Once you have decided to set up your own business, the next most important thing you need to do is to choose the most appropriate legal structure for your company. Each legal structure available in Belgium has different cost and liability implications, among other specificities.
You have 3 options for exercising your self-employed activity:
- Sole proprietorship (self-employed individual)
- Company (with or without legal personality)
- Non-profit organization
Sole proprietorship or company? Each formula has its advantages and disadvantages, and your choice will have a significant impact on the life of your enterprise. Among the criteria at stake are the following:
- The intended type of activity
- The number of people who will participate
- The available capital
- The financial contribution of the partners
- The most appropriate tax regime
- The foreseeable development of the activity, etc
Choosing either of these two options requires in-depth reflection, and it must be adapted to your business project. Don't hesitate to ask for advice from a notary, lawyer, business consultant, accountant, or tax expert.
More information about legal structures can be found on FOD Justice (FR).
Sole proprietorship
A sole proprietorship is the simplest way to perform a self-employed activity:
- It does not require the drafting of articles of association, nor a minimum starting capital.
- The costs of incorporation and operation are low.
- You can start your business quickly.
- You are the only one in charge and you can make the decisions necessary for the exercise of your activity without having to consult other partners.
- The accounting to be kept is, as a general rule, simplified.
Company
The incorporation of a company requires the following, depending on the case:
- The intervention of a notary
- Minimum capital
- A financial plan
- The drafting of articles of association
- An auditor's report (e.g. in the case of a contribution in kind)
- In addition, there are also costs associated with the termination and liquidation of a company
- A company may have a separate legal personality that confers on it its own rights as well as obligations
Most common company forms:
- Public Limited Company (PLC): this is the form for companies of a certain size, where raising capital is the main focus. Only one founder is needed to set up an NV.
- Private Limited Liability Company (LTD): a limited company is the 'basic company form' par excellence. Because there are very few mandatory regulations, a BV gives economic operators a lot of room to maneuver in forming a company that is 'made to measure'. For example, there is freedom in the articles of association to determine how limited the BV actually is. Only one founder is needed to set up a BV.
- Cooperative Society (SCOP): a cooperative society is a company whose shareholders pursue a cooperative ideal, which explains why it always requires three founders. The main purpose of the cooperative society is to meet the needs of its shareholders and it may also serve as a tool to meet the economic or social needs of those shareholders.
- General partnership: a general partnership is a partnership entered into between jointly and severally liable partners who have unlimited liability. All decisions must be taken unanimously, unless the partnership agreement provides for decisions to be taken by a majority.
- Limited Partnership (LP): a limited partnership is a partnership entered into between one or more jointly and severally liable partners who have unlimited liability, referred to as managing or limited partners, and one or more partners limited to contributions in cash or in kind, referred to as silent or limited partners. The managing partners are involved in the management. The silent partners are not involved in the management. All decisions must be taken unanimously, unless the partnership agreement provides for decisions to be taken by a majority.
Non-profit organization
- Association sans but lucratif (ASBL): a non-profit association is a group of natural persons or legal entities pursuing a charitable goal. The non-profit association consists of at least two persons.
- Association internationale sans but lucratif (AISBL): an international non-profit association is a group of natural persons or legal persons that pursues a charitable goal of international benefit.