The société d’exercice libéral (SEL) is a legal form specifically designed for the regulated liberal professions. It makes it possible to carry on a liberal profession in corporate form, while benefiting from the advantages of conventional corporate legal structures. This hybrid status offers opportunities for tax and asset optimization, but also implies specific constraints that need to be analyzed before making your choice.

Understanding the advantages and disadvantages of the SEL allows you to determine whether this structure corresponds to your professional and financial objectives. This detailed analysis sheds light on the tax, social and legal aspects of this special status.

What is a “société d’exercice libéral”?

The “société d’exercice libéral” is a legal structure created by the law of December 31, 1990, specially designed for the regulated liberal professions. With some 60,000 SELs registered in France, this corporate form enables professionals subject to a professional order (lawyers, doctors, architects, chartered accountants, notaries) to carry out their activity in the form of a commercial company, while respecting their ethical obligations.

The SEL mainly comes in two forms, which account for 95% of the market: the SELARL (Société d’Exercice Libéral à Responsabilité Limitée), which has the characteristics of the SARL, and the SELAS (Société d’Exercice Libéral par Actions Simplifiée), which is based on the SAS. Other forms also exist, such as the SELAFA and SELCA, but remain marginal in practice.

The advantages of the Société d’Exercice Libéral

The SEL offers substantial benefits that explain its growing popularity with self-employed professionals. These advantages mainly concern wealth management, taxation and organization.

Protection of personal assets

The creation of an SEL establishes a clear legal separation between your personal and professional assets. Your liability is limited to the amount of your contribution to the share capital, which protects your personal assets in the event of financial difficulties for the company. Your professional creditors cannot seize your private assets beyond the amount of your capital contribution. This legal certainty is a major advantage over sole proprietorships, where your entire assets may be involved. Please note, however, that this protection does not apply in the event of personal misconduct detachable from your professional duties, a situation in which you could be held personally liable.

Tax and social security optimization

The SEL allows you to choose between income tax (IR) and corporation tax (IS). The IS option becomes advantageous when your profits exceed certain thresholds. The reduced rate of 15% applies to the first 42,500 euros of profits, then 25% thereafter. By way of example, on €100,000 of profits, a professional subject to income tax in the 41% marginal bracket would pay around €41,000 in tax, whereas with an SEL subject to corporation tax, taxation would amount to around €20,875 (15% on €42,500 + 25% on €57,500), i.e. a potential tax saving of over €20,000.

You can optimize your remuneration by combining salary and dividends. This flexibility enables you to reduce your social security contributions while building up reserves in the company. Dividends are taxed more favorably than traditional professional income. The management of deductible expenses is also more flexible under SEL, enabling you to deduct more professional expenses and optimize your depreciation allowance. The support of a specialized accounting firm can help you maximize these tax optimization opportunities.

Easier transfer and development

The SEL considerably simplifies the transfer of your professional activity. You can gradually transfer your shares to a successor or to your partners, thus avoiding abrupt interruptions and ensuring the continuity of the practice. This gradual transfer benefits from substantial tax advantages thanks to the Dutreil pact, which allows a 75% exemption from gift or inheritance tax under certain conditions. The transfer of shares also benefits from specific tax allowances, making the transfer of assets particularly attractive within the framework of an SEL.

Joining forces with other professionals and expanding your business is easier with an SEL. You can bring in new partners by transferring shares or increasing the share capital, thus encouraging the creation of multi-disciplinary or multi-site practices. It’s also easier to increase the value of your business through a partnership: potential buyers appreciate the clear legal structure and audited annual accounts. This accounting transparency facilitates negotiations and optimizes the sale price of your practice in the event of a final transfer.

Disadvantages of the Société d’Exercice Libéral

Despite its many advantages, the SEL also presents constraints that need to be carefully assessed. These limitations mainly concern regulatory, financial and organizational aspects, particularly in terms of bookkeeping and administrative management.

Regulatory and administrative constraints

The formalities involved in setting up an SEL are more onerous than those for self-employed practitioners: you need to draw up articles of association, publish a legal notice, register your company and obtain approval from your professional association. These initial steps generally require the support of a lawyer and a chartered accountant.

SELs require full commercial accounting, the preparation of annual financial statements and their filing with the Clerk of the Commercial Court. In most cases, a chartered accountant is required to declare profits. In addition to these obligations under company law, your profession has its own specific rules of professional conduct, creating a twofold regulatory constraint that complicates day-to-day management and demands constant compliance with your professional association.

Set-up and management costs

The costs of setting up an SEL far exceed those of setting up on your own (200 to 500 euros). You’ll need to budget for legal fees to draw up the articles of association, publication costs, registration fees and accountant’s fees. The total cost of setting up an SEL generally varies between 2,000 and 5,000 euros, i.e. an initial investment 4 to 10 times higher than for sole traders.

Annual operating costs are also higher. Accounting fees represent a significant recurring expense, generally between 2,000 and 4,000 euros a year. You will also need to factor in the costs of holding general meetings, filing financial statements and, depending on the size of your business, statutory auditors.

Restrictions on the composition of capital

This requirement for majority shareholding by professionals limits your options for opening up the capital to outside investors. You cannot raise significant funds without losing control of your company. This structural constraint can put the brakes on your development ambitions when you need significant capital to finance your growth.

The entry of new associates and the transfer of shares are still subject to strict conditions. Each move systematically requires the approval of the professional association, which lengthens lead times and can complicate your plans. The transferee must also be approved by the existing associates, thus limiting the liquidity of your investment. Some professional associations are particularly strict about these conditions, adding an extra layer of complexity to any capital transaction.

Choosing the SEL form best suited to your situation

SELARL and SELAS account for 95% of SELs created in France. The SELARL is ideal for professionals seeking optimized social charges: the majority manager is covered by the TNS system, with social contributions of around 45% of income, compared with 65-70% under the assimilated-employee status. This structure is ideally suited to small firms seeking simplicity of management. The SELAS offers greater statutory flexibility and facilitates the entry of investors. The chairman benefits from better social protection, despite higher payroll taxes. It is ideal for ambitious development projects.

Your choice should take into account your projected income level, your social protection objectives and your association plans. Consider the specific features of your profession and the recommendations of your professional association. The SEL represents an appropriate solution for structuring your liberal profession: its advantages in terms of assets, taxation and transfer of ownership more than compensate for the administrative constraints. The support of a tax lawyer is your guarantee of making the right choice for your specific situation.