An EURL is the single-member form of the French SARL private limited company: a company with just one shareholder. It particularly appeals to retailers who want to work alone while creating a legal entity separate from themselves. For an esoteric shop with stock, premises, investments and plans for ongoing activity, it deserves serious comparison with EI and SASU.
A company with one shareholder
An EURL can be formed by an individual or another legal entity. There is no statutory minimum share capital. On formation, at least 20 % of cash contributions must be paid in, with the remainder paid within the legal deadline.
The shareholder's liability is normally limited to their contributions. This protection does not remove all liability: management misconduct, personal commitments or guarantees given to a bank can change the director's exposure.
The sole shareholder-manager comes under the self-employed regime
In the most common arrangement, the sole shareholder is also the manager. They are then treated as self-employed for social security purposes. Unlike a SASU president, they may owe minimum social contributions in certain situations even without remuneration.
This system can result in lower social charges than those for a manager treated as an employee at comparable remuneration, but the social protection and calculation methods differ. Do not compare only a headline contribution rate.
Income tax or corporate tax: a key EURL choice
When the sole shareholder is an individual, the EURL is normally subject to personal income tax, with an option for corporate income tax. Under corporate taxation, the shareholder-manager's social contributions are calculated in particular on remuneration and, under applicable rules, on part of certain dividends above a specified threshold.
Make this decision using financial forecasts. A shop that needs to retain some profit to replenish stock, finance a second product category or fit out premises has different needs from a sole trader who wishes to withdraw most profits immediately.
Company accounts and formalities
Creating an EURL means accepting more formalities than an EI: articles of association, share capital, sole shareholder decisions, annual accounts and company-specific obligations. Include accounting support in the business plan from the start.
These formalities also provide a clearer structure when the shop deals with a bank, landlord, trade suppliers or plans to hire. They also make it easier to become a SARL if new shareholders join later.
EURL or SASU for an esoteric shop?
The main differences are the manager's social security status, remuneration, taxes, future shareholder needs and desired flexibility. A SASU offers more flexible company rules and a president treated as an employee; an EURL follows the more defined SARL framework, with a shareholder-manager generally treated as self-employed.
Before choosing, calculate how much remuneration the shop can truly afford after purchasing, rent, payment fees, advertising and replenishment. Our articles on break-even turnover and working capital requirements (BFR) provide the necessary financial framework.
Official sources
Service-Public Entreprendre — EURL: what you need to know · Service-Public Entreprendre — social protection for company directors · impots.gouv.fr — corporate income tax