The dilemma "Sole Proprietorship or P.C. (Private Company)" strongly concerns new entrepreneurs; however, the final choice becomes easy when you have all the necessary data before you. Below, we analyze the key criteria that every professional must weigh for or against operating through a sole proprietorship or through a P.C.
The first and foremost measure of comparison is the method of taxation:
Therefore, whether it is financially beneficial to start a sole proprietorship or incorporate a P.C. is a simple, mathematical calculation that depends on the profits you expect from your business activity.
Every legal form carries different obligations:
Consequently, the entrepreneur will find that the accountant's monthly fee for monitoring a P.C. is generally slightly more expensive compared to that of a sole proprietorship.
The third criterion concerns the immense legal and financial benefits of the P.C., which are completely absent from a sole proprietorship.
The P.C. possesses absolute financial and legal autonomy against any other action of the entrepreneur. Unlike a sole proprietorship (where the Tax Registration Number (AFM) is one and the same and the entrepreneur is identical to it), the P.C. isolates its "good performance" from the other activities of its founder. The company operates as a distinct legal entity, an element that offers the absolute separation of business activity from the natural person. This autonomy creates a strong "wall" of protection against risks and unlocks vast opportunities for synergies with other professionals (contribution of money, real estate, know-how, and clientele).
Weighing the above, incorporating a P.C. emerges as probably the most beneficial choice. Of course, comparing the P.C. with other corporate types (General Partnership, Limited Partnership, LLC, or S.A.) remains an interesting question, which a lawyer from our law firm can explain to you in detail.
If the P.C. does not perform well financially, the loss is isolated within the company and does not extend to your personal or family assets. Suppliers, employees, and banks can claim money exclusively from the assets and accounts of the P.C. The sole exception is the State and Social Security Funds, which can take action against the administrator (but not the simple partners) for unpaid taxes and contributions. For the necessary legal clarifications, contacting your lawyer is always recommended.
Yes, you can safely incorporate a P.C. Because the P.C. has a separate Tax Registration Number (AFM) and a distinct legal personality, your third-party creditors cannot turn against the company for your own personal debts. (Special cases of third-party attachments are excluded, where legal guidance is required).
In businesses, it is always the profit that is taxed. Therefore, the 22% is strictly calculated on the net profits of the business and not on the turnover—meaning, what the company collects in total.
No. The structure of the P.C. combines flexibility, allowing it to be incorporated either exclusively by one person (single-member P.C.) or with the participation of multiple persons, applying the rule "strength in unity".
Choosing a legal form is the foundation of your success. Protect your property and optimize your taxation from day one. Contact our specialized team today to plan your next business move together. Επικοινωνήστε σήμερα με την εξειδικευμένη μας ομάδα, για να σχεδιάσουμε μαζί την επόμενη επιχειρηματική σας κίνηση.
