What Are Employment and Activity Cooperatives in France?
What are employment and activity cooperatives in France (Coopératives d’activité et et d’emploi – CAE)? How does this kind of company work in France and how can you join one? What are the pros and cons of this particular status?
Definition: Employment and activity cooperatives in France assist business project holders for the launching of their activity by offering them to become “salaried-entrepreneurs” (entrepreneurs-salariés). The project holder can work with full autonomy to find clients and deliver his services. However, he is bound to the cooperative by an employment contract. The cooperative collects the business sales revenue and gives it back to the project owner in the form of a salary once social charges and management fees have been deducted.
This work status is close to the wage portage (portage salarial) but goes further by offering real individual support to the project owner. It’s an alternative to the creation of a company or working freelance (micro-entreprise).
The legal status of employment and activity cooperatives in France has been specified by the law on July, 31st 2014 on Social and Solidarity Economy. Employment and activity cooperatives in France are cooperative and participative companies (Sociétés coopératives et participatives – SCOP). It means they are participatory managed.
Employment and activity cooperatives host a wide range of activities, from sale of services to trading or artistic activities. However, controlled activities, the ones that need huge investments or a commercial lease, are not accepted.
How do employment and activity cooperatives work in France?
We are going to explain how employment and activity cooperatives work by examining their four main characteristics.
Independence of the “salaried-entrepreneur” (entrepreneur-salarié)
In employment and activity cooperatives in France, the “salaried-entrepreneur” has to search for his customers himself. He is free to negotiate and deliver his services. He doesn’t collect the payments but asks the client to pay on the bank account and to the order of the cooperative.
When an entrepreneur joins a cooperative, he/she signs a contract called a support contract for setting up a business (Contrat d’Appui au projet d’Entreprise – CAPE). Signing this contract will give him/her access to the social protection and professional insurance he/she needs to start a business.
When the entrepreneur send the first invoice and receives their first payment, the support contract for setting up a business evolves into a permanent contract (Contrat à Durée Indéterminée – CDI) and he becomes an employee of the cooperative, earning his own salary. Of course, this salary grows accordingly to his business’ sales revenue.
The “salaried-entrepreneur” can’t have a 0€ salary so his business must have a minimum income in order for him to get a permanent contract.
Also, the contract sets the amount of the fixed part and the variable component of the “salaried-entrepreneur”‘s pay. Indeed, “salaried-entrepreneur” income depends on how much sales revenue one brings to the employment and activity cooperative. In most of the employment and activity cooperatives in France, the income is approximately 50 to 60% of the sales revenue.
The “salaried-entrepreneur” has at least two personal interviews a year. Mission heads of the cooperative advise the entrepreneurs on every aspects of their projects: management, marketing, communications, legal status, commercial development, assistance and even funding. Most of the time, training is also available.
From “salaried-entrepreneur” to “salaried-assistant” or associate
As of three years from the date he joined, the entrepreneur becomes an associate of the the employment and activity cooperative. It is mandatory. As an associate, the “salaried-assistant” participates in the daily life and decisions of the cooperative.
Advantages of integrating an employment and activity cooperative in France
Employment and activity cooperatives in France offer a lot of advantages to entrepreneurs:
- It is a salaried worker status
- As a result, it allows the entrepreneur to contribute to unemployment allowance. It is also possible to combine an unemployment benefit with this status’ income.
- The salaried-entrepreneur is covered by the cooperative’s insurance.
- He is under the general regime for Social Security (régime général de la Sécurité Sociale) and has a mandatory health plan.
- Employment and activity cooperatives in France offers simplified administrative management possibilities. This includes accounts keeping, calculation and payment of salaries as well as processing of tax liabilities.
- The cooperative offers individual support for growing the business.
- This work status allows one to meet and talk with other entrepreneurs about their experience.
- Another advantage is that you don’t have to pay corporate property tax (Cotisation Foncière des Entreprises – CFE). This tax is mandatory for all other legal statuses, including freelancing (micro-entreprise).
- Finally, you can move some of your business expenses to the cooperative (travel or accomodation expenses for example): even if they will be deducted from your wage, it helps you save on social charges.
Disadvantages of integrating an employment and activity cooperative in France
- It’s not allowed for controlled activities, the ones that need huge investments or a commercial lease.
- This is not a good status if your business has high potential because you can’t hire, sign certain contracts or answer certain tender processes.
- The “salaried-entrepreneur” has no SIRET number (numéro SIRET) to his own name. Although he can use the cooperative’s, his activity has no real identity.
Contact employment and activity cooperatives in France
You know what to do : craft your business plan using our free Excel financial and business plan template!
Then, search for the right employment and activity cooperative (Cooperative d’Activité et d’Emploi – CAE) for your business. To help you, here are some websites where you will find directories of french cooperatives:
You may also want to know more about other French business entities.
Don’t forget to check our overview of legal statuses in France.
You may also want to know what a simplified joint-stock company (SAS) is…
And don’t forget to read about french sole proprietorships!