One of the first decisions you must make when starting a project is the legal form under which you will operate. Working as a freelancer is usually the easiest, but it is not always the most convenient . In some cases, it is more interesting to create a Limited Liability Company (SL).
What is limited liability?
Limited liability is the legal principle under which a Limited Liability Company is established, a legal form that protects the entrepreneur by limiting his liability to third parties.
Unlike self-employed persons , who must respond with their denmark mobile phone number data personal assets if the business goes bankrupt and drags debts or receives a lawsuit that they cannot pay, the principle of limited liability implies that the entrepreneur can only lose what he has invested in the company . His personal assets will not be compromised, unless it is proven that he has acted in bad faith.
Advantages of creating a limited company
Liability towards third parties is limited to the company's share capital and the assets it owns.
It is possible to form a single-person limited company, so it is not necessary to have a minimum number of partners.
Its incorporation costs are affordable , around 600 euros, and the minimum share capital required is 3,000 euros, which you can use to finance investments in the company.
The process of incorporation and management is simpler . Since the Limited Liability Company has a small capital, its incorporation is quicker and the bylaws require less planning than a Public Limited Company . Its legal and accounting costs are also usually more affordable.
The entrepreneur can assign himself a salary and deduct it as a company expense.
It is easier to access credit offered by banking institutions, since a limited liability company conveys a more professional and solvent image.
Possibility of attracting larger clients and accessing larger projects since a company offers more confidence and security.
Reduction of the tax burden when certain profits are exceeded , since the corporate tax is fixed at 25%, while the personal income tax rates are progressive. In addition, according to the law supporting entrepreneurs, during the first two years in which you make a profit you can pay tax at 15%.
Requirements and procedures for creating a limited liability company
1. Register the company name.
At the Central Commercial Registry , either in person or online, request the negative certificate of corporate name, a document that certifies that your company name is unique. With this certificate you reserve the name for your company for six months, after which, if you have not registered it before a notary, you will have to renew it.
2. Deposit the share capital into a bank account in the name of your company.