During the foundation
Depending on which option was chosen at the end of the business start-up, there are certain ways that business start-ups must take. The choice of legal form, for example, in a start-up of great importance, while it is cleared in a takeover for the time being. The question of various funding measures that budding self-employed people can use for online marketing projects is just as important as the taxes payable.
- legal forms
- funding opportunities
The choice of legal form is initially based on whether founders start alone or with partners in self-employment. Also the question of the limitation of liability determines the decision as well as the possible costs by the selected legal form, for example due to a necessary notarial certification. In general, a distinction is made between one-person start-ups, partnerships and corporations. The following information serves as a guide. The advice of a specialist is recommended to every founder and founder.
If business start-ups want to start their own business with their idea for an online marketing project, they can choose between the legal form of sole proprietorship, one-person limited liability company and one-person company. These differ, among other things, with regard to the liability issue, the expense of registering one’s own company as such, and the amount of the share capital. Self-employed individuals, for example, decide on the size of the start-up capital themselves, but are fully liable to private assets.
In a one-person limited liability company is liable only with the company assets. When founding, however, a minimum capital of 25,000 euros must be available. For the one-person company, the amount of the capital stock is even 50,000 euros. In addition, there must be a supervisory board of at least three persons. Entirely on your own the establishment of a company with this legal form is therefore not possible.
The easiest way to start a sole proprietorship. It therefore serves well as an introduction to self-employment. Over time, the legal form can or must be changed, for example, when partners are added. The biggest advantage of a sole proprietorship is that no minimum capital contribution is necessary. In 2008, this legal form accounted for around 70 percent of all corporate forms in Germany.
For a partnership, at least two people must join to form a business. There is no minimum capital required in most forms. The shareholders are then liable with their own assets. Possible is the foundation of:
- Civil Society (GbR)
- Limited partnership (KG)
- Open Trading Company (OHG)
- Partnership company (PartG)
- GmbH & Co. KG.
The GbR is the simplest form of business partnership and arises automatically when founders work together with a partner. With a KG there is the possibility to join with a partner, who wants to hold only limited. This is referred to as a limited partner or Teilhaft liable to the amount of his deposit, while the entrepreneur, the so-called general partner vouches with his private assets. He has the sole right to decide. If you want to limit your liability as a general partner, choose GmbH & Co. KG. However, a minimum capital of 25,000 euros is necessary.
The formation of a corporation is usually more complex than that of a partnership or a sole proprietorship. The advantage, however, is that liability is always limited. The corporations include:
- Limited liability company (GmbH)
- Corporate company (UG)
- Joint-stock company)
- registered cooperative (eG)
In the case of corporations, liability for the shareholders or shareholders is limited to their contribution. These persons do not have to be actively involved in the management, but can only provide their capital. In view of the fact that many start-ups are initially small online projects with little start-up capital, as a legal form for many, corporations will only become important as the company grows. You find further information on the topic here.
Special features – the mini-GmbH
Since the entry into force of the Act to Modernize the GmbH Law and to Fight Abuses (MoMiG) on November 1, 2008 founders can more easily start a capital company. For with the mini-GmbH, which is also referred to as a corporate company (limited liability) – short UG – is no minimum capital of 25,000 euros needed. Founders and founders will be required to pay one Euro as share capital for this form of business start-up. Like the GmbH, the UG must also be founded by the notary and entered in the commercial register. The mini-GmbH is just suitable for people who have little money available and want to limit their liability. As of January 1, 2012, 64,371 mini-GmbHs already existed in Germany.
Entrepreneurs do not have to finance their online marketing project completely on their own. There are many support programs that support prospective self-employed before, during and after the foundation. The funding possibilities of the federal government concentrate on the fact that entrepreneurs do not refrain from a professional advice because of the costs. Unemployees can access the start-up grant or the start-up allowance. In addition, the Kreditanstalt für Wiederaufbau (KfW) offers a loan with low interest rates.
Start-up consulting, management consulting and start-up coaching
Depending on which phase of the start-up self-employed are, they can consult various experts. Business start-up consultants help, for example, before the actual start of self-employment. Some federal states subsidize such services with a voucher. If the foundation is at least one year old, the federal government provides a grant if the help of business consultants is used. Intensive is the founder coaching, in which founders are cared for 12 months by a coach. Depending on the state, the financial support varies between 3,000 and 4,500 euros.
Start-up grant and start-up allowance
The start-up subsidy is aimed at recipients of the unemployment benefit I. If the unemployment is terminated by the founding of the company, if there is a business plan and there is still a residual entitlement to unemployment benefits for at least 150 days, the federal government supports start-up entrepreneurs in two phases. First, a subsidy amounting to the last unemployment benefit is paid for six months. In addition, an amount of 300 euros for statutory social insurance added. The latter may, under certain circumstances, be paid in the second phase for a further nine months. The total funding period is 15 months.
The starting fee is intended for recipients of the unemployment benefit II or Hartz 4. Depending on how long the applicant is unemployed and how large is the need community, the amount of funding calculated. In addition, a loan of 5,000 euros can be requested for the procurement of physical assets. The maximum funding period is 24 months.
KfW promotional money
Self-employed persons can apply for the company loan of the Kreditanstalt für Wiederaufbau (KfW) at the house bank. The condition is that the business started more than three years ago and the applicant is creditworthy. This funding measure is therefore aimed more at self-employed people in the online marketing sector, whose companies have left the difficult start-up phase behind. The advantages of a KfW loan are the very favorable interest rate and a fixed interest rate of up to 20 years. For start-up founders, this means that they receive debt capital on favorable terms and can plan for the long term future-proof due to fixed interest rates. Further information can be found on the KfW website.
Taxes that are due for entrepreneurs are an important issue for any business start-up. Even those who become self-employed in the network have to work hard on it. The most important types of taxes are income tax, sales and input tax and trade tax. They must be dealt with exactly, so that it comes later to no financially painful claim from the tax office. A tax advisor should be consulted in any case.
Income must always be taxed, as well as the income of start-ups in the online marketing area. The tax rate depends on the amount of the profit. However, there is a basic allowance that is tax-free and in 2012 is € 8,652 for single persons and € 17,304 for married couples. If the profit is higher, the tax must be higher than the tax deduction. It is due until May 31 of the following year. However, the tax office stipulates prepayments of income tax, which must be paid on a quarterly basis.
Caution: If the profit is higher than expected, founders often have the problem of paying the arrears and prepayment due. This tax should therefore not be underestimated.
value added tax
VAT or sales tax is always payable when entrepreneurs sell goods or services. For most products, it is 19 percent, otherwise 7 percent. The sales tax is indeed paid by the customer, but the money must continue to be paid to the tax office and is not intended for your own purse. Since founders not only write invoices, but also settle them themselves, the sales tax for such operating expenses can be deducted from the sales tax, which is paid to the tax office. This process is referred to as input tax deduction. The difference between value added tax and input tax is then paid to the tax office.
In the first two years after the online marketing project is founded, the VAT return must be submitted electronically to the tax office by the 10th of the following month. If the sales tax remains below € 7,500 thereafter, a quarterly advance notification is sufficient.
Exceptions – small business regulation
Small business owners can be exempted from VAT. In addition, their sales in the previous calendar year must not exceed € 17,500 and are unlikely to exceed € 50,000 in the current calendar year. The invoices to customers are then issued without VAT, which has the advantage for private entrepreneurs that they can offer their goods cheaper. However, when small businesses are used, there is no input tax deduction. Start-ups can thus lose money on large business acquisitions because they can not offset the sales tax due for them with the sales tax on their sold products. If the decision is taken against the small business rules, the decision is binding for five years.
The trade tax is due when self-employed entrepreneurs operate, which is especially the case for online trading. But also the areas of crafts, services and industry are part of it. The amount of the tax depends on the commercial income and the location of the company. Natural persons (compared to legal entities such as corporations) and partnerships are granted a deduction of 24,500 euros per year. It is only for amounts above that the business tax has to be paid.
Every entrepreneur – also in the online area – has a very individual need for insurance, so that a personal consultation by an expert is always helpful. Especially at the beginning of the business start-ups, founders save on their insurance premiums. There are some important safeguards that should not be left out. In addition to compulsory health insurance, these include occupational disability insurance, public liability insurance and at least one private pension insurance.
Start-ups are much more dependent on their labor force than, for example, employees. Especially in the first, intensive and exhausting months and years after the foundation of the online marketing project much depends on the ability to work. If the self-employed become permanently ill and can no longer work, that means not only the end of the business, but also the total financial loss.
Many self-employed are unaware of this danger as they enjoy the best of health. But this can quickly change as a result of an accident, depression, burn-out or other illness. In addition, they are not entitled to the reduced earning capacity pension if they no longer voluntarily pay into the statutory pension insurance or have already fulfilled the waiting period through an employee relationship. Occupational disability insurance is therefore all the more important in protecting oneself from the financial and existential consequences of incapacity for work. In the insured event, the insurance pays a monthly pension determined by the founder of the business.
The public liability insurance takes over claims for damages of third parties, which have been caused by the operational activity of the founder. Depending on what kind of online marketing project it is, this insurance is very important. If an online store is managed from home, it is hard to imagine that the work will result in personal injury, property damage or financial loss. That does not mean that the insurance is not necessary. At the latest when the company grows, employees are added and a direct customer contact develops, the public liability is a compulsory insurance for company founders. Public liability insurance should always be tailored to the specific needs of each company. Only then is optimal insurance coverage possible.
Even after the step into self-employment, some professional groups are obliged to pay contributions into the statutory pension insurance. This includes, for example, carers who themselves do not employ workers, and skilled craftsmen requiring a license. As a rule, however, self-employed persons do not pay into the statutory pension insurance unless they have voluntarily decided to do so. Without pension insurance contributions, no statutory pension will be paid later, unless a pension entitlement was acquired before the start of self-employment. But even then, the pension is so low that start-up entrepreneurs are dependent on private pensions in old age.
With the basic or Rürup pension, the self-employed have the opportunity to build a private pension, which is supported by the state. Because the contributions for the Rürup pension can be made in the tax return as special expenses for tax purposes. The limit is 20,000 euros for singles and 40,000 euros for married couples. However, in 2012, only 74 percent of them will be credited, and by 2025 the proportion will increase by two percent annually to 100 percent. In addition to tax savings, the Rürup pension has the advantage that entrepreneurs can vary the monthly payments and thus adjust their financial situation.