Protecting your personal wealth as a company director: the 7 levers

Quick answer. Running a business exposes the director's personal wealth to several risks: debts, guarantees, liability claims. Seven levers help guard against them: choosing a limited-liability form, benefiting from the separation of assets (automatic for sole traders since 15 May 2022), protecting the main residence (seizure-proof by law against professional creditors), declaring other land assets seizure-proof, adapting the matrimonial regime, controlling personal guarantees, and structuring wealth (holding, SCI, dismemberment, insurance). No lever is total: it is their combination that protects.

Running a business means taking risks that can spill beyond the professional sphere. An unpaid debt, a called personal guarantee, a sanctioned management fault, and it is the director's personal wealth — their home, their savings — that can be reached. Protection cannot be improvised on the day of trouble: it is organised in advance, in calm times.

The good news: French law has strengthened the protection of entrepreneurs in recent years, notably with the separation of the sole trader's assets. But no measure is absolute, and some common practices (the personal guarantee, for instance) can pierce every protection. Here are the seven levers to know, which we use within a coherent director's wealth management.

The first shield is the choice of structure. A limited-liability company (SARL, SAS) in principle confines the risk to the contributions: the company's creditors cannot, save for exceptions, reach the partners' personal wealth. This is a major difference from unprotected sole practice. This choice is decided from the start, as we explain in our guide to choosing your legal form.

Since the law of 14 February 2022 (no. 2022-172), in force on 15 May 2022, the sole trader benefits from an automatic separation of their professional and personal assets, with no formality. Creditors whose rights arise from the professional activity can in principle seize only the professional assets. This is a major advance, bringing the sole proprietorship closer to a company on the protection front, as we detail regarding the new sole-trader status.

The sole trader's main residence is seizure-proof by law against professional creditors (Article L526-1 of the Commercial Code), with no prior declaration. Where part of the property is used professionally, the non-professional part remains seizure-proof by law. Note, however: this protection does not apply against creditors whose debt is not professional (for example the loan used to acquire the home), nor in case of fraud.

Beyond the main residence, the entrepreneur can make their other land assets (built or unbuilt, not used professionally) seizure-proof, through a declaration of seizure protection drawn up by a notary (Article L526-1 of the Commercial Code). It is a simple tool to shelter a second home or a plot from future professional creditors.

The matrimonial regime governs the couple's exposure. The regime of separation of property protects the spouse and their own assets from the entrepreneur's debts, where community property exposes them more. Adjustments (clauses, change of regime) can reinforce this protection. This often-neglected choice deserves dedicated advice, alongside the notary and legal advice.

This is the most underestimated point. A personal guarantee given to the bank or a supplier pierces limited liability: even as a partner of an SAS, the director who has guaranteed an engagement commits their personal wealth. The good practices:

• Limit the amount and duration of the guarantee, and avoid unlimited guarantees.
• Prefer, where possible, guarantees on the company's assets (pledge, lien) rather than on personal wealth.
• Know the legal protection: a guarantee manifestly disproportionate to the guarantor's income and assets is, since the 2021 reform, reduced to the amount the guarantor could assume (Article 2300 of the Civil Code).

Finally, structuring and insurance complete the framework.

• Compartmentalise risks via a holding and subsidiaries, and separate real estate from operations (an SCI holding the premises, holding through dismemberment).
• Insure: professional liability, protection cover (death, disability), "key-person" insurance, the business-owner's social guarantee.
• Anticipate the transfer through gifts and wealth optimisation, consistent with the director's IFI.

The director married under community property. Common assets are more exposed; a change of regime or adjustments may be relevant, to examine with the notary.

The director who acts as guarantor. Even protected by the corporate form, they expose their personal wealth through the guarantee. This is often where real protection is decided.

The sole trader. The separation of assets is automatic, but the entrepreneur can waive it for a specific commitment at a bank's request: be cautious about the scope of such a waiver.

• The guarantee cancels the other protections. An unlimited personal guarantee makes limited liability pointless: this is the first thing to watch.
• Seizure protection has limits. It does not apply against non-professional creditors nor in case of fraud or serious breach.
• A management fault commits the director. In an insolvency procedure, the shortfall of assets can be charged to them: wealth protection does not cover faults.
• Arrangements must be real. An artificial, substance-less structure can be set aside. Consistency prevails.
• Anticipate, do not react. Protections set up in a hurry, after trouble, are often unenforceable.

Recently, an SAS director believed his personal wealth was fully sheltered by limited liability. The review revealed that he had given several joint and several personal guarantees to banks, with no time limit: his corporate protection was, in practice, pierced. We worked on two fronts: renegotiating and capping the guarantees, and organising the protection of the main residence and the real-estate portfolio. Limited liability only made sense once the guarantee question was addressed.

Our conviction, as accountants registered with the Ordre, is that protecting a director's wealth rests not on a single lever but on their coherent combination. The corporate form, the matrimonial regime, control of guarantees, seizure protection and structuring complement one another. And it all plays out upstream: protection is organised in calm times, when all is well, never in the urgency of trouble.

Hayot Expertise advice. Run a diagnosis of your real exposure. First question: have you given personal guarantees, and to what extent? This is often the main weak point. Then check the protection of your main residence and other assets, the suitability of your matrimonial regime, and the consistency of your structuring (holding, SCI, insurance). No lever suffices alone: it is their articulation that protects. And organise all of this in calm times, with your adviser and notary, not the day trouble strikes.