Differences betweet micro-entreprise and auto-entrepreneur?
Choosing between micro-enterprise and auto-entrepreneur status can be daunting. Since 2016, these two appellations have merged into a single legally recognized status: micro-enterprise.
Choosing between micro-enterprise and auto-entrepreneur status can be daunting. Since 2016, these two appellations have merged into a single legally recognized status: micro-enterprise.
But what specific impact does this merger have? What about the status of auto-entrepreneurs now?
Micco will explain everything, so you can make informed decisions before venturing into entrepreneurship.
Before diving into these details, Micco stands as an all-in-one financial platform tailored for business creators, facilitating a comprehensive array of services. These include streamlined procedures for company registration, professional bank account establishment, capital deposit management, and more.
Micco's commitment to empowering business creators extends to:
- Effortless company registration processes
- Seamless professional bank account setup
- Convenient capital deposit management solutions
- A suite of additional financial tools and resources catered to entrepreneurs
With Micco, business creators can access a one-stop solution designed to streamline their financial operations and support their growth endeavors effectively.
Table of Contents
- What is a Micro-Enterprise (or Auto-Entrepreneur)?
- Micro-Enterprise or Auto-Entrepreneur: Can We Say Both?
- Advantages of the Fusion Between Micro-Enterprise and Auto-Entrepreneur
- Micro-Enterprise: A Unique and Simplified Regime
- FAQs
1. What is a Micro-Enterprise (or Auto-Entrepreneur)?
A micro-enterprise or auto-entrepreneur is a sole proprietor (EI) who enjoys a simplified social and tax regime.
Contrary to popular belief, a micro-enterprise is not a legal status. It is a simplified regime for individual entrepreneurs.
Thus, a micro-enterprise allows one to engage in commercial, artisanal, or unregulated liberal profession activities as an independent within certain turnover limits, namely:
- €188,700 for sales of goods, objects, food for takeaway or consumption on-site, or accommodation;
- €77,700 for service provision or liberal profession.
2. Micro-Enterprise or Auto-Entrepreneur: Can We Say Both?
Choosing to be an auto-entrepreneur or micro-enterprise as an individual entrepreneur brings several advantages.
Firstly, it is possible to combine the micro-enterprise regime with salaried employment or unemployment insurance under certain conditions.
Secondly, administrative and accounting procedures are greatly simplified.
Therefore, depending on the chosen option, the micro-entrepreneur declares their turnover received online every month or every quarter. They only pay social contributions on their turnover. Therefore, if no turnover is received during a given period, no contributions are paid.
Eligibility Criteria for Micro-Enterprise or Auto-Entrepreneur
To become a micro-entrepreneur or auto-entrepreneur, one must:
- Be of legal age or emancipated minor;
- Not already be self-employed;
- Have an address in France.
Additionally, beyond meeting the eligibility criteria to become an auto-entrepreneur or micro-entrepreneur, one can start as a student, employee, civil servant, job seeker, retiree, etc.
How to Register as a Micro-Enterprise or Auto-Entrepreneur?
To register as a micro-enterprise, simply visit the auto-entrepreneur portal and complete the online form.
Micro-Enterprise or Auto-Entrepreneur: Can We Say Both?
Yes, today the terms "micro-enterprise" and "auto-entrepreneur" are used interchangeably to refer to the same regime.
However, it is important to note that the official term appearing on all administrative documents is "micro-enterprise".
The difference between micro-enterprise and auto-entrepreneur lies in the fact that before 2016, these two regimes were simple options available to an individual entrepreneur. Therefore, there were real differences between auto-entrepreneur and micro-enterprise.
The auto-entrepreneur regime was even more simplified than that of the micro-enterprise, as it allowed the auto-entrepreneur to benefit.
If you're looking to become an auto-entrepreneur, you'll need a dedicated bank account to manage your finances. Micco can provide you with a dedicated bank account for business financial management.
3. Advantages of the Fusion Between Micro-Enterprise and Auto-Entrepreneur
Although you no longer need to agonize over choosing between auto-entrepreneur or micro-enterprise, it's natural to wonder about the benefits of merging these two statuses. Since the establishment of the sole identity of the individual enterprise, entrepreneurs starting micro-enterprises are automatically subject to the micro-social regime.
Thus, since micro-enterprises and auto-entrepreneurs merged, you can enjoy several benefits:
- Simplified creation procedures;
- Exemption from VAT base as long as your turnover does not exceed €91,900 (for accommodation or goods sales activities) or €36,800 (for service provision activities);
- The benefits of both the micro-social and micro-tax regimes.
4. Micro-Enterprise: A Unique and Simplified Regime
Since January 1, 2016, with the Pinel law, there are no longer any differences between auto-entrepreneurs and micro-enterprises. These two regimes have merged into a single identity: micro-enterprise.
Now, entrepreneurs filing micro-enterprises are automatically subject to micro-tax and micro-social regimes.
The government's desire to simplify the regimes of individual enterprises was further confirmed recently with the law of February 14, 2022, which came into effect on May 15, 2022.
Before this law came into effect, the status of the individual enterprise and the micro-enterprise regime led to a confusion of personal and professional assets of the entrepreneur. Thus, a professional creditor could repay themselves from the personal assets of the entrepreneur. If the auto-entrepreneur wished to protect their assets, they had to opt for the EIRL.
With the implementation of this law, the EIRL disappeared in favor of a new unique status for individual entrepreneurs. The individual enterprise (EI) has become the sole legal status for the micro-enterprise (or auto-entrepreneur), and the personal and professional assets of the entrepreneur are now separate.
Micro-Tax Regime
The micro-tax regime is a simplified tax regime: the taxation of the auto-entrepreneur is based on their income, after deducting a certain flat-rate deduction for professional expenses.
Thus, they do not have to deduct each expense from their income but benefit from a deduction applicable to all actual expenses.
The deduction rate varies depending on the nature of the activity:
- Service provision activity: 34%
- Auto-entrepreneur: 50%
- Goods sales activity: 71%
Micro-Social Regime
The micro-social regime is a simplified social regime, also operated through a fixed-rate withholding method. Thus, the amount of social security contributions depends on the amount of turnover received.
The auto-entrepreneur or micro-enterprise entrepreneur can choose to declare and pay their social security contributions monthly or quarterly.
Payment Release
The payment release for auto-entrepreneurs is based on income conditions. This option allows auto-entrepreneurs to pay income tax and social security contributions monthly or quarterly through a single payment.
The payment release only involves the taxation and charges related to your independent activity and does not release you from taxation on your other income.
5. FAQs
- What's the difference between micro-enterprise and auto-entrepreneur?There's no difference between micro-enterprise and auto-entrepreneur. Since 2016, these two terms have merged. The term "auto-entrepreneur" is still widely used, but the concept of micro-enterprise is mainstream and is now the only recognized identity.
- What is a micro-enterprise?A micro-enterprise is a micro-social and tax plan. It's not a company. To qualify for micro-enterprise status (and therefore the micro-plan), you need to create a legal structure: a sole proprietorship. Choosing the micro-enterprise plan is one of the options for self-employed individuals.
Now that you know the difference between micro-enterprise and auto-entrepreneur, as you prepare to embark on the auto-entrepreneur's journey, having a dedicated bank account to manage your finances is crucial. Micco can provide you with such a dedicated bank account to help you effectively manage your business finances.
As a financial services company, Micco provides comparable services and solutions tailored to the needs of modern businesses. With a user-friendly platform, competitive pricing, and a commitment to customer satisfaction, Micco is a viable option worth exploring.
Whether you're a freelancer, startup, or established enterprise, Micco offers the tools and support needed to streamline financial operations and drive business growth. Check out Micco today to discover how it can complement your business banking needs.
