Last updated: Apr 22, 2020
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what is Sole proprietorship?
- aka sole trader, individual entrepreneurship or proprietorship
- owned and run by one person1
- there is no legal distinction between the owner and the business entity
- The sole trader receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts.
- may use a trade name or business name other than their or its legal name. They may have to legally trademark their business name if it differs from their own legal name, the process varying depending upon country of residence.2
- complete a form submitted to the governing authority to acquire title as a DBA or “doing business as”
- The license for a sole proprietary business entitles the owner to hire employees and enlist the services of independent consultants.
- their contribution to the project or decision is considered a recommendation under the law.
How to register a company in India?2
- Easy to setup
- TAX 18% on GST
- Limited Liability Protection
- D0esnt scale
Types of companies
- Public Company (or Public Limited Company)
- Private Company (or Private Limited Company)
- One Person Company
- Sole proprietorship Firm
- Royal Chartered Companies
- Statutory Companies
- Registered or Incorporated Companies
- Companies Limited By Shares
- Companies Limited By Guarantee
- Unlimited Companies
- Using a SHeet Template, record transactions as they happen
- Keep reciepts digitally
- Great for Tax Filings
A student buys a computer for $900. To pay for the computer, the student uses $400 in cash and borrows $500 for the remainder. Now his assets are worth $900, liabilities are $500, and equity $400.
- In economics, capital consists of assets that can enhance one’s power to perform economically useful work
- future sacrifices of economic benefits that the entity is obliged to make to other entities as a result of past transactions or other past events
- is any resource owned by the business.
- Anything tangible or intangible that can be owned or controlled.
- assets are recorded on the left-hand side (debit) of asset accounts,
- For example, if someone owns a car worth $15,000 (an asset), but owes $5,000 on a loan against that car (a liability), the car represents $10,000 of equity.
- Equity can be negative if liabilities exceed assets.
- legally owns one or more shares of stock in a public or private corporation.
- Legally, a person is not a shareholder in a corporation until their name and other details are entered in the corporation’s register of shareholders or members.[
- Debits and Credits
- In double entry bookkeeping, debits and credits (abbreviated Dr and Cr, respectively) are entries made in account ledgers to record changes in value resulting from business transactions
- The words debit and credit can sometimes be confusing because they depend on the point of view from which a transaction is observed.
- A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits.
$$ Net Income = Income − Expenses $$
- Accounting Basics - Debit and Credit
DC ADE LER
- Debit / Credit
- Neither good or bad
- Account recievable
- Liability - payable
- Equity - owners *
- Every journal entry will have at leat 1 debit or 1 credit
- Journal entry - 1000 loan from bank
- Debit and credit side must be equal
- Load is asset 1000 (debit) = Liability 1000 (credit)
fundamental accounting equation
$$ Asset = Liability + Equity $$
Where to register business?
you cannot avoid paying taxes in yoru country of residence
- Launched in 2014
- 20% Income Tax
- Lets you operate in EU from anywhere in the world
- Prime users
- Guy Kawasaki
- Japanese prime minister
- Bam Margera - 3D printing
- Former US President Barack Obama has an Estonian ID card
- Fee = 100 euros + 30 euros card shipping to embassy
- Might take a month
- Access to european banking
- ~200 euros per month maintaining the account, filing reports
- European trading
Trade and freelancers
- People who rely on the transfer of knowledge like humanities, doctor, lawyer
- You can work as both, then you will need 2 TAX numbers
- you would need atleast 3 contracts in german - german clients
- Letter of recommendations and Portfolios
- Financial plan - how much you have and how much will you spend