Deciding your business structure
When getting started on a self-employed basis, it's important to determine which legal structure you will select for your business. The basic structures for a business are either a company (legal person) or a one-man business (natural person). The choice between the two requires serious consideration as they both come with their own benefits and drawbacks.
Differences between a one-man business and a company
The main difference between a company and a one-man business is the liability protection you receive.
If you organise your business as a company (legal person), company equity and personal equity are separate, which means that you are not putting your personal assets at risk. If your business ends up facing financial difficulties, the creditors will look to the company's assets to recover any debts the company may have incurred.
Incorporating as a business offers scope for working with other businesses and has some appealing tax benefits.
Having said that, as a company you will also need to reckon with your liability as an incorporator and your liability as a company director at all times.
If you set up as a one-man business (natural person), your private assets also constitute the equity of the business. If problems occur, this may have a direct impact on your family budget. Even though it is the simplest structure to set up, it does involve greater risks.
Which legal company structure should I go for?
So you have decided to set up as a company? Good! Now all that remains is for you to choose the right company structure.
Do you want to set up an (ev)bvba/sprl(u)? This is possible via CompanyMakers, an initiative of BNP Paribas Fortis. The services of Securex are also included in this service.
You can also switch from being a one-man business to a company or vice versa at any time. Should you decide to do so, bear in mind that you will need to pay the start-up expenses again to activate the new business. You can also choose to allow the one-man business structure to continue to exist alongside the company structure.
For further advice, please consult your notary or book an appointment with any of the Securex Business Desks to discuss the practical steps to be taken.