Choosing Your Legal Structure: The Complete 2026 Decision Tree

Quick answer. The choice of legal structure rests on four questions: are you alone or with partners? do you want to protect your personal assets? which social regime do you prefer (self-employed or salaried-equivalent)? do you plan to raise capital? Depending on your answers, the decision tree points to the micro-enterprise regime, the sole trader (EI), the EURL, the SASU, the SARL or the SAS. No minimum capital is required (except €37,000 for the SA), and taxation falls under income tax (IR) or corporate tax (IS) depending on the form and the option chosen.

Six main options structure business creation in France, each with its own director social regime and tax treatment. The micro-enterprise is a simplified regime of the sole trader, not a separate legal form.

The 2026 micro-regime thresholds (revalued for 2026-2028) rise to €203,100 for the sale of goods and accommodation, and €83,600 for services and liberal professions. The VAT exemption threshold remains €37,500 (services) and €85,000 (trade) in 2026.

Step 1 — Are you alone or with partners?#

• Alone → go to step 2.
• With partners (two or more) → go to step 4. The choice will mainly be between SARL or SAS.

Step 2 — Do you want limited liability?#

• No, I am simply starting out → the sole trader (possibly under the micro regime) is enough. Since 2022, business assets are separated from personal assets by law, which softens the risk. Go to step 3.
• Yes, I want a company → choose between EURL and SASU. Go to step 3b.

Step 3 — Micro or actual regime (sole trader)?#

Step 3b — EURL or SASU?#

The tie-breaker is mainly the social regime and the remuneration strategy. In an EURL, the managing partner is self-employed: lighter contributions, more limited social cover. In a SASU, the president is salaried-equivalent: better cover (excluding unemployment), but higher contributions. Our detailed SASU vs EURL comparison and the dividends vs salary trade-off clarify this choice by remuneration level.

Step 4 — With partners: SARL or SAS?#

• You plan to raise funds, issue preferred shares, bring in investors → SAS: statutory freedom eases bespoke governance and the issuance of securities.
• You want a regulated framework that protects minorities, with a possible IR option → SARL (the family SARL allows an unlimited-duration IR option).

Take an independent consultant earning around €60,000 of annual profit. In an EURL under income tax, the whole profit bears income tax and self-employed contributions — lighter, but with reduced social cover and pension. In an EURL under corporate tax or a SASU, the consultant can draw a salary and leave part of the result in the company, taxed at the corporate rate (15% up to €42,500 of profit). The SASU provides salaried-equivalent cover, at the cost of higher contributions; at equal remuneration, the self-employed EURL remains cheaper. The right trade-off depends on the need for social cover, the wish to reinvest, and the prospect of opening the capital. For this profile, a three-year model — including the dividends vs salary trade-off — almost always settles the debate.

Freelancer or consultant. Below the thresholds, the micro-enterprise remains the simplest route. Above them, the EURL or SASU secure liability and allow real cost deduction.

Project with partners and investors. The SAS stands out for its flexibility; to understand its mechanics, see our characteristics of the SAS.

Switching from one form to another. A conversion from EURL to SASU is common as the project grows; still, it is better to aim right from the start.

Regulated activity. Some professions (health, law, accountancy) require dedicated forms (liberal practice companies): check your framework before deciding. To compare figures and regimes, our detailed comparison of the forms and the complete creation guide complement this tree.

• The social regime is chosen at incorporation and is hard to change: weigh self-employed against salaried-equivalent before signing.
• Corporate tax is not always more advantageous: at low remuneration, income tax and the self-employed regime can cost less.
• The reduced 15% corporate tax rate applies on profits up to €42,500 (25% beyond) — a useful benchmark for the remuneration/dividend trade-off.
• Exceeding a micro threshold for two consecutive years switches you to the actual regime: anticipate this accounting change.
• A "default" status chosen without thought is costly to fix: later conversion involves formalities and sometimes cessation taxation.

As a French chartered accountant registered with the Ordre des experts-comptables and a statutory auditor, we guide many founders each year through this foundational choice. Recently, three partners of a consulting agency were tempted to each operate as a sole trader for simplicity. Yet the activity rested on high-liability services and a shared client account: separate ownership exposed their assets and complicated invoicing. We recommended an SARL — mutual protection, a neutral IR option in the early years, then a possible shift to an SAS if fundraising arose. The extra incorporation cost was negligible against the security gained.

The lesson is simple: the cost of incorporation is never the real issue. It is the trajectory — solo or multi-partner, profit or fundraising, regulated sector or not — that dictates the form. A good initial choice avoids years of friction.

Hayot Expertise advice. Before filling in an online form, answer the four questions of the tree: solo or with partners, asset protection, social regime, fundraising. Have the two or three credible scenarios modelled (social cost, tax, net pay) over three years: the gap is often decisive. Our business creation support includes this quantified trade-off, the drafting of the bylaws and first-year follow-up, alongside your chartered accountant in Paris.