They want one Start a small business, because it makes your heart beat faster when you think about starting your own business? You no longer enjoy your job and have a concept for your self-employment in the drawer?
Then you should take your business idea out of the drawer and make it happen!
There are different ways to get your independence rolling. Classic self-employment, solopreneurship or part-time paths – no matter which form you choose:
Starting a small business will help you achieve your professional dreams.
The sales tax law describes in § 19 the small business regulation . This rule exempts entrepreneurs from sales tax liability as long as certain sales limits are not exceeded.When you start a small business, the administrative burden is reduced. This makes everyday business life easier so that you can fully devote yourself to your independence.When starting a small business, there are certain things you need to keep in mind. We have summarized the 10 most important tips for you in this article.
Table of contents:
- Start a small business to minimize the bureaucratic effort at the beginning
- Small business regulation: uncomplicated accounting, no advance VAT declaration, larger profit margin
- Choose a permissible legal form
- These sales limits apply
- This happens when the sales limit is exceeded
- Starting a small business: How much does it cost?
- Employing employees: Is this possible as a small business owner?
- Start a small business with several people
- How long does the small business regulation apply?
- Small business and small business: are there differences?
Start a small business to minimize the bureaucratic effort at the beginning
The small business regulation comes into force if your turnover does not exceed the specified legal limits. The types of income or specific legal forms are irrelevant.
Anyone who wants to go the route of self-employment can take advantage of the advantages of the small business regulation.In this new situation you will face many challenges, so tax exemption represents a bureaucratic relief.The small business regulation is also suitable for professional areas in which low operating expenses are incurred.
Small business regulation: uncomplicated accounting, no advance VAT declaration, larger profit margin
The administrative effort is limited and bookkeeping is simpler because sales tax and input tax do not have to be booked individually. When you invoice for your service or product, you can exclude taxes.Furthermore, the advance VAT return is no longer required. However, small businesses are also required to submit an annual tax return. However, this is much easier than for companies subject to regular taxation.You can also offer your products or services to customers more cheaply than regular taxed entrepreneurs. Or you can benefit from a larger profit margin with the help of the small business regulation.
Choose a permissible legal form
What legal forms are possible for a small business?The legislature does not make the status of a small business dependent on the legal form. It is usually freelancers or sole proprietors who set up a company in accordance with Section 19 of the Sales Tax Act.If you want to start a business with other people, the legal form can be: GbR be the right choice. Starting a small business with multiple stakeholders can also take the form of a UG (limited liability) or GmbH take place.
These sales limits apply
Section 19 of the Sales Tax Act stipulates that there are two sales limits:
- 22,000 euros for that previous fiscal year and
- 50,000 euros for that current fiscal year.
Both conditions must be met. You calculate the 22,000 euros for the year if the company was founded in the previous year.
If you become self-employed in the current year, the 22,000 euro limit also applies to the current year. You have to estimate how high sales are likely to be.
In the following years, sales may reach 50,000 euros not exceed.
This happens when the sales limit is exceeded
If you, as a small business owner, exceed the sales limit of 22,000 euros within a financial year, you will no longer be considered a small business owner until the following year. This also comes into effect if next year’s sales are below the limit again.The limit of 50,000 euros takes the estimated sales into account, although you must present the forecast in detail to the tax authorities.If there is an unexpected increase in orders and sales exceed the 50,000 euro limit, the small business regulation will no longer apply until the beginning of the following year.You are always responsible for clarifying the requirements yourself. The advice of a competent tax advisor or other expert is worth its weight in gold in order to avoid mistakes and find advantageous ways.
Starting a small business: How much does it cost?
There are no costs for setting up a company within the meaning of Section 19 of the Sales Tax Act.All you have to do is decide for or against small business status and fill out the questionnaire for tax registration.You will definitely have to pay the other start-up costs, such as the business registration fee. The cost of a business license is on average between 10 and 65 euros.It’s also worth taking a look at how you can keep it safe Path to independence create and arrange a consultation with a tax professional who can help you start your small business.
Employing employees: Is this possible as a small business owner?
In short: yes.You are allowed to hire employees as a small business owner. However, it is usually only worthwhile to employ an employee for a few hours or for a limited period of time with a high workload.
Start a small business with several people
If you don’t want to go it alone, get other founders on board.This is possible at any time if you choose the right legal form. Small businesses often opt for a GbR or a UG (limited liability).If you are uncertain or have open questions, it is worth going to an expert (tax advisor, start-up advisor, etc.).
How long does the small business regulation apply?
If the requirements for small business status are met in accordance with Section 19 of the Sales Tax Act, the regulation applies for an unlimited period.You must file a tax return annually. In this way, the tax office can check whether the requirements for small business ownership still exist (checking the turnover limits).
Small business and small business: are there differences?
Two similar terms but different meanings. The status of a small business only relates to sales tax.
- Small business: Register a small business and start a business. This does not require entry in the commercial register. For a small business, you can only choose a GbR or a sole proprietorship as the legal form.
- Small business: Theoretically, all legal forms are possible for a small business. Farmers, foresters and freelancers can be small businesses, but a small business must have a business. A small commercial entrepreneur runs a small business. However, not every small business meets the requirements for small business status in accordance with Section 19 of the Sales Tax Act.
