Auto-entrepreneur Rules to be Tightened
Tuesday 04 August 2009
The rules on obtaining ‘auto-entrepreneur’ business status are to be tightened.
Regular readers will be aware that an auto-entrepreneur is a form of micro-entreprise, with easier business registration and tax formalities.
With effect from 2010 anyone wanting to start up as an artisan using this business status will be required to produce either satisfactory evidence of qualifications, or at least three years' experience in the activity, as already occurs with other forms of business registration.
Currently, registration as an auto-entrepreneur does not dispense with the need to hold the necessary qualifications or experience, but the lack of registration formalities has meant that no checking of qualifications or experience is being carried out on business start up.
Later on-site verification can be made by trading standards officials, but such checks are not widespread or systematic.
Those who wish to start up as an artisan will in future be required to register their business with the Chambre de Métiers et de l’Artisanat (CMMA), who will have responsibility for ensuring that the entry criteria are met.
While those in the building trades will be most directly affected by the change, an artisan is an umbrella term that covers around 250 manual professions - from butcher to builder.
As the proposed change will not be retrospective, those who have already registered will not be required to produce evidence of qualifications or experience.
All auto-entrepreneurs will continue to be relieved of the need to pay the €200 annual business registration fee for the first three years of the business.
The change has been introduced following pressure on the government from the trade association of artisans (Union professionnelle artisanale (UPA)), who have been concerned about the lack of controls on an auto-entrepreneur.
The UPA argued that consumer interests are being damaged by a lack of controls on entry, and that the new business status had introduced an element of unfair competition between existing artisans and those operating as an auto-entrepreneur.
In practice, the only real advantage is that an auto-entrepreneur has no minimal annual social security contributions to pay, but it is questionable whether this is a significant advantage.
It is more likely that the UPA have been concerned at the increase in competition being introduced into the market place by the sheer number of people registering as artisans!
Government estimates put the number of newly registered auto-entrepreneurs at around 200,000, of whom around one quarter are in one of the artisan professions.
In a separate but related move, the government is also proposing to introduce some form of limited liability for an auto-entrepreneur. At the moment only the main home can be safeguarded against creditors, and it is proposed to extend the protection to all other personal assets.
You can read more in our guide to Starting an Auto-entrepreneur Business.
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