Welke ondernemingsvorm kiezen als startende zelfstandige?

Which business structure should you choose when becoming self-employed in Belgium?

You’ve developed a service or have a product in mind and want to start your own business. But before you can become self-employed, you need to choose a business structure. When you’re starting out, you have several options to choose from. You might already have heard of a BV/SARL, BVBA/SPRL, NV/SA, a partnership, or a sole proprietorship.

In this article, we discuss the pros and cons of the two most popular business structures in Belgium: sole proprietorship and partnership.

What business structures exist?

When you become self-employed for the first time, you can choose between two business structures, namely, a sole proprietorship or a partnership. This choice shouldn’t be taken lightly, as there are significant differences in terms of liability, administration, start-up costs, and in some cases, the taxes and VAT you have to pay.

What is a sole proprietorship?

As the name suggests, this type of business structure has only one owner who bears full responsibility for the business activities. Legally, the sole proprietorship is a ‘natural person’, meaning there is no ‘legal personality’. As a result, the owner of the sole proprietorship is personally liable and is responsible for all losses, but on the other hand, all the profits are also theirs.

Pros and cons of a sole proprietorship

Sole proprietorship is the most commonly chosen business structure for people becoming self-employed in Belgium. Here are the advantages and disadvantages at a glance.

👍 Advantages

👎 Disadvantages

What is a partnership?

You can set up a partnership on your own, or you can choose to set it up together with two or more people. A partnership has its own legal personality, meaning that the partners are not personally liable for mistakes or losses the business makes.

Compared to a sole proprietorship, though, it is much less straightforward to pay out profits to yourself. This is because the income of a partnership is taxed under the corporate tax regime. If you want to pay yourself as a partner or owner, this is also taxed under the personal income tax regime.

There are different types of partnerships, such as a private limited company (BV/SARL) or a public limited company (NV/SA), each with different advantages and disadvantages.

Pros and cons of partnerships

There are several types of partnerships in Belgian law. These generally share the following pros and cons, with minor differences among them.

👍 Advantages

👎 Disadvantages

Which business structure is best when starting as self-employed?

Making the right choice when selecting your business structure can prevent unpleasant surprises in the future. We’ve put together a series of questions that you should go through and answer for yourself. Based on your answers, you can weigh the pros and cons of sole proprietorship and partnership and make an informed decision about your business structure.

Do you think you’ll generate much more profit than you need to live on? Then look into a partnership.

High risks and personal liability are not an optimal combination. A partnership can offer a solution in this case.

A sole proprietorship brings simplified and straightforward accounting.

If you have little or no start-up capital, it’s best to start with a sole proprietorship. You can always switch later.

You cannot set up a sole proprietorship with more than one owner.

Risky activity? Then consider a partnership.

Choosing your business structure as a starter

As a first-time entrepreneur, you should approach your choice of business structure with caution. It’s important to carefully consider your personal situation and your business ambitions.

If you want to undertake a risky activity, it’s worth considering whether the protection of a partnership is the optimal choice. On the other hand, if you don’t expect much income and want to start quickly and cheaply, then a sole proprietorship is an excellent option.

Your personal tax coach

Do you still have questions after reading this article? Then contact Accountable’s Tax Coaches for free and with no obligation. They’ll be happy to assist you!

Valesca Wilms, Content Manager
Updated on

As a Content Manager at Accountable, Valesca offers her readers an exciting and engaging content experience. Given her own experience as a freelance content marketeer & copywriter, Valesca knows the ins and outs of tax returns for the self-employed. It’s her goal to provide you with easy and understandable solutions to handle your tax returns stress-free with Accountable.

Exit mobile version