What legal status to choose for Dropshipping?
Do you want to start dropshipping but you don't know which legal status to choose? Are you lost between legal self-entrepreneur status, SARL, SAS, or even SA? Do you hesitate because you are afraid to choose a legal status that is not suited to your situation?
If you need advice on choosing the legal status of your business to embark on this great and great adventure that is dropshipping, you should find all your questions answered in the article below.
If you still have doubts after reading this article, please feel free to ask your question directly via the comments, I will do whatever it takes to get back to you as quickly as possible.
Dropshipping: Which legal status to choose from?
Dropshipping is the same as traditional commerce at the legal level. Indeed, when you go to sell products on your site, you will collect money, the fruit of your sale. This amount will be reduced by the purchase amount of your product, i.e. the amount that you will pay directly to the dropshipping supplier who will take care of producing and sending the part.
In the context of a business, most legal statutes are perfectly suited. So you won't be able to make bad choices. However, you must choose your status based on the activity you plan to do.
Case 1: Dropshipping for additional income
If you've been planning to drop into dropshipping to generate additional income without being able to devote 100% of your time to this new business, then this is the case.
This activity will therefore not be main but secondary. You must therefore simplify your administrative procedures as much as possible while avoiding having the least legal constraints (obligation of a professional account, of an accountant, to declare VAT, etc.).
Most suitable legal status: Self-employed person
The advantages of being a self-employed person
- Creation of the company in just 3 clicks
- No need to have a starting capital
- A turnover statement every quarter
- No VAT declaration if you do not exceed € 91,000 in turnover during the year (i.e. around € 7,600 in turnover per month)
- No obligation to have a professional account or an accountant ...
The inconvenient
- Not possible to integrate charges into your activity (ex: invoice for an internet box, investments in communication, company car, etc.)
- No contribution for your retirement or unemployment
Case 2: The ambition to be your own boss
If you have planned to get started 100% in this new activity. You plan to put yourself out of work to have all the time and funds necessary to get started and give yourself every chance of achieving your goal: to become your own boss who manages to pay himself a salary and live from HIS work.
If this is the case, in my opinion, you have two statuses that can be interesting even if there is one that is more fashionable than the other:
1. EURL, a single-person company with simplified liability (it is a SARL but where you are the sole shareholder)
2. SASU, a simplified public limited company (a limited company but simpler)
The real difference between these two corporate legal statuses is the fact that the manager (therefore you) is an employee of it or not. Indeed, the manager of a EURL is not an employee (therefore no contribution for retirement) when the president of the SASU is an employee of this entity.
This difference necessarily leads to a difference in protection for the manager:
1. In the case of EURL, the manager does not contribute to his retirement or for his unemployment. If the business stops, he is not entitled to anything at all.
2. In the case of SASU, the manager has a salary, therefore a payslip. He contributes for his retirement and unemployment, but the cost of this wage is much higher because it includes all the social charges that companies must pay. Basically, to pay yourself $ 100 of salary, you will have to pay $ 200.
Note that, whatever the legal status you choose, you will have to pay a starting capital. We are used to saying that it is possible to create a company with a symbolic capital of 1 € but make no mistake, you will necessarily have to put 1000, 2000, 5000 € or more in this capital for your company can pay the various legal obligations following its creation.
Indeed, for these 2 statuses, you will have to open a professional bank account, choose and pay an accountant who will take care of your accounting (if you do not know how to do it) but also your VAT.
The most suitable legal status: SASU or EURL depending on your risk appetite
Main advantages:
- You will be able to pass all your activity costs to the company's account: servers, management costs of your dropshipping site, internet box, purchase of a computer for professional use, catering costs for professional use, etc.
- More secure for your future than the status of auto-entrepreneur
Disadvantage:
- Much more complex and expensive than the status of auto-entrepreneur
Case 3: You start by remaining an employee to try to become your own boss
If you have planned to start dropshipping while remaining an employee of your company but you have in the back of your mind to try to do everything so that you can, in the long term, become an employee of this new activity, the simplest solution is to mix cases n ° 1 and 2.
Indeed, you can completely start your dropshipping activity with self-employed status. And when your activity allows you to quit your job to devote yourself to it 100%, you can then switch to case n ° 2 by choosing a EURL or a SASU. You will then close your auto-business and voila!
The most suitable legal status: self-employed then SASU or EURL
Advantage: you get started simply, easily, and without constraints. And when you want to professionalize this activity, you will have all the time you need to choose the legal status perfectly suited to your situation.
Read more useful articles related to Dropshipping:
2. How to Find Profitable Dropshipping Niche in 2021?
3. What is Dropshipping - How Does Drop Shipping Work?
4. How to Start a dropshipping business with aliexpress?
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