Sole proprietorship is the most popular form of business in Poland. It is easy to set up, registration costs nothing, and there is usually no need for full bookkeeping. However, when a company expands, it sometimes needs an injection of capital. This is when it is worth considering setting up a company and knowing what pitfalls await entrepreneurs. What are they? We suggest.
According to data from the Tax Care "Entrepreneurship Index", as many as 3 million sole proprietorships were registered in Poland by the end of 2018. This trend continues, because from January to February this year On average, more than 900 such companies were added to Poland daily.
Although running a sole proprietorship has many advantages, it is also not without its disadvantages. The biggest of them is the liability with the entire property of the owner. for the company's obligations. This can be especially risky when the company has spread its wings. In the event of financial problems, it can end in bankruptcy of the owner. After the transformation of a company, the company is responsible for its obligations, not the entrepreneur with his assets.
Founding of the company also makes it possible to raise additional capital to run the businesswhich encourages the growth of the company. Most entrepreneurs know the advantages of converting a sole proprietorship into a company. However, few know that there are mines along the way that can be defused in advance.
If the transformation of a sole proprietorship into a company is aimed at escaping financial problems, it's worth knowingthat this is not a good solution.
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