Forming a company can take a few days, but the decisions made in those days follow you for years. Here are the seven mistakes we see most often among new founders, with simple fixes.
1. Choosing the entity type on set-up cost alone
A sole trader is quicker and cheaper to set up, but progressive income tax grows as profit grows. Do not decide without weighing expected profit, partnership plans and liability.
2. Picking an activity code at random
The NACE code affects tax rates, incentive eligibility and some permits. A code that does not reflect your real business brings corrections and explanations later.
3. Setting unrealistic capital
Very low capital can reduce trust with banks and large clients; very high capital increases commitments and fees. Strike a balance that matches your plan.
4. Choosing an address without thinking
Using your home address is possible, but it has consequences for the activity type, rent expenses and on-site inspections. If you use a virtual office, make sure the contract is acceptable to the tax office.
5. Postponing e-notification and e-document applications
Tax office correspondence now largely runs through e-Notification. Starting to sell without e-Invoice or e-Archive in place means being unable to invoice your first customer.
6. Mixing personal and company accounts
Paying company expenses with a personal card, or personal expenses from the company, muddies the records and causes trouble in audits. Open a separate bank account from day one.
7. Not knowing the first month’s calendar
A newly formed company may have filing obligations at the end of its very first month. Find out which return is due when on formation day.
Quick checklist
- Did you compare entity types with numbers?
- Does the activity code reflect your real business?
- Are your separate bank account and e-documents ready?
- Do you have your first month’s filing calendar?
