You are already working in real estate and wish to start your own business or are considering a professional reconversion by setting up your own real estate agency?
You should know that your job will not be limited to that of a real estate agent. You will also (and above all) become a business leader, which will become apparent as soon as your company is created.
As an entrepreneur, you will have to start by choosing the legal status of your future real estate agency. Please note that each legal status has specific tax and social consequences and accounting obligations. It is better to know this before choosing a particular status.
In this article, you will find an overview of the possible legal statutes for creating a real estate agency. We will detail for each of them their advantages and their limits in order to help you make the right choice.
Table of Contents
- Create a real estate agency as a micro-entrepreneur :
- Create a real estate agency as a sole proprietorship :
- Create a real estate agency under the legal status of EURL or SARL
Create a real estate agency as a micro-entrepreneur :
You can create your real estate agency with the status of micro-entrepreneur (ex auto-entrepreneur). This status is very interesting because of the simplicity of its implementation and the few administrative steps it requires. It also allows you to benefit from reduced social charges and you will only pay taxes on a part of your turnover.
However, be careful, this status also has some notable disadvantages. First, the limitation of the turnover: the annual income ceiling is indeed, since January 1, 2018, 70,000 euros. A figure that has doubled compared to 2017 and should suffice initially. Eventually, however, this ceiling may prove to be a brake in the development of the activity.
Remember that this ceiling corresponds to the maximum amount of your turnover excluding taxes. It is therefore the total income that you will have received (percentage on sales) without any deduction of the costs incurred by your activity (transport costs, office equipment, possible premises, communication and advertising costs, etc.).
With this legal status, you will depend on the Social Security for the Self-employed (ex-RSI).
Another parameter to take into account is that the status of micro-entrepreneur is a particular regime of the Individual Company, you cannot have partners. It is therefore up to you to decide whether this is suitable for you or whether you want to create a large agency with one or more partners.
Last point to know: the status of micro-entrepreneur will only allow you with difficulty to employ an employee. You would have to pay him/her, pay salary and employer’s contributions (without forgetting your own income), without exceeding the turnover ceiling. Not impossible but difficult…
Create a real estate agency as a sole proprietorship :
The sole proprietorship is a status frequently adopted by people wishing to open a real estate agency since it is a legal form very well suited to low-risk activities requiring limited investments: nearly a third of those wishing to open a real estate agency choose to set up their own business under the status of sole proprietor.
The simplicity of the steps can only seduce: no minimum contribution required taxation via income tax since the manager’s remuneration is included in the company’s profit and therefore taxed with it As in the case of the micro-entrepreneur status, the social security system is that of the Sécurité Sociale des Indépendants (ex-RSI). The main disadvantage of the status of Sole Proprietorship is, as in the case of the status of micro-entrepreneur, the impossibility of having one or more partners. You should also be aware that the status does not protect your assets: the manager allocates part of his personal assets for the constitution of the company and for the constitution of its assets. There is therefore no distinction between the company’s assets and the entrepreneur’s assets. Consequently, if your agency ever encounters financial difficulties, your creditors could recover the sums owed to them by dipping into your personal assets.To avoid this situation, you can opt for the regime of the Limited Liability Sole Proprietorship (EIRL), which is totally identical to the EI but which provides protection for your personal assets.
Create a real estate agency under the legal status of EURL or SARL
The limited liability company (SARL) allows the creation of a company with several partners (up to 100). Creating a real estate agency in SARL is the status most frequently chosen by the actors of the profession.
This legal form has many advantages: a simple structure no minimum contribution, but your contribution must still be substantial enough to create a climate of trust with your commercial and financial partners a liability of the partners limited to the amount of the contributions
Please note: the partners are required to pay 20% of their contribution at the incorporation of the LLC. The rest will follow within 5 years after the creation of the company.
The capital of an LLC is divided between at least two partners. It is managed by one or more managers of the company partners or not.
From a fiscal point of view, the company is taxed via the Corporate Tax (IS). The managers depend on the Social Security for the Self-Employed when they are the majority, and on the General Regime when they are the minority.