Advice on starting an international online teaching business in France

[Jethro]

Hi there

Interested hearing from you

regarding a few questions about a company we are starting.

Background

I am 22 and have been living

in France for about three years, I am currently registered as an auto entrepreneur and have a French bank account etc.

About the company

We provide an online

language learning platform specifically for people in Europe to learn

to speak and write English through online courses with other

native English speaking teachers.

The company is 100% online and

we simply connect the teachers with the students while charging a

percentage of each lesson for administrating the lessons, course-ware and payments.

The teachers come from all

over the world.

Questions

Q1 -

We are starting small but expect to exceed the annual revenue limit for

Auto-entreprenures (€32,600). Due to our low profit margins we have to move to

an EURL registration so that we are taxed on our profits instead of

total revenue (which would kill our business).

Has

anyone had any experience with the different business structures in France (EURL, SARL etc...)?

I'm specifically interested to know what

the hidden costs are and whether I can navigate the registration

process my self without paying accounting and legal experts as our

business is bootstrapped with very little (read "no") expendable capital.

Q2-

This quote from an article

entitled "The pitfalls of France's auto-entrepreneur status" got me concerned... it reads:

Although some employers, especially English teaching

academies will push you to be an auto-entrepreneur, you should be

wary, lawyer Jean Taquet tells The Local.

“The government knows a lot of language schools

employ teachers on an auto-entrepreneur basis when really they should

be putting them on their payroll. These teachers can suddenly get

caught in the crossfire when authorities decide to audit a school,”

Taquet says.

“The government is using auto-entrepreneurs (AEs)

as bait to go after the companies,” he adds.

Andy Denison, who runs an

advice website for Anglophones on all things administrative adds:

“We have known of a couple of companies who were only employing AEs

when really they should have had salaried people on their books and

these businesses have been caught out.”

Under the rules of being an auto-entrepreneur you

should have more than one client paying you for your services,

because if you don’t then really you should be on a contract and

the auditors will be looking out for this.

“If you are constantly working for someone or

especially if you sign some kind of exclusivity agreement with them,

then that will be an issue with authorities,” Denison warns.

We make

it very clear in our Terms of Service that we are not employing teachers, we are simply providing a platform for the teachers to

manage and interact with their students as well as a service to

manage their payments.

So my question is how exactly will this work,

we are not employers, we are service providers and the last thing we

need is to be heavily fined and taxed on our already low profit

margins.

-----

Interested in hearing from

anyone who has walked a similar path, what were the pitfalls, what

should we be looking out for? Any resources or articles would also be

very much appreciated.

Thanks for your time,

Jethro.

[Chancer]

Under the rules of being an auto-entrepreneur you should have more than one client paying you for your services, because if you don’t then really you should be on a contract and the auditors will be looking out for this.

“If you are constantly working for someone or especially if you sign some kind of exclusivity agreement with them, then that will be an issue with authorities,” Denison warns.

 

Without going back and trawling through all the paperwork I dont think there is any such rule, or indeed any "rules" as such other than the chiffre d'affaires and business categories, necessity of registration with certain authorities etc.

 

There are no auditors that go through AE's déclarations, there is nothing to audit, those auditing the clients account would est themselves against their own client by challenging it, in any case its the employer that should be fearfull of the conséquences.

 

The more something is repeated on the net the more it becomes legitamised in peoples minds, it doesnt mean that it is true.

[EuroTrash]

The more autonomy your teachers have, the better it fits with the spirit of the rules. If the teachers are working from home and can choose which students to accept and when and what to teach them and negotiate their fees, and importantly send you invoices, and do other work as well when they're not working for you, that's good indications that they'd be considered self employed. If they worked for you all day every day, and you gave them a timetable of who to teach when and what to teach them and pay them a salary at the end of the month,, that would not look good. But presumably you will not be doing that.

Basically it sounds like you are like a jobs site like twago, peopleperhour, freelancer.com etc. True to form the French govt has said it would like to be able to impose obligations on them like it's going after airbnb and uber, but in their dreams, IMHO it's just not going to happen.

[Jethro]

Great, fantastic information... thanks a lot guys. One of the main advantages of using our service is the autonomy.

So our users (teachers) do pay their taxes wherever they are, and as you mentioned importantly, they do invoice us with all of their legal information etc...

The teachers are offered students but are not obliged to accept them and this is all handled in the back end by our Admin team.

Our prices are fixed (not set by our users).

As for whether or not our users are engaged in other employment (in supplement to our company), how can I have control over that??

I have heard of cases (Homejoy.com) where companies have been taken to court because their users (independent contractors) were being trained by the company.

We provide informal training on how to use the teaching platform and offer curriculum "suggestions" but this is not required as the teachers are encouraged to use their own creativity in coming up with course subjects and material.

This is all well, but I am still confused about how the company should be structured, my main concern is that we are not taxed on our TOTAL income for example...

A customer purchases a one hour live lesson for 29.90EUR. We take 7EUR for administration and payment processing fees.

At the end of the month we can't get charged 20% of that 29.90 eur (5.90) because it will wipe out our earnings.

Because we are an internet start up one rout I am actively looking at is registering the business in Andorra but have no clue whether or not that is viable.

Best regards!

[EuroTrash]

"This is all well, but I am still confused about how the company should be structured, my main concern is that we are not taxed on our TOTAL income for example...

A customer purchases a one hour live lesson for 29.90EUR. We take 7EUR for administration and payment processing fees.

At the end of the month we can't get charged 20% of that 29.90 eur (5.90) because it will wipe out our earnings."

Exactly. So don't register as a micro entreprise, simples. Micro is the only statut that works like that.

If you live in France you have to register your business in France. Registering a business in Andorra or any other country will not meet your legal obligations, as a person who lives and works in France, to contribute the French social security system.

[Jessica Wilkins]

Yeah true.