Registering a Business - This is How You Do the Business Registration Correctly - Becoming Self-Employed Step 8
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| Photo by Leon on Unsplash |
In addition, I am looking into the question of whether the business registration is even necessary and what you have to pay attention to.
I answer these and other questions in Part 8 of my series of articles on how to start your own business.
Register Your Business
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| Registering a Business - This is How You Do the Business Registration Correctly - Becoming Self-Employed Step 8 |
Now it goes to the bureaucratic part, the business registration. If you are not a freelancer, you have to register a business.
For most self-employed people on the Internet, this does not involve any particularly bad bureaucracy.
Who needs a business registration and everything related to it is clarified in the following.
When is a Business Registration Necessary?
In Part 6, The Right Legal Form, I already explained how the self-employed and freelancers differ.
The self-employed have to register a business, freelancers do not.
According to Section 15 (2) EStG, a business can be identified by the following points:
- Independent
You have to work independently and be responsible for your own decisions. - Sustainable
A business has to be sustainable and therefore designed for the long term. - Profit-Making Intent
This is arguably the most important characteristic and ensures that even simple websites with a few advertising banners lead to the obligation that you have to register a business. - Participation in Commercial Traffic
If you trade goods and services with other companies, self-employed persons, or end customers.
Not all conditions have to be met, but most of the time it is. Even bloggers, affiliates, and website owners, the money will have to register a business.
The registration takes place at the local trade office and you only need your identity card.
Usually, everyone is allowed to register a business. But some businesses require a permit, such as taxi companies or restaurants.
You can submit your business registration up to 3 months retrospectively, but you shouldn't wait too long.
Content of the Business Registration
Filling out the business registration is not particularly difficult, but you should make sure that you think carefully about the “business purpose”.
The “commercial purpose” should not be kept too general, as this could otherwise be criticized. But you shouldn't be too special either, otherwise, you have to re-register the trade later, which in turn costs time and money.
“Write and sell” would be too general. “Transfer service from videotape to DVD” would certainly be too narrow.
The business registration costs around 30-50 euros, although this varies a little depending on the location.
Business Tax
Briefly something about trade tax. With the business registration, you are liable for trade tax in addition to income tax.
However, you only have to pay trade tax if the profit is more than 24,500 euros per year (this is an exemption).
In this article, I write more about how business tax is calculated.
Register Initial Contact with the Business
Tax Office
After registering the business, various offices receive the relevant information and that's why the post usually comes from the tax office after a few weeks.
If this is not the case even after months, you should ask the tax office. You shouldn't think that you're getting around there just because you've been forgotten.
You receive a questionnaire from the tax office for the tax registration of a commercial enterprise or self-employed activity. You can send this to the tax office with the first advance VAT return.
Then you also get a tax number and if you want to operate internationally (e.g. advertising customers from abroad), you need a sales tax identification number.
More about taxes later in another article in this series.
IHK
For tradespeople, membership in the Chamber of Commerce is compulsory. The IHK offers a range of services that can be used. In addition, the IHK fulfills some activities that the legislature has imposed on it.
There are no IHK contributions if the annual profit is less than 5,200 euros.
Otherwise, the contribution is made up of the basic contribution and a percentage allocation. The amount varies from region to region and should be requested from the responsible Chamber of Industry and Commerce. Depending on the size of the company, it usually costs between 30 and 300 euros a year.
Entrepreneurs in the 1st and 2nd year are completely exempt from the IHK fee if the profit does not exceed 25,000 euros. In the 3rd and 4th years, you are at least exempt from the IHK surcharge if this limit is also not reached.
Chamber of Crafts
If you start a trade, there are a few extra regulations. In some cases, you have to register yourself in the handicrafts register beforehand, which in turn requires a master craftsman's certificate.
However, this should not affect most of the readers of my blog, as this is primarily about being self-employed on the Internet.
Therefore, there is no further information on the subject of craft here.
Employer
If you register a business as a part-time job, you have to report this to the employer in advance in advance and writing and have this approved.
As described in Part 5, Doing part-time self-employed, the employer can not generally prohibit part-time work. But you have to inform him about it in detail and precisely.
And if there are concerns about a conflict of interest, then you have to clarify with the employer exactly what you are doing and what you are not doing.
Employment Agency
You should also not forget to inform the employment agency in good time if you start unemployment.
More information on this in Part 4 Starting a business as a pupil, student, or out of unemployment.
Register Business - Conclusion
I found starting a business relatively painless, even if you have a few ways and have to fill out a few forms.
However, this is much more complex, for example for restaurant operators. As a self-employed person on the Internet, it is much easier.
With the business registration in hand, you can finally start your own business.
So It Goes on
The next part of the article series Doing Yourself is about meaningful and necessary business papers and how to get them cheaper but still of high quality.
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