Which legal form to choose for your new company?

The first element to be developed and explored in business creation projects is your idea. For this, you need to define the details of your ambition. Later on, detailed information about your personal and professional situation will help you to determine the most suitable legal form for your needs and expectations.

Choosing a legal form according to the nature of your project

Your start-up represents your prospects which may be generated by business opportunities or new product launches and guides you in formulating a business plan. In order to express all the details of your research, it is advisable to check your market potential in advance, as this will give you a clearer idea of how long your growth phase will last and how fast your business’ structure can evolve. Your market research will also be your best way of measuring the viability of your future business. It should be able to show prospective entrepreneurs whether your project will create demand or meet existing consumer needs. If the market study confirms the project's potential for success, the phase of writing the business plan can begin, which will indicate the choice of legal form.

Choosing the legal form according to your personal situation

The chosen legal form must take into account your personal situation. This will help you better assess your priorities, such as defending your children and protecting your property even if things go wrong. In addition, the legal form you choose will ensure that you have a higher or lower level of social security. If you explain new activities as the main source of long-term income, it is advisable to consider a status that allows you to make an appropriate contribution to retirement.

Choosing a legal form according to your professional situation

Your current employment status will be an important criterion for your choice of legal form. For example, in France, if you register with the “Pôle Emploi” and receive an AER within a certain period of time, the EURL status may not suit you as well as a SASU type company. Obviously, the number of employees working with you on your project is a criterion to be considered. Your choice of legal form will also depend on how you see this new activity, whether it is just a way to earn more income, or whether it is a way for you to do everything you can to earn a living.

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