When you start doing business, you have to choose which legal form you want. So what type of company you set up. For many self-employed people, the 'sole proprietorship' is then the best choice. This type of business means that you, the entrepreneur, are solely responsible for your business. We are happy to explain the advantages, obligations and risks of a sole proprietorship.
What is a sole proprietorship?
A sole proprietorship is a legal form where you are fully responsible for your business. You are therefore the owner, make the decisions and are privately liable for everything that happens in your business.
You are not a separate legal entity as in a private limited company. 'Sole proprietorship' does not mean you have to work on your own. In fact, you can also hire staff in this form of business. It is only about the legal and tax structure.
What are the advantages of a sole proprietorship?
Setting up a sole proprietorship is quick. You register at the Chamber of Commerce and can get started right away. No notary is needed. You can also benefit from tax advantages, such as the self-employed deduction and start-up deduction (if you meet the hours criterion). Administration is simple and you keep full control over your business. For budding entrepreneurs, this is often the easiest way to get started.
Are there any drawbacks?
Yes, there are definitely risks involved. The main 'downside' is that you are personally liable. If your company gets into debt, creditors can access your private assets. Also, a sole proprietorship is less attractive to investors and a limited company can become more tax advantageous if your business grows significantly.
Starting your sole proprietorship in 3 steps
| Step | Action | Explanation |
| 1 | Registration at the Chamber of Commerce | You will receive a one-off fee of €75 (2025) for this. You will receive your VAT ID immediately. |
| 2 | Open a business account | This is not mandatory, but sensible for overview and accounting purposes. |
| 3 | Arrange your bookkeeping | Choose an accounting package such as MoneyMonk or work with an accountant. |
Tax advantages with a sole proprietorship
As an entrepreneur, do you meet the hours criterion (1,225 hours per year), then you can use:
| Scheme | Amount (2025) | Terms |
| Self-employment deduction | €2.470 | Meeting hours criterion |
| Start-up deduction | €2,123 (extra) | First three years of your business |
| SME profit exemption | 14% of profit | Always applicable, but extra advantageous with deductions |
All these schemes make you pay less income tax on your profits. Especially in the early years of your business, these schemes can save you thousands of euros.
Is a sole proprietorship for you?
If you want to be self-employed without a lot of paperwork and start-up costs, a sole proprietorship is a smart choice. Especially in the beginning, it is fiscally advantageous, convenient and flexible. Are you unsure whether it would be better to start with a sole proprietorship or immediately switch to a BV? If so, we would be happy to think along with you.
Schedule a free consultation with us and together we will see which legal form best suits your plans.
