Setting up a business – where to start?
Own company is a dream of many people, because it is associated with independence, being the boss of your own or flexible working hours.
However, each of us knows that the beginnings can be difficult, and the formalities associated with its establishment or further accounting for VAT, submission of SAF-T or ZUS contribution may seem to be the most frightening.
Are you scared by the notions alone? Relax, thanks to us – SAS TAX Poznań – it will turn out to be a piece of cake and all the formalities or notions will be clear and friendly for you. Trust the specialists.
First, a business plan.
When looking to start your business, you need to ask yourself the most important question: What do you want to do or what do you want your business to deal with. The best way to analyse this aspect will be to create a business plan in the form of a document. What is a business plan? This is nothing more than a plan for your business, in which you include short and long-term goals and their detailed descriptions. The company scenario should also include characteristics and opportunities of the market around you, as well as methods to achieve your goals. When creating your business plan, you should also consider what type of company you want to set up. Namely, should it be a sole proprietorship or maybe a company or a partnership? An entity such as a Company is a complex formation and to run such an undertaking involves finding a good accounting office. On the other hand, running a business as a sole proprietor involves choosing the form of taxation and deciding whether you are able to make the settlements yourself.
Company/partnership or sole proprietorship?
Starting a sole proprietorship is an uncomplicated and completely free process. It consists in registering the company in CEIDG, i.e. the Central Register and Information on Business Activity, by submitting an application for entry. Making subsequent changes in CEIDG is also free of charge. How to set up a business? This can be done in three ways:
- in person at the office,
- on-line – here it is necessary for you to have a trusted profile or a qualified electronic signature (which can be obtained against payment),
- partially on-line – you submit the application on-line, but in order to authenticate it, you need to visit the office within 7 days of submission.
What about the Company? The first step is to prepare the Articles of Association at a notary’s, because it is necessary to register the Company in the National Court Register (KRS). The notary’s fees depend on the amount of the share capital, which also needs to be planned and paid into the Company’s account.
People who already have a thriving sole proprietorship and are looking for an opportunity to further develop their business and attract shareholders should choose to do business as a Company. So, if you are going to start a small business and it is not necessary for you to take on a large financial commitment, then a sole proprietorship is the ideal choice for you.
Selection of the Polish Classification of Activities (PKD)
When registering a company, you are required to choose a PKD code (Polish Classification of Activities). The selection of the code is of great practical importance, since some codes are connected with the choice of a specific form of taxation or with the obligation to use a fiscal cash register, as well as with VAT registration.
Forms of taxation of sole proprietorship
One of the most important issues when setting up your own business is choosing the form of taxation. Already during the first step of registering your business, i.e. with the CEIDG form, you are obliged to indicate the form of taxation you have chosen. This is a decision you cannot put off. Polish regulations allow four forms of taxation, which include:
- constant amount tax – only certain persons can use it and it consists in determining the exact amount of tax, regardless of the income earned,
- flat rate tax, which is 19%,
- flat-rate tax on registered income without deductible costs as defined in the Act on Flat-Rate Income Tax on Selected Incomes Earned by Individuals, and
- settlement according to general principles, i.e. the so-called tax scale – at the rate of 17%, and after exceeding the tax threshold of 32%.
The factor that should be taken into account when choosing the form of taxation is the economic factor, as well as the type of business activity defined in the PKD number.
Do I have to pay VAT or not?
What is VAT? VAT is a tax that is collected when goods and services are traded. You pay VAT regardless of your form of taxation, so you are required to register for VAT in certain cases. To register in this case you need to submit VAT-R at the latest on the day preceding the commencement of sales of goods or provision of services. You are exempt from registration only if:
- you trade exclusively in goods and services exempt from VAT, or
- your sales do not exceed the annual limit of PLN 200 thousand – the so-called subjective exemption
- You provide e.g. medical services and you are subject to the so-called objective exemption
Social Insurance Institution (ZUS) contributions
If you run a business, you are required to account for and pay contributions to the Social Insurance Institution (ZUS), which consist of:
- health insurance,
- the Labour Fund and the Solidarity Fund, and
- social insurance, including compulsory pension, disability and accident insurance, and voluntary sickness insurance.
If you are just starting out in business, you may be eligible for what is known as a “start-up relief”. It exempts you from paying social security contributions and contributions to the Labour Fund and Solidarity Fund for the first 6 months of running your business. After this period, for 24 months you can still benefit from a reduced contribution on a preferential basis.
Do you need the help of an accounting firm?
Another question to ask yourself is whether you need the help of a professional when starting your own business. The fact is that an accounting firm will guide you through every step of starting your own business. By using the help of an accounting firm, you will definitely feel safer and more confident. Completing the necessary documentation and shipping will be in the hands of the Poznań accounting office, and you can focus on starting to develop your business. Nowadays, with such changing regulations, it is worthwhile to take advantage of the help of an experienced accountant. She will calculate the amount of VAT or ZUS contributions for you and will make sure that the official deadlines for filing SAF-T declarations and more are met. For that to take place, of course, it is necessary for a client to grant a power of attorney to represent them before the office.
Another advantage of cooperating with an accounting office is that they offer various software for a monthly fee, which makes keeping records of invoices or issuing them easier and more pleasant. The most important advantage of using services of SAS TAX accounting office is saving your precious time and the feeling of security, because you know that you can count on support and advice of specialists.