Why is it necessary to create a company to open a car rental agency?

The budget required to open a car rental agency is quite substantial.

In fact, in addition to the purchase of vehicles, which by definition represents a significant investment, car rental involves high operating costs. These include insurance premiums and vehicle maintenance expenses.

Opening a car rental company allows you not only to amortize investments, that is, to adjust your valuation on the balance sheet to take into account wear and tear, but also to deduct expenses from revenue.

Thus, in a company, unlike a micro-company, corporate tax is not calculated on revenue, but on net income before taxes. The taxable base is therefore much smaller than the turnover.

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In addition, the creation of a company allows you to separate your personal assets from those related to your professional activity very clearly.

 Note: Leasing can be an attractive option for financing part of your vehicle fleet. It allows you to pay a monthly fee and renew your vehicles regularly, or exercise the purchase option if you prefer.

SARL, a limited liability company, is the main legal form chosen by car rental companies. 

This legal structure allows you to protect your personal wealth in the event of financial hardship. 

The limited liability company (SARL), as defined by the Commercial Code, allows for the incorporation of a company with up to 100 partners. Its operation is governed by the articles of association, which in turn is regulated by law. An administrator is appointed to represent the company in its dealings with third parties.

The EURL form (SARL with a single partner) is also suitable if you want to open a car rental agency on your own. 

On the other hand, the majority shareholder of SARL (the one who holds more than half of the share capital) is required to be affiliated to the Social Security of Independent Workers (former RSI).