Which Legal Status to Choose When Opening a Restaurant?

Are you planning to open a restaurant but unsure which legal structure to choose? Here, we present the various options available to you, aiming to make this step stress-free!

The legal aspect of business creation is based on four fundamental decisions:

• The legal form
  
• The tax regime (income tax for individuals, or corporate tax for legal entities).
  
• The social security regime (employee of your company to be affiliated with social security, or self-employed worker, who then falls under the social security regime for independent workers).
  
• The liability of the manager(s) (unlimited in the case of a sole proprietorship, or limited for companies and EIRLs).

Choosing Your Legal Structure

This step truly materializes your project, bringing it to life. Numerous legal structures exist. To choose the right one, it is essential to project yourself into the future and consider the long-term evolution of your restaurant. The tax implications, which vary depending on the chosen legal structure, must also be evaluated.

For more information on this topic and to make the right choice, it is advisable to consult a legal expert specializing in these matters.

Three legal structures are generally favored by individuals embarking on opening a restaurant:

• The SARL (Limited Liability Company): This is the form most favored by restaurateurs. It comprises a minimum of 2 partners. The created entity is a legal person. In the event of bankruptcy, only the amount of the SARL's capital can be claimed. The restaurateur's private assets cannot be seized (except in the case of gross negligence on their part). The company's share capital is formed by the contributions of the various partners. A general meeting must be organized annually among them.
  
• The EURL (Single-Member Limited Liability Company): This is an SARL with the same characteristics, except that, as its name indicates, it has only one partner.
  
• Sole proprietorship: The restaurateur manages their business alone; it is not considered a company. The entrepreneur's personal assets are commingled with their professional assets. In the event of bankruptcy, their private assets can therefore be seized. The profits generated by the restaurant are part of the restaurateur's income and are subject to income tax.

There are two other types of legal structures, but these are less frequently chosen: the SA (Public Limited Company) and the SAS (Simplified Joint-Stock Company), as these legal structures are generally reserved for very large-scale projects.

Business Creation Formalities

The restaurateur must apply for registration with the Trade and Companies Register to operate their restaurant. Depending on the chosen legal structure, various formalities must be completed:

• Register your restaurant with the RCS (Trade and Companies Register).
• Declare the creation of your business to your CFE (Business Formalities Centre). This body registers companies and transmits the relevant information to the various concerned administrations.
• Finally, registration with the RNE (National Register of Companies) ensures your registration with URSSAF (among other bodies).
• Following this, the Commercial Court Registry registers the activity, and the entrepreneur receives their official "K-bis extract," formalizing the commencement of operations.