The sole proprietorship is the simplest form of business. A sole proprietorship has only one owner and that is a natural person. This natural person is liable with all his/her assets for all debts of the business. A sole proprietorship is not a legal entity. A one-man business does not mean that only one person is employed; you can have staff in a one-man business.
Profits from the business are taxed at the owner's premises in Box 1. If, as the owner, you work more than a certain number of hours in the business, there are certain tax breaks for entrepreneurs. If you make more profit than you spend in private, it is usually more advantageous, fiscally speaking, to opt for a BV, NV or cooperative.
Because creditors can also claim your private assets, it is a good idea to get informed about the possibilities to protect your private assets. Sometimes it is useful to do business through a BV, even though it is not yet fiscally interesting.
If you wish to sell the company, each asset must be transferred separately. Debts cannot be transferred without the cooperation of the creditor. So, as a seller, you basically remain liable for all debts. The transfer of all or part of a business usually takes place by means of a so-called asset-liability transaction.
There are no formalities attached to the incorporation of a sole proprietorship. All you have to do is register the sole proprietorship in the trade register of the Chamber of Commerce.
For more information on limiting liability, please contact us. We will be happy to advise you.
