How to Start a Business

 

Have you decided to start a business?  You do not know where to start? Who to contact? In which authorities to open a case? How do you do that? What documents should be submitted and to whom ?! And many more questions that "flood you" ...   The truth is, opening the case to the authorities is quite a simple procedure - not really as complicated as you think. On the other hand, the most important thing is to understand in what framework you will want to incorporate for the purpose of your business activity when starting a business. There are several forms of incorporation from which you can choose the one that is right for you at the stage of starting a business, the most popular of which are: "exempt dealer", "authorized dealer", and a limited company (limited liability) or unlimited.   I will detail briefly about each of the above:   Exempt Dealer - As an exempt dealer, a person who wants to start an independent business, which is expected to have a small volume of activity, and who does not exceed the total income of NIS 77,993 per year (as of 2013, will start operating each year). The exemption is for VAT * (VAT). An exemption dealer will save many accounting costs compared to other forms of incorporation, and will have much less preoccupation with the accounting aspect - he will have a "quiet mind" until the annual income tax return is submitted. Many exempt dealers work as employees and as self-employed at the same time. There are a number of professions in which it is not possible to be incorporated as an "exempt dealer". If the expectation of earning a living is from the business only and you do not work as an employee at the same time, and / or working as an employee is not the main source of income, our recommendation is not to start a business as an exempt dealer.   Authorized dealer - As a licensed dealer, a person who is interested in starting an independent business, and who cannot operate as an exempt dealer and / or is expected to have a large scope of activity from the ceiling set for an exempt dealer, will start operating. An authorized dealer is required to report to the authorities (VAT, income tax and social security on a regular basis, once a month or every two months - depending on the level of turnover). And profit, and for additional considerations.   Company Ltd. (or unlimited) -  Here the way of thinking is different compared to those mentioned above. A company is a separate legal entity and the owner of the company is not the company itself. By and large, the very idea was born to encourage new investors to take the initiative, without fear of failing and getting entangled in debts to creditors - the company owner will not be indebted to the company’s obligations. There are professionals who can not operate within the framework of a limited company (for this purpose there is the concept of "unlimited company"). Operation within the framework of a company has advantages and disadvantages. Right at the tip of the fork - a business with significant profit, its owner To be expressed in thousands of NIS per year, when operating within the framework of a limited company (or unlimited) compared to an authorized dealer.   You can view more detailed information in "Where to start" and then essential information in "Voters to incorporate as an exempt dealer / authorized dealer / company Ltd." Anyway my recommendation is to consult with an experienced professional, who will help you choose the right framework for you. Once the form of incorporation is chosen before starting a business, the very process of starting a business is a fairly simple bureaucratic process, which we will talk about in the next article.   * VAT is a tax of 18% applicable to every transaction made by the business, and is paid on all transactions made in a particular month, in the following month.