Comments on: Running a SARL in France

By: Beagle

Beagle — Sun, 15 May 2011 16:11:24 +0000

Boris, thanks for your help, I will definitely buy the book.

By: Boris

Boris — Fri, 13 May 2011 15:47:25 +0000

Hi Beagle, yes, there are prescribed orders to hold meetings, declare dividends, account for dividends etc – but I can’t explain them, I would get it wrong – we pay an accountant to prepare and sign off our accounts and avoid potential complications coming back to haunt us later.
We do have a book (more like a folder really) about running a SARL which is quite comprehensive if you feel like the challenge of doing it yourself. It’s called ‘l’encyclopedie pratique du gerant de sarl’ from http://www.gerantdesarl.com
I seem to remember that having an accountant sign off your SARL accounts is pretty unavoidable though, so you might find the dividend paperwork ‘included in the price’.

By: Beagle

Beagle — Fri, 13 May 2011 15:25:55 +0000

Hi, thanks for a very interesting and informative article.

I also have a SARL and am hoping to take my first dividend soon.

Is there a prescribed format for the dividend – i.e. is any formal documentation supposed to be kept with the accounting records? Also, how do I declare the dividend to the CSG/CRDS? Do I do it after each dividend payment or annually?

Thanks in advance!
Beagle

By: Boris

Boris — Tue, 14 Dec 2010 09:04:00 +0000

Yes, the general principle is to be paid in dividends rather than salary because of the favourable treatment, while paying a small salary so you pay enough social contributions to get the health / pension benefits. The rules were changed a while ago to restrict this benefit for certain trades (eg dentists) but hopefully not for hoteliers…)
As you say you will still pay personal tax on dividends received but this is only on a part of the dividends (60% I think), and personal tax rates are lower than corporation tax rates. To further complicate things, the company also has to pay social contributions on the dividends (10% or the 12% I can’t remember which).
If you are employees I think you will have to be paid SMIC (minimum wage) so probably you need to be ‘gerant non-salariée’ – unpaid directors – which are allowed to be paid but the amount can vary from year to year and can be less than SMIC
Overall I think it saves less than I originally expected and once income reaches a certain level and you are paying corporation tax and higher rate personal income tax it will get pretty close to 45%, possibly even 50%, of net income gets paid in charges (it needs quite high net income to pay this much though, especially if you have several ‘parts’ – people – in your family)
Make sure you keep a record of every possible permitted cost!
It’s still difficult to know exactly how much the overall % is because URSSAF/RSI bills are very variable and usually relate at least in part to adjustments to earlier years – so you’re never quite sure how much you have paid for a given year!
Of course anything above is my understanding based on our own experiences, please check with a qualified accountant (you will need one to set the company up anyway) rather than relying on what I tell you – there might be loopholes or different rules that apply to you or your business, and there might be tax exemptions in your region for certain types of new business (this is important to check, it can make a very big difference if it applies).

By: will

will — Tue, 14 Dec 2010 08:31:55 +0000

Hi Boris
So many questions! Is the key, to have a moderate salary and then pay yourself from the profits by way of dividend which attract company tax and social charges at about 12% ?

We are looking at a hotel so turnover 200,+ set up sci for walls and sarl for business.
My main question is how much tax and social charges are we going to pay on profits and can we reduce social charges by use of dividend. I realise then income tax will go as a result of dividend payment.
Look forward to your reply
warm regards will

By: Boris

Boris — Sat, 11 Dec 2010 10:23:26 +0000

Hi Will, you’re welcome to ask any questions here. I’m not an expert but we have learned a lot from setting up our SARL so have quite a lot of ‘personal experiences’.

By: will

will — Fri, 10 Dec 2010 06:10:48 +0000

is the aurthor of this great blog available for some more advice we are in the process of setting up a sarl and I would be very keen to get some more feedback if possible
regards
lawrence

By: Johnny Norfolk

Johnny Norfolk — Fri, 16 Oct 2009 14:39:02 +0000

I have to say Boris I was supprised you agree, so good for you.

By: Boris

Boris — Fri, 16 Oct 2009 05:11:02 +0000

That’s my kind of person! I daresay he has a dark side like all politicians seem to, but it’s nice to hear someone talking sense for once.

By: Johnny Norfolk

Johnny Norfolk — Thu, 15 Oct 2009 16:53:22 +0000

This is a direct reply to Gordon Brown
The first person to say what most Brits feel.

http://www.youtube.com/watch?v=94lW6Y4tBXs&feature=related