Sole Trader in General

Business activities can also be carried out without a company. This business form is referred to as sole trading, i.e. a sole trader is an entrepreneur, but not a company. In common parlance, a sole trader is often referred to in the form “trade name”. A sole trader carries on business activities through his/her own work input, in his/her own name and is financially responsible for commitments as they would be his/her own. If there is more than one business partner, the form of business is then called a general partnership [General Partnership and Limited Partnership]⁠.

A sole trader must make a notification before starting the business. The notification is made using the joint notification procedure of the Trade Register and the Tax Administration (Business and Corporate Information System, BCS). The start of a business activity must always be notified to the Tax Administration. A sole trader must register with the Trade Register if

• a trade name (enterprise name) is used for business activities;

• under the Accounting Act, the sole trader is required to submit the annual accounts for registration or

• the sole trader is resident outside the European Economic Area

  However, a sole trader can also register with the Trade Register if he or she wishes, even if he or she is not legally obliged to do so. It might be beneficial to register, i.e. a registered trade name is protected. It also becomes possible to use one’s trade name as a security of a loan (so called business mortgage, [Debt Financing in General]).