Disadvantages and obligations as a registered businessman
Of course, this legal form not only brings with it rights and advantages, but also certain disadvantages and their obligations.
By being entered in the commercial register, the merchants are also bound by the rules and regulations of the Commercial Code (HGB) . The legislature sporadically assumes that merchants have more knowledge in legal transactions than normal traders. In this way alone, a merchant is bound to an oral guarantee, to which a non-merchant would not be bound. But there are also obligations such as accounting, drawing up a balance sheet and an inventory. However, sole traders are exempt from this according to §242 HGB .
Disclosure Requirement – No Disclosure Requirement
Typically, certain companies have an obligation to publish and present their respective annual financial statements. Sole proprietorships or registered merchants do not have this obligation. It is therefore not subject to the disclosure requirement or the disclosure requirement . The only exception here are the sole proprietorships, which have a considerable volume of more than 130 million euros in annual sales.
Legal regulations for the registered merchant
As already mentioned above, the eK is subject to certain rights and obligations that result from the Commercial Code. However, he is only subject to these if he also carries out activities that are commercial according to the German Commercial Code (HGB).
What should you watch out for if you want to employ employees?
If you, as a registered businessman, want to employ people, then you have to fulfill almost exactly the same characteristics as is the case in other companies.
To register an employee, you first need the respective tax number , the company number of the responsible employment office and the employee (s) must be registered with the health insurance company.
So nothing is very different from other companies.
Do I have to register as a sole trader with a trade?
According to Section 1 of the German Commercial Code (HGB), a merchant is anyone who operates a trade. On the other hand, a trade is any business, unless the type and scope of the business does not require a commercially set up business. This determination usually requires an individual assessment and this is subject to a margin of discretion. Because of this leeway, the uncertainty is relatively high.
So it cannot be said clearly whether one is running a trade or a normal business. It has to be assessed individually.
What is the difference between an actual businessman and an optional businessman?
The so-called can-do merchant is a person who only becomes a merchant through entry in the commercial register. Small businesses, for example, belong to this group. A salesperson can therefore freely decide whether he would like to be registered or not.
An actual merchant is anyone who operates a trade that requires a commercially run business in terms of type and scope. The owner has to be registered in the commercial register, but does not lose his capacity if he is not registered.
What you need to know about a merchant’s liability
One of the most important issues when opening a company and choosing a legal form is liability. Among other things, the question arises of how one must be liable in the respective legal form. With a registered merchant it is not the same as with other legal forms . So you ask yourself what the merchant has to stick to.
Is the sole trader liable with his private assets?
This question is easy to answer. Because as a registered businessman you have unlimited liability. This unlimited liability means that you are liable with all of your private assets if something happens and does not go as planned.
Company name and taxes
Usually the company bears the first and last name of the company owner when it comes to the company name of a normal business enterprise. If you then register as a businessman, you have the option of giving your company a fantasy name. So you can then choose or think of your own name for your company.
As far as taxes are concerned, it can be said that the merchant is also subject to tax. The merchant must submit a monthly sales tax return. He also has to show the sales tax correctly on his invoices.
The advance VAT return can be quite annoying and time-consuming. Use an accounting software, with which you can easily do the advance VAT return.
What role does the company play in the registration?
The company of a registered merchant counts as a designation by which a merchant is represented in his business life. The name of this company is also recorded in the commercial register. However, regulations can also be found in the HGB for the company name. There it says that the name must have the addition of the legal form and that it must differ from other companies registered in the commercial register.
Registered merchant part-time
If you have a job as an employee, but would like to start your own business with your business idea and don’t know whether this is possible as a registered businessman, then we can certainly help you.
In principle, it is possible to start your own business alongside your main job without any problems. Most people choose what is known as a small business for this. There are some regulations for small businesses that you should then observe. It was already mentioned above that small businesses can freely choose whether they want to be entered in the commercial register. If you have decided to have yourself entered in the register, you will also receive the name of the registered businessman and that alongside your main occupation.
However, it is mandatory to inform your employer about this. If he gives his OK, then nothing stands in the way of the registered businessman in the secondary job.