Becoming an auto-entrepreneur: everything you need to set up your micro-business

Becoming an auto-entrepreneur, or micro-entrepreneur as it is now known, is a major decision in any professional life.

How do you go about setting up a micro-enterprise, and what are the formalities involved in declaring your business?

Roadmap to your new adventure:

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What are the conditions for becoming an auto-entrepreneur?

Who can become an auto-entrepreneur?

Anyone can become a self-employed entrepreneur, as long as they are over 18, have an address in France and at least a residence permit that allows them to run their own business.

This can be your main activity, or a complement to a salaried or student job, or even retirement.

🧐 Restrictions : you cannot combine this status with another self-employed activity registered with Urssaf, and certain activities are excluded (agricultural activities attached to the MSA, regulated self-employed activities, activities covered by property VAT, artistic activities covered by Agessa, etc.).

Other conditions to be met

What is the turnover ceiling for micro-enterprises?

The micro-enterprise scheme is subject to a turnover ceiling per calendar year:

🤓 These figures are prorated according to the date you start your business.
If the turnover thresholds are exceeded for 2 consecutive years, you will no longer be covered by the micro-enterprise scheme from the following year.

What is the VAT ceiling for micro-enterprises?

Micro-entrepreneurs can be exempted from declaring and paying VAT, and can therefore invoice exclusive of tax, up to a certain amount of turnover:

There is no limit on turnover in the first year of existence. Thereafter, beyond these figures, the micro-enterprise simply becomes subject to VAT.

The obligations of a micro-entrepreneur

In addition to :

• declaring your activity,
• registration,
• proof of professional experience or a diploma for certain activities...

you must :

1. take out professional indemnity insurance;
2. join a mediation scheme of your choice to resolve any disputes out of court;
3. open a bank account dedicated to your professional activity, whether personal or business, with a turnover in excess of €10,000 per year for 2 years;
4. declare your turnover every month or every quarter (the first declaration must be made at least 90 days after you declare that you are starting your business), even if it is zero;
5. declare and pay your contributions online via the Urssaf website: they represent 12.8% of turnover for a commercial activity, between 22.1 and 22.4% for a self-employed activity and 22.78% for a craft activity;
6. systematically issue invoices and keep all the supporting documents relating to your purchases and sales, and all your turnover declarations.

The stages involved in becoming an auto-entrepreneur

Stage 1: registering with the relevant CFE

First of all, you need to set up your micro-enterprise online. To do this, you need to make a declaration of commencement of activity to the Centre de Formalités des Entreprises (CFE) by completing the " P0 Micro-Entrepreneur " or Cerfa P0 form, together with a copy of your identity document.

The autoentrepreneur form includes the fields :

• activities carried out
• civil information,
• place of business (choice of registered address),
• option chosen for payment of contributions.

The people you deal with depend on your category of activity.

1) If you are declaring a main self-employed activity or a secondary craft activity

▷ CFE: Urssaf,
▷ Documents to provide: scan of an identity document and copy of diplomas for certain professions.

Screenshot of the type of activity declaration on Urssaf :

Social declaration and choice of tax option with Urssaf :

2) If you are declaring a commercial activity

▷ CFE: Chamber of Commerce and Industry (CCI),
▷ Registration in the Trade and Companies Register (RCS) with the Registrar of the Commercial Court,
▷ Documents to provide: scan of an identity document, declaration of non-conviction and proof of address.

3) If you are declaring a craft activity or a dual craft and commercial activity

▷ CFE: Chambre des Métiers et de l'Artisanat (CMA),
▷ Registration with the Répertoire des Métiers (RM) and the Stage Préalable à l'Installation or SPI (optional),
▷ Documents to provide: proof of identity, declaration of non-conviction, proof of address, diplomas or proof of professional experience depending on the profession.

To sum up:

From 2021, a single online platform will make it possible to carry out all the administrative procedures involved in setting up a micro-business, whatever the activity.

Stage 2: applying for Acre

Acre(aide à la création et à la reprise d'une entreprise pour les auto-entrepreneurs) is "financial assistance for people setting up orateurs ou repreneurs d'entreprise en France, qui optent pour un capital versé en deux fois au lieu du maintien partiel de l'allocation d'aide au retour à l'emploi (ARE) ". (Source: Pôle Emploi). The application has been compulsory again since 1 January 2020.

It consists of allowing you to benefit from the 50% exemption from certain social security contributions, until the end of the third calendar quarter (from the date of its creation).

You must send your application to Urssaf within 45 days of declaring your activity.

To find out about the conditions of eligibility, visit the government website.

You may also be eligible for other grants and subsidies, including :

• NACRE: nouvel accompagnement à la création ou la reprise d'entreprise (new support for starting up or taking over a business), a scheme run by the regions that provides entrepreneurs with support for 3 years, from setting up the project to financial structuring and starting up the business.
• Garantie ÉGALITÉ femmes (formerly FGIF): a national scheme dedicated to women entrepreneurs, particularly to facilitate their access to bank credit.
• the AGEFIPH Fund: a fund managed by the Association de Gestion du Fonds pour l'Insertion professionnelle des personnes handicapées (Association for the Management of the Fund for the Professional Integration of Disabled People), to help disabled people find work and keep their jobs.

Stage 3: Receipt of the SIRET

Registration, i.e. the SIRET number, is sent by Insee around 2 weeks after you declare that you are starting your business.
You can then start invoicing your customers!

Stage 4: Notification of affiliation to Sécurité Sociale for the self-employed

This takes place within 4 to 6 weeks.
It is from this stage that you can create your online account to manage your micro-enterprise via a personal portal and thus :

• make your turnover declarations
• pay your contributions
• download your certificates, etc.

Stage 5: managing your accounts

Accounting has been simplified, but it remains the foundation of any healthy business. Keep track of your cash flow, your sales and your invoicing, so you can rest easy in the event of an audit.

You can adopt software such as :

• Axonaut, which helps micro-enterprises, VSEs and SMEs with their administrative and commercial management, while automating the most time-consuming tasks.
• Wity, which offers micro-entrepreneurs personalised support throughout the process of setting up their business, as well as expert accounting and legal advice.

How much does it cost to become an auto-entrepreneur?

Registration fees for auto-entrepreneurs

If you want to become an auto-entrepreneur free of charge and online, use the links provided above and register on your own.
The registration procedure is free, with the exception of commercial agents, who must pay €24.79 to the RSAC, the special register for commercial agents.

🧐 Beware: there are websites with a false official air that will help you set up your micro-business but will charge you for advice.

If you would like help, the CFEs of the CCIs and CMAs offer an assistance service at an average cost of €60 to €90.

The PACTE Act reduces start-up costs

The PACTE law, which stands for Plan d'Action pour la Croissance et la Transformation des Entreprises (Action Plan for Business Growth and Transformation), cancels the obligation from 2019 onwards :

• to set up a dedicated bank account if you generate less than €10,000 in turnover per year for 2 years,
• take the preparatory course for setting up your own business.
  As a bonus, the cost of this course has been reduced from €250 to €194 for motivated entrepreneurs.

Tax and social security arrangements for micro-entrepreneurs

Micro-entrepreneurs are subject to the simplified scheme for sole traders. This is known as the "micro-entreprise" tax regime, and the "micro-social" regime for the payment of social security contributions.

• Calculation and payment of social security contributions:
  • social security contributions are proportional to turnover;
  • social security contributions are payable either monthly or quarterly;
  • deductions are made automatically from your account once you have declared your turnover;
  • if you don't make any sales, you won't have to pay any social security contributions!
    
• For tax and accounting purposes:
  • if you don't generate any revenue, you won't have to pay any tax either!
  • tax declaration and payment are simplified, by opting for payment in full discharge of income tax (see the box to tick on the Urssaf form above);
  • accounting is reduced to keeping a chronological income/expenditure register, with amounts, origin, method of payment and supporting documents;
  • you are not liable for VAT, known as a basic VAT exemption, up to a certain threshold.

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Finally, how do you stop your micro-business?

If, on the other hand, you wish to cease trading as an auto-entrepreneur, you must make a declaration of cessation of activity by downloading form P2-P4 auto-entrepreneur and sending it to your CFE.

You will, of course, have to declare your turnover on the closing date and pay the corresponding contributions and taxes.