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auto or ltd business


johnycarper

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We have friends coming to live in France and start their own business and I have advised like us go down the auto route,but having spoke to an accountant they have been told consider a ltd company as well.My view was that as they will not achieve over 35k euros a year with a fishing business an auto is a lot simpler any thoughts out there I can show them,

Thanks
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Good grief johny that's not a question that people on a forum can answer without knowing anything about the business beyond that it's 'a fishing business'. For a start there is no exact equivalent to ltd company in France, are you talking about a SARL? SAS? or what?

But in very simple terms, if the outgoings - overheads, expenses, staff wages, investment - are going to be more than approx 30 per cent of turnover for services and something like 70 per cent for resellers, auto entrepreneur is the wrong régime because you pay charges as a percentage of turnover not profit. And those are the nominal figures that have been built into the scheme to allow for business expenses.

Eg. a high overhead business on AE: turnover 36k, cotisations and charges 9k, leaves 26k, overheads and expenses and investment 20k, leaves 6k, not looking good is it?

On a réel basis, 36k turnover, minus 20k expenses, leaves 16k profit, charges on 16k profit, I don't know but I doubt it would be 10k.

AE is only good for businesses with very low overheads.
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