To find talent, a new trend is to look for experts in the pool of micro-entrepreneurs. Working with a micro-entrepreneur often appears as an ideal solution because it removes the company from administrative procedures that are often complex and it allows them to find experts who can carry out quality work without the need to recruit what often proves to be time-consuming.
The law of August 4, 2008 instituted the status of auto-entrepreneur which, later, was merged with the tax status of the micro-enterprise. In fact, today we are talking about the micro-entrepreneur regime and no longer the auto-entrepreneur since January 1, 2016. Many companies call on micro-entrepreneurs without really checking the risky potential. Either, the creation of the statute of the legal limits not to be crossed under penalty of being sanctioned.
What is a micro-enterprise?
A micro-enterprise is a sole proprietorship registered in the Directory of Trades or Trade and Companies Register. A micro-entrepreneur remains responsible for his professional acts and commits, in principle, his personal and professional assets, he therefore has unlimited liability. However, he can decide to limit his liability by making a declaration of exemption from seizure before a notary or by opting for the EIRL regime to constitute a heritage of assignment, dedicated to the professional activity.
What are the requirements for this micro-entrepreneur?
The regime for the business project, the craftsman or the liberal wishing to create or develop an activity. This activity must be subject to the micro BIC (industrial and commercial profits) or micro BCN (non-commercial profits) regime for the beneficiary of the VAT exemption. Not all activities are concerned because the eligible activities are grouped into three categories: sales activities, service provision activities and liberal professions.
Finally and surprisingly, micro-entrepreneurs must respect thresholds of turnover collected per year; for 2017 (to calculate pro rata temporis):
• €82,800 for the manufacture of a product from raw materials or resale, for the sale of foodstuffs to be consumed on site and for the provision of accommodation services (sales activities)
• 33,200 euros for the provision of services, resale of intangible assets, labor for real estate and furnished rentals (service provision activities and liberal professions)
With a scheme intended for broad application because it can apply to employees, civil servants who want to combine activities and retirees (from the general scheme, the agricultural scheme, the RSI, the CIPA).
What are the activities that may not be carried out as a micro-entrepreneur?
Certain activities are legally excluded from the status of micro-entrepreneur:
• Agricultural activities attached to the social system of the MSA: farmers, gardening, etc…
• Self-employed activities covered by a pension fund other than Cipav or RSI: legal and judicial professions, health professions, general agents and insurance agents, experts and competent commissioners, etc. …
• Relevant real estate VAT activities: property dealers, developers, real estate agents, etc.
• The location of durable materials and consumer goods and the location of unfurnished or professional buildings.
• Artistic activities, remunerated by royalties, which depend on the house of artists or Agessa.
Activities that are presumed to be performed for wages. Since the realization of a benefit and the payment of remuneration, the law considers that those who exercise the following professions are wages:
• sales representatives (L7313-1 of the Labor Code);
• journalists, including press agency photographers (L7112-1 of the Labor Code); • performing artists (L7121-3 and 4 of the Labor Code); • models (L. 7123-3 of the labor code), exception for models established in the EU (L. 7123-4-1 of the labor code); • homeworkers (L 7411-1 of the Labor Code).
Nota Bene: Bloggers who keep their invoices for an online press service can carry out a micro-entrepreneur activity.
There are also activities that it is advisable to carry out under the micro-entrepreneur regime:
- In-store trade:
VAT is not recoverable on the cards that the entrepreneur will have to make. Taxes and contributions are calculated on the basis of business collected, charges and expenses (rent, electricity, water, etc.) and are not deductible.
- Activities that require wages:
The amount and the contributions are calculated on the total business without the possibility of deducting the salary codes (salaries, social security contributions on salaries, etc.).
- Activities requiring investment:
VAT is not recoverable and it is not possible to amortize investments.
- Activities that require intra-community relations:
The micro-entrepreneur must pay VAT on dealers imported from third countries more than the possibility of indebtedness, which leaves the case for operations carried out on French territory.
The excesses of the status of micro-entrepreneur
While the majority of companies have micro-entrepreneurs work according to the rules of the art, abuses also exist: Use of auto-entrepreneurs for permanent positions in the company, recruitment of “false self-employed”, use of the micro-entrepreneur in a “super trial period” to exempt themselves from the rules of labor law and social charges. Jurisdictions regularly recall the boundary between self-employment and declared and unauthorized wages to penalize unscrupulous employers.
Beware of the risks of requalification
For the Court of Cassation “the existence of an employment contract does not depend on the will of the parties, nor on the qualification given, more than on the conditions of the fact under which the activity of the worker is due. » It is advisable to check that there is no link of subordination and with the situation according to a bundle of clues.
The questions to ask are:
• The decision to practice as a micro-entrepreneur corresponds to a personal project or to this status imposed by the client?
• Does the entrepreneur have the tools/materials necessary for his mission?
• Can the entrepreneur organize his work at his convenience, decide how, when and where to provide his services?
• Does the contractor have to comply with instructions, deadlines or periodic reports?
• Does the contractor work for several clients?
• Is there a service contract between the contractor and the client for each assignment?
• Is the invoice “to the mission” or in the name of hours or days?
• Is the client the contractor’s former employer? If so, does he carry out an activity close to or identical to his former salaried activity with his former employer?
In the case of a hostess intervening at an event, with the status of micro-enterprise, on whom the client imposes fixed hours and a fixed place, it will be necessary to check whether she works for many clients within the framework service contracts, whether they use equipment, etc. …The indices are based only on the hours and place of work imposed and are not sufficient for the work relationship to be requalified as a salary.
The objective is to prove that the entrepreneur acts independently, without a link of subordination and within the framework of a commercial and contractual relationship negotiated between the parties.
The requalification of the employment relationship may be requested:
– by the micro-entrepreneur, to seize the industrial tribunal,
– or by the administration (labour inspector, Urssaf, tax services for example), which the public prosecutor then seizes.
Uber: the controversial case!
Regarding Uber, the case is legally complex! The drivers are generally micro-entrepreneurs and must go through the platform (or mobile applications). However, the courts tend to come back to the qualification of the employment relationship. In the United States, on June 16, 2015 (Uber Technologies Inc. v. Barbara Berwick), a court in San Francisco ruled that Uber drivers are not worth more than their self-employed employees. Same decision rendered by the London Labor Court on October 28, 2016 (Y Aslam, J. Farrar, c/ Uber BV, Uber London Ltd, Uber Britania Ltd). In France, the Ussaf of Ile-de-France has launched actions against Uber before the Court of Social Security Affairs and in criminal proceedings for concealed work. Proceedings are pending before the Labor Court. Business to follow! It is therefore important to follow the legal news on the evolution of this status as well as their legal limit. From this moment, you will appeal to micro-entrepreneurs who are looking for a service or to build a relational platform. Always ask yourself the questions we have set out above at the risk of being sanctioned one day.
If you believe that the company has voluntarily sought its obligations as an employer, this constitutes fraud constituting the offense of concealed work (article L. 8221-5 of the labor code). The employer then risks a prison sentence of up to 3 years as well as a fine of 45,000 euros. These penalties may be doubled in the event of a repeat offence. The employer will have to pay salaries and social contributions on the basis of an equivalent position in the company. This regularization is retroactive and begins on the first day of the employment relationship. The micro-entrepreneur can also request the verdict of the indemnities in the event of the termination of the employment relationship. In addition, those who must be micro-entrepreneurs may be ordered to reimburse social benefits or unemployment benefits that may have been reached.