Self-employed workers in France to be given improved asset protection

People in France who are self-employed will soon benefit from a new status which will enable them to better protect their personal assets, under a bill which has just been adopted by parliament.

The bill, which forms part of President Emmanuel Macron’s ‘Plan Indépendants’, was passed unanimously with some adjustments and with abstentions from the left, who did not think it went far enough, on February 8.

It will – among other things – create a new unique status for France’s three million self-employed workers, who include tradespeople, freelancers and other small businesses.

These workers will now be able to separate their personal wealth from their business assets, meaning that their private assets cannot be repossessed if their business fails.

Currently, it is only a person’s main residence which is automatically protected in this situation, unless the self-employed person carried out specific formalities to adopt a status called entreprise individuelle à responsabilité limitée (EIRL), involving designating a list of items which belong to your professional assets so as to separate them from your personal ones.

Another alternative was setting up as a form of ‘one-person limited company’ called EURL.

The EIRL scheme will now gradually be phased out having been replaced by the new status of self-employed people.

Self-employed workers have been calling for the new measure for a long time, especially following the challenges and uncertainty of the Covid pandemic.

Allocation des travailleurs indépendants

The law will also expand the conditions under which self-employed people can benefit from the allocation des travailleurs indépendants (ATI) government aid.

Since 2019, the self-employed – who cannot claim traditional unemployment benefit – have been able to claim up to €800 per month for a maximum of six months.

However, this was only in the case of liquidation or insolvency, as long as they had been doing their previous job for two years and their average revenue had exceeded €10,000 a year.

Now, self-employed people who have definitively abandoned an activity because of its non-viability will also be able to access ATI, and the €10,000 requirement will only apply for the better of the two preceding years.

At the end of January, the government had already relaxed the ATI criteria to help certain self-employed workers who had been severely affected by the pandemic.

Bank controls remain stringent

Under the new system, banks will maintain strict measures with regards to self-employed workers, making sure that special guarantees are put in place on the person’s personal and business assets.

Jean-Baptiste Lemoyne, minister for small and medium-sized enterprises, said: “We are expecting banking institutions to take full responsibility for the implementation of this reform, we will be very vigilant.”

The reform will come into force three months after the legal change is signed off by the President.

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