Online fitness trainer

Online fitness trainer

 

Question:
Hello!

I want to start a business for an online fitness trainer. What kind of company should I make and how should I proceed?

Thanks in advance!

Ltd., freelance, online fitness, accounting services, Varna, Ruse, Plovdiv, Burgas, Sofia

 

Answer:

Hello,

In your case, the most suitable options to develop the activity described by you are two - to register a Single Limited Liability Company (EOOD) or to register as a freelancer. The main differences between the two options are the following:

From a tax point of view, things look like this:

- in the free profession you declare the amount of income for the year. From the amount thus received you deduct 25% of legally recognized expenses and the insurances paid during the year and you owe 10% tax on the amount thus received.

- with EOOD you declare the amount of income and expenses related to your activity. If the income is more than the expenses, then you make a profit and this profit is taxed with 10% tax.

From an insurance point of view, things are as follows:

- in the case of a freelance profession, you are insured monthly, and accordingly you must declare and pay insurance every month, on the minimum insurance income. At the end of the year, when submitting the annual tax return, an equalization is made. This equalization looks at the realized income during the year, and if its amount exceeds the amount on which you have been insured, you must add insurance on the difference. The amount on which social security contributions are paid on an annual basis may not be higher than the maximum insurance income for the year.

- with EOOD the insurances are again paid on the minimum insurance income for the year, as the difference is that there is no annual equalization of the insurance contributions.

Ie From a purely tax and insurance point of view, you will need to assess and make a plan about what income you expect to receive and what expenses you would have. Only in this way could you determine which form of activity is more economically viable.

Apart from the differences from the tax and insurance tax point of view, there are several purely functional differences:

- The money you earn as a freelancer is really your money and you can "spend" it whenever and for whatever you want. At EOOD, the money that the company earned remains with the company. If you want to have this money as an owner, there are several options - to give a salary, to give a loan or after the financial year the company has expired, if it has made a profit, then you will be able to distribute the profit as dividend (but you will have to pay an additional 5% dividend tax on this amount).

- as a freelance profession you can work only you, ie. if you expand your business, you will not be able to hire additional staff. At EOOD this restriction does not exist and in case of possible expansion of your activity, you can easily hire staff.

- if you practice your activity as a freelancer, you will not have the obligation to issue a receipt upon receipt of cash. For EOOD, this relief does not apply and if you receive cash, you will have to buy a cash register.

- in order to register as a freelancer, you need to provide a diploma or some other certificate to the set of documents (application and declaration), which certifies your competence to provide the services you will perform. The registration itself is done by Register Bulstat within 24 hours, and there is a state fee of BGN 10.00. To register EOOD the procedure is a bit longer and more complicated. To begin with, a set of documents is prepared (memorandum of association, minutes of the constituent assembly, management contract, several declarations and a sample signature). Some of the documents are notarized. Then you need to open a fundraising account at a bank of your choice to deposit the start-up capital. The minimum is BGN 2.00. The import note for the paid-in capital, together with the other prepared documents shall be submitted to the Commercial Register, no later than 7 calendar days from the date of the constitutive act, and the registration shall be made within 7 working days. . The state fee is BGN 110.00.

We hope we have been helpful to you.

Greetings!




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