When creating a company appear thousands of questions about the legal and fiscal aspect to be taken. Incorporating a company or become self – employed? Usually, the easiest way is to start our entrepreneurial career as autonomous and then, if all goes as it should, establish ourselves as limited company.
But of course, it could not be so easy. Let’s look at the advantages and disadvantages of the constitution of companies. Then will the circumstances and we believe that guide us one way or another.
Autonomous
A self is a professional who carries out its activity in its own name, i.e. a natural person who performs an economic activity without being subject to an employment contract.
Advantages of being autonomous:
- It is quick and easy to register a business. In about 24 hours since we introduced the papers we can function as such. In addition, it does not require excessive legal matters.
- Control over the company is absolute.
- It is economical because it is not necessary, usually advice.
Disadvantages of being independent:
- You cannot hire relatives to the second degree of consanguinity, if they work in the company must also register as self-employed.
- They can only tax deductible 50% of their expenses.
- If profits are high taxes are paid more. (More than a partnership)
- There is no difference between what we would say is the personal assets and company, so if there is a problem and the company does not work, the autonomous will be obliged to respond with their property for the debts that have been generated.
Limited society
Is a corporation whose capital is divided into equal shares? This does not mean that the number of partners should be broad, but one is enough. The liability of members is limited to the capital they have contributed. It would not be inconsiderable have the support of a professional tax advice when erecting a limited partnership.
Advantages of a Limited Company:
- Your liability to creditors is limited to the capital and assets held in the name of society. This is very different from the self-employed, who do have to deal with the debts with their personal assets.
- The costs are not too high, yes, without the money to create the company.
- Taxes are not very high, in fact, are lower than those of the self-employed.
- Bureaucratic procedures are relatively simple.
- The minimum start capital is 3000 dollars, an affordable figure.
- May be tax deductible almost all of your expenses.
Disadvantages of the Limited Company:
- There is no freedom to spread from one person to another shares and, if so, you need a public deed.
- You cannot go public.
- It is required to take a formal accounting.
- The management of the company will involve additional expenditure.
- They will have to pay corporation tax which, besides being an expense, is quite complex.
Some companies resolve all questions you have about these kinds of issues and will offer professional help you see fit. Have you made ever been a limited company or have you mounted your business as autonomous?