That's it, you're becoming a company 🚀 ! We take a closer look at some of the special features involved in switching from a self-employed individual to a company.

Choice of financial year

ℹ️ The term financial year is simply shorthand for "one year's activity as a natural person or as a company".

In the case of an individual, the financial year always corresponds to a calendar year: 1ᵉʳ January to 31 December. For a company, the financial year may straddle two calendar years: for example, from 1ᵉʳ July to 30 June.

Closing date

In your company's articles of association, you define the closing date of the financial year (of 12 months).

💡 We strongly recommend using the same financial year as for a natural person, i.e. from 1ᵉʳ January to 31 December (like 99% of companies). You avoid the administrative hassles associated with this specific "staggered" management.

Closing date of the first financial year

Your articles of association also specify the closing date of the first financial year. You can choose between a short or long first financial year.

👉🏻 Example: you start your business on 1ᵉʳ September 2025. Your first financial year ends on either 31/12/2025 (4 months) or 31/12/2026 (16 months).

💡In general, opt for a short first financial year. This allows you to benefit more quickly from a dividend at the reduced rate.

Taking over commitments

ℹ️ A company has the option of taking over your commitments made in your business as an individual. This is very practical 👌🏻

👉🏻 For example, you can take over your collaboration contract with a client, such as a retrocession contract with the hospital or a consultancy agreement. You can take over a loan linked to an investment in the business. Or you can take over an agreement for a service contract, such as a training commitment.

The sooner, the better

Given that taxation is more attractive in a company, it's often a good idea to bring the takeover date forward. In this way, you maximise the income taken over into the company, income that is taxed under corporation tax rather than personal income tax.

💡 At BILLY, a company transfer specialist will work with you to define the ideal date: one that allows you to take back as much income as possible into the company while still being fiscally acceptable in the eyes of an auditor.

ℹ️ We recommend setting a date at the beginning of a quarter. This avoids overlapping two VAT quarters and getting tangled up in VAT obligations.

Debt to the company

Once the date for taking over the liability has been set, we make the accounting entries. We take over the income and expenditure of your business as an individual. The balance of this operation is generally a positive amount.

👉🏻 For example, you take over €25,000 in income and €5,000 in expenses. The result is €20,000.

⚠️ The positive result is therefore taken back into the company, while the cash is in the pro bank account for the business as an individual.

💡When you take over the commitment, you will have to "return" to your company what it has declared. If you no longer have the cash to do this, that's no big deal, you'll simply owe your company a debt. This is because you have "consumed" this cash for your private net needs.

Reselling investments

Here are some examples of assets that are usually sold back to the company:

Car

You own a vehicle used for your business. Note that the vehicle will have to pass a roadworthiness test and be re-registered (with a registration tax to pay).

Machinery and equipment

You have purchased a machine, computer, office furniture or stock of goods.

Intangible assets

You have developed a patient base or an intellectual right such as a brand or software.

Depreciation

Capital goods are those that have a lifespan of more than one year. They are therefore depreciable. When you become a company, your newly-formed company buys these assets back from you.

💡 The company is not bound by the depreciation period for the asset in the individual business. It redefines a new period according to the projected life of the asset. This is exactly the same as if you were buying a second-hand asset from a supplier.

👉🏻 For example, your car as an individual is depreciated over four years out of the planned five. It is then sold back to the company. The company will opt for a new depreciation period, so there is no link with the depreciation as an individual.

Transfer of universality

This is the official term used to describe the transfer of everything held. All the assets (= what the business owns) and liabilities (what it owes) of the natural person business will be transferred to the company.

👉🏻 For example, an asset is financed by a loan: the asset corresponds to the asset while the loan corresponds to the liability (debt).

💡 Your business as a natural person makes a sale to your company by listing all the assets. This sale is known as a transfer of universality. It has the particularity of being made exempt from VAT.

Capital gains

Capital assets must be sold at a fair market price. All that is required is an appraisal such as L'Argus for a car or a comparable market sale.

This sale will result in a potential capital gain for the business as an individual.

👉🏻 For example, the fully depreciated computer is sold back to the company for €300. This will result in the €300 being taxed as a natural person (like any other income).

the capital gain is taxed separately at 16.5% (tangible assets) or 33% (intangible assets, such as patients). It is also subject to social security contributions.

Balance between remuneration and dividends

As a self-employed individual, the notion of remuneration is vague: your expenses are deducted from your income, and then tax is applied to this balance, known as taxable income. After tax, you are left with a "net result in your pocket", which is considered to be net remuneration.

Remuneration package

Thanks to the company, you have a "new person" who comes into play, your company. It will grant you a remuneration package:

Gross salary: depending on private needs
Fixed expenses
Rent (if you are a landlord and rent an office or other workspace to your company)
Benefits in kind: company car, internet, telephone, etc.
Meal vouchers
Pension plan (EIP)
Health insurance

Dividend

The company will pay its current expenses as well as your remuneration package. The remaining profit is subject to corporation tax. After this tax, the profit can be distributed as a dividend. This is the shareholder's remuneration.

💡 Taxation of dividends is generally more attractive than that of remuneration. Hence the importance of finding an optimum balance between the two.

Conclusion: preparing for the transition

Making the transition from self-employed to company is a strategic step that can be highly advantageous if it is well prepared. This transition needs to be carefully thought through, taking into account your financial objectives, your business, and the tax and administrative implications. At BILLY, a specialist in the transition to a company will take the time needed to help you through this process.

👉🏻 If you're about to set up your own business, find out more about the steps involved in setting up a company.

If you have any further questions, please don't hesitate to contact us via chat 😊

See you soon 👋

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