How To Choose The Right Form For Your Business?

Start a business or company with limited liability? This is a question that many people ask themselves at the beginning of their business. The truth is that these options are significantly different. Therefore, it is necessary to know the pitfalls and advantages of both options. Business or limited liability company ? We will help you find the right answer.

You have to start somehow

Starting a small business or getting a business license is not the same thing at all. In the case of an s.r.o., it may take approximately two weeks to form. It is necessary to obtain a trade license, issue an administrative tax approval, prepare a founding document or a joint contract. All the documents are necessary for the proposal for registration in the commercial register. If you want to start a business, you must meet the legal requirements – 18 years of age, legal capacity, integrity. You can then submit the application electronically or at the trade office. In any case, the decision whether it is better to use a business or a limited liability company is up to you.

Tax liability

There is also a difference between a business and an s.r.o. when invoicing. While in the case of a sole proprietorship, the issued invoice must be subject to income tax in the year it was issued, it is different in the case of self-employed persons. The self-employed person is only obliged to pay income tax upon payment of the invoice.

You have to guarantee yourself

This is the most important point when making a decision. A company with limited liability, as the name suggests, does not guarantee 100%. Simply put, its manager does not guarantee his personal property. If the eseročka was created with a hundred percent repayment of the basic capital, the owner of the company does not have to worry about his roof over his head. An entrepreneur who would have an obligation towards subcontractors is liable not only for the value of the so-called company property, but also for the value of personal property.

How to deal with changes in companies

Unexpected changes in companies can come at any time. We never know exactly how a business will turn out, even if we have a plan. In the case of termination of business activity, it is easier in the case of a self-employed person. The latter can interrupt the business in any case. This is not possible in the case of an ace.

Also Read: How To Make A Business Plan In 7 Steps