5. Business Structures in France
- Types of Legal Structure
- Sole Trader
- Limited Company
- Status of Spouse/Partner
5.4. Status of Spouse/Partner in a Business in France
5.4.1. Introduction
It is obligatory for a spouse (or civil partner) who works regularly in the family business to choose a legal business 'statut '.
At one level the objective of this requirement is to provide some legal protection for the spouse, who might otherwise be left in a difficult situation following a divorce, death or invalidity of their partner.
Without any particular business status the spouse is a 'dependant' of the business owner. Although this does ensure they have health cover, it only entitles them to the most basic pension rights, a factor which is growing in importance to international owners of French property, due to the number of younger families relocating to France.
At another level the obligation to have a statut is also about controlling undeclared labour, for where the spouse works regularly for the business, but their role is not declared, the business can be subject to a fine and penalties. Indeed, it is possible for the authorities to re-qualify their status as salaried.
Whether the participation in the business is 'regular' does not depend entirely on the number of hours/days worked by the spouse, but whether they play a direct, tangible part on a professional, habitual basis.
5.4.2 Choice of Status
If the choice of the status of the business owner is relatively easy to determine, since it depends largely on the legal form of the business, the choice of status of a spouse is not always so obvious.
This is because there are three different 'statuts' for a spouse, as follows:
Collaborating partner - Conjoint collaborateur
Salaried employee - Conjoint salarié
Shareholder - Conjoint associé
The fourth option, which is to have no legal business status at all, is only possible if the spouse does not take part 'on a regular basis' in the running of the business.
Neither is the choice of statut entirely at the discretion of the spouse. While the status of _conjoint salarié _is open to all businesses, the conjoint associé is reserved for limited companies, and a _conjoint collaborateur _is only possible in a sole trader business, or in limited companies with less than 20 employees.
5.4.3. Conjoint Collaborateur
This is by far the most widely used form of business status for spouses, primarily because it enables them to obtain pension and maternity rights without the need for a remuneration to be paid. Indeed, it is condition of the status that the spouse receives no remuneration, despite participating regularly in the work of the company.
Although it grants a right to a widow's pension, the spouse will pay social security contributions in respect a personal State pension, as well as a small contribution in respect of death/invalidity.
The rate of the pension contribution is around 25%, based on either one-third of a notional figure (around €44,000 in 2023), called the plafond annuel de la sécurité sociale, or a percentage of the business profits.
These contributions need not necessarily increase the total sum payable by the couple in respect of pension contributions, as the contributions of the business owner (but also their pension rights) can be reduced. The contributions are a deductible business expense.
Insofar as health cover is concerned, as a conjoint collaborateur the spouse would be covered as a family member of the business owner, meaning they would pay no affiliation fee to the health system.
If the business owner is an micro-entreprise, it is possible to register their spouse as conjoint collaborateur at the time of business registration. However, the social security contributions they will pay are not deductible, so if the spouse does play a regular part in the business, a different business tax status is really necessary, eg, limited company. You can read more in our Guide to Micro-Entreprise in France.
In the event of the death of the business owner, the status grants the spouse enhanced rights concerning the business, as occurs in the event of divorce.
5.4.4. Conjoint Salarié
A salaried status is clearly one that offers a great deal more, notably remuneration and full social security cover, including a right to unemployment benefits and redundancy. The spouse (and also including in this case concubines) also has the benefits of the code du travail!
However, it comes at a price, for there are substantial social security contributions to pay, by both the business and the employee. As a result this is not a status that is frequently used.
In addition, in the event of the death of the business owner there are fewer rights in relation to the business, which may rely more on the marriage contract and inheritance planning by the couple.
Since 2018 the salary of the spouse is now fully deductible against profits, which does make the status a little more attractive. Previously, the deductibility of the salary was capped at €17,000.
It is possible to be both salaried employee and shareholder.
5.4.5. Conjoint Associé
Where the business is run through a company structure then of course it is possible for the spouse to be a shareholder, provided the company was not a Entreprise Unipersonnelle à Responsabilité Limitée (EURL), where the only shareholder is the business owner.
To justify status as conjoint associé the spouse need only demonstrate participation in the share capital of the company, on whatever basis.
They do not have to justify an activity within the company, but if they do wish to participate this may either be on a salaried basis or as a business owner.
As a shareholder in the business the spouse is affiliated to the social security system on their own terms, and on the same basis as their partner, as a business owner. It is possible for them to receive a salary, but their main remuneration would normally arise from the profits of the business, through dividends.
If they hold shares, but do not participate in the running of the company, and receive no remuneration other than dividends, then they would not be affiliated to the social security system, although they retain health cover as family member of their partner.
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