The EURL, or Sole Proprietorship with Limited Liability (Entreprise Unipersonnelle à Responsabilité Limitée), stands out from the SARL due to its single-partner structure, making it ideal for independent entrepreneurs launching solo ventures. You can later bring in partners by selling shares. Here's a clear breakdown of its features and advantages, drawn from established French business practices.
The EURL functions as a SARL with just one shareholder, adhering to SARL rules with specific adjustments outlined in the articles of association. The sole owner may serve as manager—though not required—with their appointment and authority detailed in the bylaws or a dedicated document.
The share capital is set freely by the owner to match business needs. Liability is capped at contributions, except in cases of proven mismanagement, where the manager's personal assets could be at risk.
Don't confuse EURL with EIRL (Entreprise Individuelle à Responsabilité Limitée); the latter doesn't create a distinct legal entity.
Compared to other sole trader structures, the EURL offers five compelling benefits, providing security and flexibility for growing businesses.
Your liability is strictly limited to your capital contributions. Creditors can't pursue personal assets if the company falters—unless mismanagement is involved.
Only net profits (after deductible expenses like supplies, utilities, or rent) are taxed. For individual owners, it's treated as a pass-through entity under income tax; corporate tax (IS) is optional.
With one owner, operations are simpler than a multi-partner SARL. Bylaws enforce formal share transfer rules, adding stability and appeal.
Sell the goodwill while retaining or partially selling shares for smooth succession.
Managers with 5+ years of service qualify for exemptions on share sale gains, per the General Tax Code.
