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Status of the company
Micro-company and individual business: understanding the distinction
Publié le 23 juillet 2026 - Entreprendre Service Public / (Prime Minister)
Micro-company and individual business can often be confused. They share the same legal shape since a micro-company is the lighter version of an individual business: it benefits from a simplified social and tax system. Undertake Public Service explains.
Individual business and micro-company allow you to carry out an activity in your own name. Their formalities of creation and management are simpler than for a business.
There is no such thing no difference in legal status between these two entities since micro-company is an individual business whose rules have been reduced: it is thus differentiated by its tax system and its social system which are simplified.
Please note
The micro-company is subjected to annual turnover ceilings. If these thresholds are exceeded, the contractor switches to the conventional individual business regime.
Social system
The first distinction concerns the method of calculating social security contributions.
The micro-company benefits from micro-social regime : its social security contributions are calculated using a percentage of its turnover. Thus, if its turnover is zero, then no contribution is due. The contribution rate applied varies according to the nature of the activity.
Conventional individual business is the responsibility of social security scheme for self-employed persons integrated into the general scheme. During the first two years of activity, his contributions are calculated, provisionally, on flat-rate basis corresponding to 19 % of the annual social security ceiling (PAS), or €9,131 in 2026. The individual contractor does not pay any contributions for the first 3 months, or 90 days. The contributions are then calculated directly on its net profit.
The individual entrepreneur must also pay a minimum amount of social security contributions, even in the absence of turnover.
Tax system
The tax system is the other major distinction between micro-company and individual business.
Micro-company is the responsibility of micro-fiscal regime. This system consists, in particular, in calculating income tax, in deducting expenses by means of a flat-rate abatementand not according to their actual amount.
It is imposed by default according to a withholding tax mechanism, but may also opt, under certain conditions, for the payment of income tax.
Conversely, the individual business is automatically subject to a actual income tax system (normal or simplified). It is thus taxed on its actual profit, after deduction of the expenses actually borne by the company.
Finally, the individual entrepreneur can also opt for the tax on businesses.