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Business registration: Network Marketing
The most important question that should be asked is what is the business registration process?
According to the trade regulations § 14 GewO, a trade must always be registered when starting work in network marketing. The Business registration should be carried out no later than 14 days after starting work. This also applies to a planned secondary trade that is started alongside a full-time job. We speak of one in network marketing part-time Business start.
Business registration always required
The amount of income and the amount of time usually do not matter when the activity permanent and up Making a profit is created. Making a profit in Network Marketing is always to be subordinated to the project. The activity is commercial and therefore requires registration. Every prospective self-employed entrepreneur bears responsibility and must comply with all legal obligations. The risk of not registering and the resulting consequences (fines and back payments) must be taken into account, although supposed ignorance cannot help.
The cost of a Business registration are regulated differently depending on the region, city, district. The trade office, public order office or town hall at your own place of residence can provide information on this.
The tax office reports by itself
After registering the business, you will receive a questionnaire from the tax office. Everyone should fill out this carefully and realistically state their future income from self-employment. The income in network marketing can be rather low in the first few financial years. After completing the questionnaire, you will automatically receive a tax number from the tax office.
The characteristics of a commercial activity result from Section 15 (2) of the Income Tax Act (EStG). We are not aware of any restrictions on admission in the area of network marketing. There could be exceptions if it is about financial consultancy, insurance or real estate.
From this point on, every entrepreneur and every company can claim input tax from the tax office for business purchases, unless one wants to opt for a so-called "small business" regulation.
Small business regulation
According to § 19 UStG, no value added tax is levied when taxing small businesses. A small business owner does not charge VAT on his bills with reference to § 19 UStG. However, this means that VAT cannot be offset or deducted for incoming invoices. This regulation applies exclusively to those whose sales in the previous calendar year did not exceed EUR 22,000 and sales of a maximum of EUR 50,000 are expected in the current calendar year.
Whether you want to make use of the small business regulation is indicated to the tax office in the questionnaire. We at the association recommend the small business regulation at the beginning of self-employment, because the investments are very manageable at the beginning and the tax burdens are therefore only low. This can change in the course of the activity and should then be reconsidered.
Anyone can find out more about the benefits of one Small business or also the Small business regulation want to know, can get very good information on this website. Other interesting and current topics for Business registration are provided there. It is particularly important to always recommend for part-time entry into network marketing. In the course of a business start-up consultation, we are also at your side for our members with a business plan, profitability calculation and expert opinion for the job center / employment agency.
Always act correctly
Those who have not registered a business, contrary to the obligation from § 14 GewO, and therefore have not received a relevant tax number regardless of this, have to state their income from network marketing in their confidential tax return, otherwise one can be liable to prosecution.
In another post we give everyone Start-ups and Female entrepreneurs the reference to a tax refund from the tax office, provided that wage tax has not yet been calculated. Click here to contribute. This process can be used to raise equity. Members benefit from our experience.
Now the question arises as to what effect a business registration has on the contributions of the GKV - Statutory Health Insurance. In the future, these will be calculated based on the expected earnings and that can be expensive. Read more about this.
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