Choosing the right legal status for your salon

The main characteristics

If you think about the main points of this dilemma, you realize that there are two major possibilities : the individual business or the company.
 

The individual business (auto-entrepreneur, individual entrepreneur and individual entrepreneur with limitation of liability) is characterized by :

• Simplified formality of administrative creations
• A status of self-employed person
• A bigger responsibility of the entrepreneur regarding their personal assets except in specific cases

The company (SARL, SAS, SA) is characterized by :

• The possibility of working alone or with several associates
• A responsibility limited by the amount of the supplies
• The choice between several sociable and fiscal options

The right issues to examine

Most of the hairdressing salons practice as an individual business. This choice is generally made by ignorance of the other status and, for about 10 years, we can see a clear tendency towards the creation of limited liability company  (SARL) alone or with several partners.

Indeed, the new entrepreneur must ensure that his/her legal status meets three main requirements :
 

• The tax system

The companies are subject to the corporation tax up to 33,33% of the company’s benefits, or subject to the income tax which depends of the family situation of the franchised person.
This situation can be optional or obligatory depending of the kind of company you chose.
 

• The social regime

If the franchised person is a corporate officer or a minority manager of the limited liability company, they get the same cover as the general social security regime except the unemployment insurance.
If he/she is a self-employed person like an individual entrepreneur or a majority manager, he/she is subject to the régime social des indépendants (RSI).

• The protection of the personal assets
   

Some status only provide a partial protection of the personal assets of the manager while others can limit the liability of the latter provided they don’t stand surety to the banker for example.