why declare it, what are your obligations

Fashion, crafts, cakes, homemade creations… Small businesses are growing in number thanks to the spotlight they enjoy on social networks, especially on TikTok and Instagram. However, many activities quickly collapse due to non-compliance with the law. To avoid making a mistake, here are the 7 basic things you need to know before starting your small business.

1 – Small businesses, the definition

Small business is a small activity in the sense that it generates a
“small” turnover, generally around a few tens or hundreds of euros per month. It can be a complementary activity or the pursuit of a passion that has become financial. It can also be an activity in the start-up or testing phase before a major investment to cover a larger market. Here is an interesting video explaining the creation of a small business.

2 – Why declare a small business

Many passionate creators have had the rug pulled out from under them, condemned by buyers for not respecting the rules of distance selling, especially regarding the right of withdrawal and delivery time.
The risk is great! Gold, failure to declare an economic activity and/or non-compliance with trade rules constitute violations of the Trade Act and the Consumer Act, resulting in high fines (fines, payment of black VAT, ban on establishing a business).
At the same time, formalizing your activity under the self-employment scheme gives you the opportunity to:
– benefit from simplified administrative and accounting formalities
– to pay social security taxes only in case of an effective sale
With such facilities and considering the risk involved, do not hesitate to declare a small business.

3 – Declare your activity to become a business

Many people start a small business without thinking of themselves as an entrepreneur. And still! Selling items on a recurring basis, whether new or used, handmade or resold as is, constitutes a commercial approach. The law requires that this activity and the resulting turnover be officially declared.just like any business that offers paid products or services.

Specifically, repeat sales is the key criterion to know whether to declare your activity or not. The concept of profit also comes into play. In any case, when the small business is envisaged for sale with regular communication on social networks, it is recommended that you continue with the statement of activity.

4 – How to declare your activity

The actual creation of the activity must be carried out with a consular organization (Chamber of Commerce, Chamber of Crafts or URSSAF depending on the intended type of activity).
Per definition, the creation of a small business requires only few investments for the entrepreneurand declaring the activity under self-employment is then appropriate (this claim needs to be validated on a case-by-case basis via the preparation of a preliminary income statement).

5 – Invoicing and accounting rules

Any sale shall be subject to an invoice published in duplicate, one of which shall be for the customer and the other shall be retained by you for 10 years (article L123-22 of the Trade Act). Or else, an invoice is an official commercial document which will contain a number of mandatory information (see service-public.fr Where economy.gouv.fr).
Finally, you must comply with social, tax and accounting obligations related to your company’s legal status and arrangement (self-employed, company or common law sole proprietorship).

6 – Distance shopping, cancellation and delivery period

As a seller, you must comply with the rules on distance trading, especially the buyer’s right of withdrawal and delivery times. These rules are always mentioned in the general conditions of sale: document that is made available to the potential buyer before the purchase.

In short, the buyer’s right of withdrawal is 14 days for distance sales (see service-public.fr). Thereafter, Article L216-1 of the Consumer Code provides that the delivery time for distance sales is freely determined by the seller. If not specified, it is 30 days. A delay in delivery can in many circumstances lead to the seller getting a refund to the buyer, even if the delay is caused by the carrier (see economy.gouv.fr).

7 – Sector regulations

Each activity belongs to a sector with its specific standards and regulations. An entrepreneur who wants to start a small business is not exempt from these standards. Find out more about your obligations from the consular organization responsible for your activity (Chamber of Commerce, Chamber of Commerce or Urssaf).
For example, food sectors require training in hygiene and safety (food safety, cold chain); the cosmetics industry is highly regulated with tests to be carried out on the products and expert validations to be achieved before they are put on sale.

Terms of payment

Fans are used to negotiating and managing their sales via private message on social networks, especially by requesting payment via a money transfer application (like Lydia, for example).
This practice is completely illegal in the case of declared commercial activity. The entrepreneur running a small business must open a dedicated bank account (professional account for a company or business under common law – separate account for a self-employed person).
Payment must be made directly to this account by check or cash receipt, wire transfer or payment by credit card via an e-commerce site. In addition, the seller must send an invoice to the customer at the end of the purchase.

The ideal is therefore only to use social networks to communicate and, in parallel, a website to sell, which can be yours or an intermediary of the marketplace type, like Etsy, this famous platform specialized in the sale of items “handmade” .

Leave a Comment