Nature of activity of a company

The nature of a business is important as it affects the life of the latter on many levels. But what exactly is it and how do you determine it? What are the different legal natures? The position of the manager, taxation, management of the company, formalities, depend on these. Zoom in on the nature of the company’s activity!

What is the nature of business activity?

The legal nature of a business activity is simply the type of activity that you do on a daily basis. To determine this, you need to define what the core business of your company is, i.e. what are the common and recurring tasks.

In total, 5 types of activities exist: commercial, industrial, artisanal, agricultural or liberal. They are governed by different codes and each answer to a very precise definition and law.

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Thus your company may have a single activity or a mixed activity, i.e. mixing several types of activities.

Different types of activities of a company

Two main types of activities exist: business activities and civic activities. These specifically determine the choice of your legal status.

commercial nature

business activities

To qualify as a trader, it is necessary to conduct commercial work in an independent, habitual, continuous and steady manner. Thus, commercial activity includes all activities of buying goods for their resale or sale of certain services. Article 101-1 of the Commercial Code lists all commercial acts. For example, you will find:

  • purchase and rental of real estate;
  • equipment supply, transportation, storage of furniture;
  • banking, brokerage and foreign exchange operations;
  • the manufacture, purchase or resale of navigation or shipping vessels;
  • Liability between merchants, merchants and bankers;
  • hotels and catering;
  • private security;
  • live performance;
  • Etcetera.

industrial activities

Industrial activities are distinguished from purely commercial and artisanal activities by the use of machines and labor. That is to say, professional income does not come directly from your work. These are the functions of mass production, extraction, handling, storage and warehousing.

civil nature

A civil activity is quite simply an activity that is not commercial. Not very precise as a definition, is it? Thus, liberal, artisanal and agricultural activities are considered to be of a civic nature.

liberal activities

These are mainly intellectual, technical or nursing activities, which are carried out independently. They require, among other things, an appropriate professional qualification and respect for ethics and professional conduct.

In liberal activities, there are 2 categories:

  • regulated profession : It is the law that imposes a liberal statute on them and their title is protected. Their activity is regularly monitored by their own body. These are, for example, notaries, architects, dental surgeons, speech therapists or even judicial officers;
  • irregular profession : It is a little “catch-all” that brings together all activities that are neither commercial, nor craft, nor industrial, nor agricultural, nor regulated.

craft activities

It is Article 19 of the Act of 5 July 1996 which gives the definition of a craftsman. He is a civilian self-employed person who does manual activity and manages less than 10 employees. By decree, the craft activities are detailed in the Chamber of Trades list. Therefore it is a matter of production, transformation or provision of services for which specific information is required.

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The distinction between artisanal and commercial activity is mainly based on speculation: only commercial activities have recourse. This is the reason why artisans cannot manage a business with more than 10 employees.

agricultural activities

Agricultural activity is that of professionals who exploit the biological life cycle of animals and/or plants. These are for example:

  • Livestock or plant production activity, including processing and marketing;
  • Tourist reception as an extension of production activity supported by agricultural operations such as an educational farm or rural lodge;
  • Production and marketing of biogas, electricity and heat obtained by anaerobic digestion. At least 50% of this production should come from agricultural inputs.

How and why to determine the nature of your business?

The nature of the business is determined even before your activity begins. In fact, the formalities of setting up an online business are not the same depending on the profession you practice.

Set your main activity

It is possible that several types of activities coexist within your company. But if there are large disparities in your business, you need to determine your core activity. That is, the activity from which you get your main source of income. It is on this that most elements of the life of your business will depend.

effect of legal nature on the activity

The legal nature of your business has a profound effect. In fact, it is he who will supervise almost your entire profession:

  • your legal status : Certain activities impose a specific legal status. This is the case for commercial activities that involve the creation of commercial companies (SARL, EURL, SAS, etc.). If nothing obliges you to use a precise legal form, you are free to form a sole proprietorship, open a civil society, become self-employed, etc. ,
  • formalities to be completed : The nature and legal form of the activity determines the steps to be taken for the creation. Which organization should you register with? CFE (Centre de Formalites des Enterprises), CMA (Chamber of Trades and Crafts), RCS, RSAC?
  • Taxation What’s missing on your turnover? Which self-employment limit should not be crossed? What are the tax procedures to be done at the end of the year? How to declare your tax? VAT? The nature of the activity largely determines the taxation of your business which can be more or less heavy.
  • Management of the company and social status of the manager,

The nature of a company’s activity is a determining element that you should study before setting up your company or even choosing your legal status. This has to be declared at the time of your registration and thus will serve as the basis for the tax and social system to administer.

general question

What is the nature of the activity?

The type of activity you do: artisan, commercial, industrial, eclectic or agricultural.

How to change the nature of a company’s activity?

You can change the nature of your business activity by declaring one or more secondary activities in the Registry, or by changing your main activity by using Forms M2 or P2.

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