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.
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.
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:
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:
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.
There are different types of taxes to be paid in an one-man business. First, there is turnover tax, or VAT. In addition, income tax has to be paid on the profits made. Do you employ staff? If so, income tax must also be paid. An one-man business also has tax advantages due to various deductions. Deductions may be deducted from the profit made. After that, income tax is calculated. The higher the deductions, the lower the tax payable.
The main tax deductions for a sole proprietorship are:
Are you planning to start an one-man business? Congratulations, that's an exciting step! But when it comes to running a business, there is a lot to sort out. Don't worry, because our team of tax advisers can help you with this. We can advise you on selecting the most suitable legal form and preparing the necessary legal documents. Call or Whatsapp us today for a no-obligation meeting on + 31(0)40-3035112. We are ready to help you on your way!