreneur Individuel’ or ‘EI’ after their personal name on all commercial documentation, as well as to the account name of their dedicated bank account e.g. Jenifer Smith EI or Jenifer SMITH Entrepreneur Individuel.
This is due to a new law (Décret n° 2022-725 du 28 avril 2022) which has the added bonus of now automatically protecting all your personal assets as an ME/EI from debts arising from your business activities.
For those who want to understand a little more, here are some bite-size explanations:
1. A micro-entrepreneur is not a legal business structure but rather a tax status, therefore you could not limit your liability in the way a SARL, for example, (similar to a Ltd company) can protect certain assets.
From 2016 la loi Macron disallowed a debtor from being able to seize your primary home to settle any business debts – even for MEs – but they could still seize personal assets such as savings. So, Macron did good; but this new change goes further to protect all personal assets as an EI - though bear in mind, debtors can still seize business assets, and unpaid social charges are considered personal debts.
2. Remember, if your turnover exceeds 10K you must open a ‘dedicated’ (separate) bank account (un compte bancaire dédié) but not necessarily a ‘business’ account (un compte bancaire professionnel) which carries additional charges.
The speed with which each banking organization can – or will – allow this account-name change to what is essentially a ‘normal’ bank account is “à voir!”. Some will refuse due to system issues (their database won’t allow); others will use it as an excuse to try to make you to open a (more expensive) pro account; and some will be ignorant of the new law. In many cases, a simple email request citing the requirement should get them to make the change, in others you may have to change banks. Just maybe take care to ask if there is likely to be any issues while the change-over is taking effect.
3. ‘Entreprise Individuelle (EI) and Micro-Entreprise (ME) have always been interchangeable: they are one and the same thing, akin to ‘self-employed’ or ‘sole-trader’. But, until now, you didn’t need, as an ME, to state that you are also an EI. Now you do.
Commercial documentation includes your website or page; your invoices, letter heads and T&Cs (yes you should have these too); and, it would seem therefore, all promotional material too. Relatively easy for certain amendable documents; for those who have just ordered 1000 new business cards before this sudden announcement, it is going to be a bit of a faf and potentially add additional costs.
I personally will ease myself into it and show willing; changing as much as I can with immediate effect, and deal with the other aspects over time.
I would be surprised if the French administration put anyone’s head on the chopping block as long as you start the process now.
Note to the reader: As ever, I’ve done my utmost to give you the facts and clear explanations prior to publication, but you’ll need to keep an eye on updates and, for more clarification as it becomes available, check out entreprendre.service-public.fr and federation-auto-entrepreneur.fr
Jenny Smith EI, French Wordsmith, offers comprehensive administrative, translation and support services for English-speaking people in France on just about anything you can think of – from business and building to health, home, residence and schooling – and if she doesn’t know the answer she will find someone who can.
Contact her via mail: [email protected] or phone 06 79 85 58 84
