Should I be self-employed or sole trader?

Should I be self-employed or sole trader?


Secondly, liability must be taken into account. In case of non-payment to third parties, the way to face these debts is different if you are self-employed or a company. If you are self-employed, you will have to respond with your personal assets, present and future. In addition, in the case of marriages with community property regime, this obligation can be extended to the spouses.

On the other hand, in the case of companies, a distinction is made between individual and corporate assets. In the case of the partners, they will have to pay with the contributions made by each one of them. It should also be considered that the Entrepreneurs Law of 2013 promoted the figure of the Limited Liability Entrepreneur, which gives the possibility of leaving out of liability the habitual residence (if its value does not exceed 300,000 euros).

What is the difference between sole proprietorship and self-employment?

Self-employed and entrepreneur are, from the outset, different concepts. The former refers to a natural person who carries out an activity on his or her own account and the latter refers to an organization behind (a company), of which he or she is the owner.

What is the legal minimum amount to become a sole proprietorship?

It has no specific legal regulation. In its business activity it is subject to the general provisions of the Code of Commerce on commercial matters and to the provisions of the Civil Code on rights and obligations. Characteristics: Capital: There is no minimum legal requirement.

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Why choose to be a sole proprietorship?

Advantages of being a Self-Employed Individual Entrepreneur

If the business consolidates and grows, you can always change to a Limited Company. It is the fastest, simplest and most economical way to set up a business. You keep full control and management of the company. No prior incorporation process is necessary.

Self-employed entrepreneur examples

It is generally associated with self-employment, since the owner of the company is also a worker in the company, regardless of the activity carried out and the type of work performed.

When creating a company, this figure is usually chosen mainly by retail businesses (clothing stores, food, stationery, gift items, jewelry stores, newsstands, etc.), and professionals such as plumbers, electricians, painters, decorators, etc..

It can be more economical, since it does not create a legal entity other than the entrepreneur himself, so there is no need to notarize (with the economic cost involved) or to deposit a minimum capital stock.

The individual entrepreneur carries out the business activity in its own name, assuming the rights and obligations derived from the activity. His liability to third parties is universal and he is liable with all his present and future assets for the debts incurred in the activity of the company.

What type of company is a freelancer?

In case of having more capital or more assets, the self-employed must be incorporated as a corporation. … As for the capital, in both cases, there is the option that it can be contributed in the form of assets.

What is the difference between self-employed and limited liability company?

The liability of the self-employed is unlimited and that of a limited company, as its name indicates, is limited. This means that the self-employed would be liable with all his personal assets for debts owed to third parties, but the limited liability company would only be liable with the company’s assets.

What is a self-employed sole proprietorship?

It is defined as a person who performs an economic or professional activity for profit and on a regular, personal, direct and predominant basis, for a natural or legal person called customer, on whom at least 75% of his income is economically dependent.

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Disadvantages of a sole proprietorship

Before going into detail, however, it is necessary to distinguish between the two occupations in order to avoid problems with the tax authorities. First of all, it is necessary to define whether your activity is professional or business.  In the first group, those that a natural person develops individually and directly.  Lawyers, veterinarians, architects, notaries, teachers, commercial agents, etc.

Meanwhile, business activities include those carried out within an organization.  An architect who has a construction company, a herbalist who operates a store in his sector or a veterinarian who has a veterinary clinic.

Although the same activity can fit into both the professional and the economic spheres, we advise you to inform yourself thoroughly, since the taxes paid in each case are of different amounts.  In fact, if you make a mistake and exercise an activity under a tax regime that does not correspond to you, you could be obliged by the Tax Agency to pay the difference that arises, as well as to face possible penalties.

What is the minimum capital of a limited liability company?

The Capital Companies Law requires for the incorporation of Limited Liability Companies a minimum capital of 3,000 euros (divided into the corresponding shares).

What is required to form a sole proprietorship?

Steps to register a sole proprietorship in Guatemala

You must go to, and fill out the Individual Merchant and Mercantile Company Registration form (free of charge). You must export it to PDF, download it and print it.

What type of company can a single Entrepreneur create in its legal form?

For sole proprietorships, the sole proprietorship or sole proprietorship formula is the most appropriate.

Company or self-employed

What steps do I have to take to register as an individual entrepreneur (self-employed)? You are here: Home / Faqs – Frequently asked questions / What steps do I have to take to register as an individual entrepreneur (self-employed)?

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To begin with, you must register in the census of businessmen and professionals of the Tax Agency (Hacienda). Then, you have to register in the Régimen de Autónomos (Self-Employed Regime) with the Social Security. Both procedures are mandatory.

There are some situations where the obligation to register as self-employed is exempted, although it has to be analyzed if it is a habitual activity or not and if you have another main source of income. But these are exceptional situations, which will be assessed by an expert, so we recommend that you get good advice.

In addition, it is possible that your activity requires more specific procedures, such as registrations (so that your activity has a special regulation) or licenses such as environmental licenses, if you have an office or premises (which is processed at the Town Hall).

In any case, do not forget that this registration as an individual entrepreneur can be processed at the Points of Attention to the Entrepreneur ( It can be done telematically and at no cost.