Should I start a one-man business or a company?
Published on 02/06/2020 in Start Like A Pro
The most important decision as a starter is the choice of legal form. Roughly speaking you can choose between a one-man business or a company. Of course, with the latter you also have to decide in which form you intend to conquer the world.
Some claim that a company is the best legal form for any business, regardless of size or industry. This is obviously not true. How useful specific legal forms are for a company depends on several factors that must be considered in light of the specific situation of the new business.
One-man business
The major advantage of a one-man business over a company is the freedom enjoyed by the entrepreneur. There aren’t as many obligations so you can move through the business landscape with more flexibility and agility. Also, a one-man business is subject to fewer legal obligations in terms of decision-making, profit appropriation, etc. There’s also considerably less administration involved.
Company
The major advantage of a company lies in the more advantageous tax regime and the fact that in most cases liability is limited. This means that if things ultimately go wrong, your hard-earned savings are not lumped in together with the professional capital in your business.
There’s an African proverb that says: “If you want to go fast, go alone. If you want to go far, go together”. There are important differences between these two forms of collaboration so evaluate them carefully before you start. Or click here for an overview of all legal forms in our country.
Good luck chasing your entrepreneurial dreams!
Source: UNIZO
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