FORM OF ENTERPRISE

Sole proprietorship

Table of contents

Learn all about the pros and cons of setting up an one-man business. Find out if this business structure is right for you!

An one-man business is a form of business in which one person forms the company. That person is both the founder and owner of the business. This type of business form is popular among start-ups because of its easy incorporation and flexibility. As owner, you are responsible for all decisions, are personally liable for any debts and taxes, and get to keep all profits made. It is important to note that a one-man business is not considered a separate entity, so there is no difference between private and business assets.

Advantages and disadvantages of an one-man business

Choosing the right business form is essential for setting up a business. It is important to carefully consider whether an one-man business suits your needs and objectives. To make the choice easier, we have listed the pros and cons of sole proprietorship.

Advantages of an one-man business

A sole proprietorship offers many advantages for the entrepreneur looking for a simple and flexible way to start and run a business. We have listed the advantages of an one-man business for you:

You can act independently, make decisions and set your own work pace.
An one-man business is easy to set up in the Netherlands.
No initial capital is required.
You have tax advantages when profits are low.
You have lower costs than with a limited liability company.
Subject to conditions, you are entitled to self-employment deductions and other deductions.
No articles of association are required.
You have no obligation to prepare financial statements and no obligation to publish financial figures.

Disadvantages of an one-man business

An one-man business does not have segregated assets. You are privately liable for all debts. Creditors of your business can therefore also claim your private assets. In case of bankruptcy, you will also go bankrupt personally. If you are married in community of property, your partner is also liable for the debts. You can avoid this by having prenuptial agreements drawn up at the notary. We have listed the other disadvantages for you below:

With a sole proprietorship, you are privately liable for the company's debts.
Een eenmanszaak kent een iets hogere belastingdruk dan bijvoorbeeld een bv.
You have weaker access to the asset market (harder to take out loans).
The entrepreneur must take additional insurance for disability and make pension provisions.
If you are married in community of property, your partner is also jointly and severally liable for debts arising from the business.

Starting an one-man business

As an entrepreneur, you can set up a maximum of one one-man business, but the nice thing is: it allows you to have multiple trade names, activities and branches! Fortunately, starting an one-man business is easy and inexpensive. In fact, you can even start it at your kitchen table without the help of an expensive lawyer or notary. How? By simply registering once in the Chamber of Commerce Trade Register for just 75 euros.

Taxes and deductions

Er zijn verschillende type belastingen die betaald moeten worden bij een eenmanszaak. Ten eerste is er de belasting over de omzet, oftewel de btw. Daarnaast moet over de gemaakte winst inkomstenbelasting betaald worden. Heb je personeel in dienst? Dan moet er ook loonbelasting betaald worden. Een eenmanszaak heeft door verschillende aftrekposten ook belastingvoordelen. Aftrekposten mogen worden afgetrokken van de gemaakte winst. Daarna wordt de inkomstenbelasting berekend. Hoe hoger de aftrekposten, des te lager de te betalen belasting.

The main tax deductions for a sole proprietorship are:

Self-employment deduction: if the hours criterion is met.
Starter deduction: in the first five years of your entrepreneurship, you have three additional deductions.
MKB-winstvrijstelling: na aftrek van de andere aftrekposten mag 14% van de overgebleven winst worden afgetrokken van de gemaakt winst. Vanaf 2024 is dit nog maar 13,31%)
Co-work deduction: depending on the number of hours your partner contributes to the sole proprietorship, a percentage of the profit may be deducted.
Tax credit for research and development: if your company is involved in technological and innovation innovations, you may be eligible for a subsidy.
Stakingsaftrek: pas van belang wanneer de zaak wordt opgeheven.
Investment deduction: depending on the cost of the investment(s) made, money can be deducted from profits.

Starting a business?

Bent je van plan om een eenmanszaak te starten? Gefeliciteerd, dat is een spannende stap! Maar als het gaat om bedrijfsvoering, moet er veel geregeld worden. Geen zorgen, want ons team van belastingadviseurs kan je hierbij helpen. Wij kunnen je adviseren bij het selecteren van de meest geschikte rechtsvorm en bij het opstellen van de noodzakelijke juridische documenten. Neem vandaag nog contact met ons op voor een vrijblijvende kennismaking. We staan klaar om je op weg te helpen!