Registration of a company or individual?

Registration of a company or individual?

 

 

Question :

Hello, my husband wants to be engaged in making and repairing furniture. But as a beginner does not know whether to do a company registration or to register as an individual (a free trade ) . Would you give me advice on what to do do. Thank you in advance.

 

Answer :

Hello,

It is indeed possible to do so in both ways. If it starts as a natural person, it must register in the Commercial Register (Bulstat Register) as a freelance practitioner. Here are a few things to consider. It should be borne in mind that there is no exhaustive list of the liberal professions in the Bulgarian legislation. In the Personal Income Tax Act, you have a definition that you can use to find out if you are in the circle of clubs carrying out such activity:

"Persons exercising a liberal profession" are: accountants; consultants; auditors; lawyers; notaries; private enforcement agents; jury; court and prosecutors' experts; licensed appraisers; representatives of industrial property; medical specialists; translators; architects; engineers; technical managers; culture, education, art and science; insurance agents; as well as other natural persons for whom both the following conditions are present:

(a) carry out, on their own account, a professional activity;

(b) are not registered as sole traders;

(c) are self-employed persons within the meaning of the Social Security Code.

If you fall into the circle of those listed, you have an obligation to register in BULSTAT register.

The registration of a liberal profession must be done within 7 days of starting the activity itself.

Registration is as simple as possible and consists of submitting a completed registration form to a self-employed person.

As grounds for the registration, Art. 3 para. 1 pt. 9 of the BULSTAT Register Act.

The application must be accompanied by documents proving that you have the necessary qualifications to do so. Such a document may be a diploma for completed education, a professional certificate for the acquisition of a profession, etc.

At the end of the year, a tax return is also filed and taxed as ET, although it is not ET. His only advantage is that he does not have to register a cash register. From the point of view of the amount of taxes and social security contributions, there is ultimately no difference in the final annual amount.

The difference comes from the fact that if you make registration of a company (E / OOD) and is provided as a self-employed person, the profit (after paying 10% income tax) can be used for personal use only the amount distributed as dividend ( after paying a 5% dividend tax on the amount of the dividend) only after the business year has ended.

And freelancers can use funds from operations when asked, but at the end of the year will still pay income tax (even if it is used it already) at a rate of 15%.

In both cases, once carrying out an economic activity, it must keep records of the revenue and expenditure relating to that activity.

Greetings.