The choice of articles of association and legal status is a fundamental step in setting up a business or law firm. This decision has a direct impact on the liability, taxation, mode of operation and development prospects of your company and structure. Understanding the different options available for company status and structure will enable you to select the legal form best suited to your business project.

What is the legal status of a law firm?

The legal status of a law firm defines the legal framework of the articles of association and the company in which the professional activity is carried out. It determines the operating rules of the by-laws and the company, the division of responsibilities, the applicable tax regime and the decision-making procedures. This legal form must respect the strict regulatory constraints of the articles of association and the company, in particular the obligation to register with the bar, the ethical rules specific to the profession and the administrative formalities imposed by the professional association. In France, around 60% of lawyers work as sole traders, 25% as SCPs and 15% as SELs, reflecting the diversity of professional approaches to status and business.

Each status has its own advantages and constraints, with concrete implications for the day-to-day management of the firm’s business. For example, sole proprietorship simplifies accounting but exposes personal assets, while corporate forms require more complex accounting but offer asset protection. The costs of setting up a business or company vary significantly: from €0 for a sole proprietorship to €2,000-5,000 for an SCP, and up to €8,000-15,000 for an SEL, depending on its complexity. The choice of companies depends on your objectives, your personal situation and your vision of the firm’s development, with the help of legal tools adapted to optimize the administrative management to be chosen.

Individual practice: simplicity and responsibility

Sole practice is the simplest way to choose and start your own law practice. After registering with the bar, you choose to practice directly in your own name, without creating a separate individual legal structure. In France, around 60% of lawyers still work as sole practitioners, a particularly effective way to start their careers.

Sole proprietorships are taxed as individual non-commercial profits (BNC), with direct income tax on a progressive scale. This form of practice remains fiscally advantageous up to around €80,000 in annual profits, beyond which corporate income tax generally becomes more favorable, etc.

Advantages of individual practice, etc. :

• Administrative and accounting simplicity with reduced red tape, etc., for your project
• Total freedom to make project and legal decisions
• Immediate project start-up and business law
• Reduced set-up costs in law and professions
• Advantageous BNC tax regime for moderate incomes in the professions

Main disadvantages of company law :

• Unlimited liability right on your company’s personal assets
• Difficulties associating, setting up or selling the business
• Less advantageous corporate tax regime above €80,000 annual profits
• Sociã professional insulation that can be compensated for by using a collaborative lawyer platform create

Professional partnership (SCP): collaboration between lawyers

The SCP is the traditional form of partnership for the joint practice of the legal profession. It enables several lawyers to create and pool their business resources, while retaining their professional independence and autonomy in the management of their cases.

Under this structure, all partners in a business partnership must be members of the bar. Partners’ liability for business debts remains unlimited and joint and several, meaning that each partner may be held liable for all the company’s civil debts. Shares may only be transferred to business lawyers, thus preserving the exclusively professional civil nature of the company.

Key features of the SCP: business plan

• Minimum business capital not required by law plan
• Management by one or more partners Lawyers for the plan and the business
• Distribution of profits in accordance with the corporate plan and statutory provisions
• Tax transparency: direct taxation at the level of the associates’ corporate plan
• Collective decision-making by the company according to possible rules defined in the bylaws

Société d’exercice libéral (SEL): flexibility and openness of capital

SELs offer a modern, social alternative to the traditional forms of the legal profession. They come in four main corporate variants: the SELARL (Société Libéral à Responsabilité Limitée), the SELAS (Société Libéral par Actions Simplifiée), the SELAFA (Société Libéral à Forme Anonyme) and the SELCA (Société Libéral en Commandite par Actions). Each form presents distinct organizational and financial specificities, enabling the structure to be opened up and adapted to the specific needs of the practice.

The SELARL, the most widespread form, operates on the SARL model, with simplified management for opening a business. The SELAS offers great statutory flexibility, inspired by the SAS, and is particularly well-suited to the opening of growing firms. The SELAFA is suitable for large-scale structures requiring more stringent formalities, while the SELCA allows limited partner investors to open a business.

The open SEL allows non-lawyer investors to acquire up to 25% of the capital. This openness makes it easier to finance development and associate with strategic partners. For example, a specialized accountant or consulting firm can become a minority partner, bringing their complementary expertise to the firm’s legal services.

Advantages of prã SEL :

• Limited liability of sarl partners to the amount of their contributions
• Possibility of opening up capital to non-lawyers (maximum 25%)
• Flexibility in organization and creative governance
• Tax optimization possible depending on the form chosen crã
• Facilitating business transfers and sales

According to professional statistics, SELARLs account for around 60% of SEL creations, followed by SELASs (35%), with other forms remaining marginal. The average number of partners in a SEL crã is around 3 to 4 professionals, reflecting an optimal size for pooling resources while maintaining efficient management.

Ethical obligations remain the same whatever the choice, guaranteeing compliance with professional rules and the independence of the lawyer in the exercise of his mission.

Other possible legal forms

Others may be envisaged in specific situations. The joint venture (société en participation) allows joint practice without the creation of a separate legal entity. This form is ideal for one-off or temporary collaborations wishing to pool certain activities.

The libã association of lawyers is an alternative way of sharing resources without setting up a company. It enables libã operating costs to be pooled, while maintaining the independence of each lawyer. The libã formula is particularly well-suited to reducing operating costs without the need for a corporate commitment.

For international or multidisciplinary libã, more complex structures may be required, combining several legal forms depending on the activities and jurisdictions involved. These organizations often require the integration of specialized libã software solutions to effectively manage their structural complexity.

How to choose the right status for your project

Selecting the optimum legal status for your practice requires a methodical, personalized approach. Rather than limiting yourself to a list of general criteria, follow this structured decision-making grid to identify the legal form best suited to your situation.

5-step decision matrix :

1. Evaluate your professional profile: Individual or team? Experience and existing network?
2. Analyze your risk tolerance: Do you accept unlimited liability?
3. Define your financial needs: available initial capital and future financing requirements
4. Project your development: projected growth and partnership prospects
5. Tax optimization: Expected income levels and wealth management strategy

Case studies and recommendations :

• Young lawyer : Practice (immediate start, reduced costs)
• Association of 2-3 experienced lawyers: SCP (pooling of resources, 3-4 weeks to set up)
• Growing practice with investment needs: SELARL (limited liability, open capital possible)
• Structure: SELAS (maximum flexibility, 4-6 weeks to set up)

Average annual costs :

• Individual practice: €2,000-3,000 (accounting, insurance)
• 4,000-6,000€ (formalities, accounting)
• SEL: €5,000-8,000 (increased obligations)

The use of specialized legal software can facilitate the administrative management of your firm, whatever its status. These tools optimize productivity and ensure compliance with obligations.

A legal consultation with professional accountants is essential to validate your choice. This personalized analysis guarantees an informed decision tailored to the specific features of your project.

Tax comparison of different statuses

The choice of tax regime is a decisive factor in selecting the legal status of your law firm. The main distinction is between income tax (IR) and corporation tax (IS), each of which offers specific advantages depending on your level of income.

Income tax vs. corporate tax:

• The year and the SCP are by default subject to income tax (progressive scale).
• SELs are generally subject to corporation tax (fixed rate of 15% up to €42,500 profit, then 25%).
• Certain structures may opt for one or the other under certain conditions.

The break-even point between these two regimes varies according to your personal situation. As a general rule, the corporation tax becomes more advantageous from an annual profit of around €80,000, particularly if part of the profit is retained in the company to finance its development.

The impact of social charges varies considerably depending on the status chosen. In tax-paid companies, social security charges apply to all profits, while in corporate tax-paid companies, they only apply to the remuneration paid to the director, with dividends subject only to social security deductions (17.2%).

Tax optimization opportunities:
SELs generally offer greater flexibility for tax optimization:

• Trade-off between remuneration and dividends
• Creation of reserves subject to corporation tax only
• Deduction of certain professional expenses
• Possibility of increasing the value of the business and passing it on more easily

For one-person structures, the EIRL or SASU may offer interesting alternatives, enabling you to benefit from limited liability while retaining a degree of fiscal flexibility. A personalized analysis of your situation with a specialized chartered accountant is essential to determine the optimum tax status for your business.