What is a Sole Trader?
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This legal form concerns natural persons wishing to carry out commercial, professional or craft-based activities without creating a company.
The advantages of being a sole trader
As a sole trader, you can start your business quickly and easily, without the constraints of forming a company (drafting Articles of Association, publication formalities) and without having to set aside a minimum amount of capital.
Management as a sole trader is not subject to the same formalities as companies (having to deposit accounting documents with the Trade and Industry Registry and even having to appoint auditors under certain conditions).
Points you should take into account
- The entrepreneur's personal assets are not safe from the risks inherent in their business
- Commercial capacity is required for commercial activities
For this reason, persons that, due to their individual or professional status are precluded from carrying out commercial activities as a professional, such as minors, adults under guardianship or curatorship, civil servants and lawyers cannot set up as sole traders.
Similarly, persons prohibited from carrying out commercial activities following a judgment declaring personal bankruptcy cannot set up as sole traders (art. 587 of the Code de Commerce ).
For commercial activities, the business must be run from commercial premises (commercial lease, short-term lease or temporary tenancy agreement).
For non-trading activities (the licensed professionals for example), the business should be domiciled at office premises.
The sole trader may work from their home if no legislative, regulatory or contractual provision is opposed thereto, if their business activities do not require clients to be received, if storage is not necessary and if no staff are recruited.
It is possible, under certain conditions, to domicile the firm either with a domiciliation company for a period limited to one year (may be renewed once) or on premises occupied by another firm.
See the factsheet: "Domiciling a business activity or establishing a company's registered office "