Female entrepreneurship is surely one of the unused resources of the economic development, in the EU as well as in Serbia. The data show that, on average, only 30% of small and medium companies in the European Union are owned by women. This percentage is lower in Serbia. Namely, according to some research, this number is around 26%, that is, this percentage of companies meets criteria that are characteristic for female entrepreneurship. This data clearly shows that the state of Serbia still has not managed to sufficiently instigate women to be more active in starting and managing businesses.
Data that approximately 50 percent of women that are capable to work never enter the labor market and that they are economically inactive is alarming. But, at the same time, it shows that this part holds large potential that needs to be brought out. We feel that the development of female entrepreneurship is an opportunity for significant growth of the Serbian economy. Therefore, here are some basic advice for first steps in female entrepreneurship.
Decision to start your own business is a major step and surely one of the most important ones in life. This is why you need to inform yourself first and be prepared for all potential obstacles you may find on your path. Ladies, if you wish to sail into the business world - you need to know your options and choices. Why should you do this? Because decisions you make in your first steps as an entrepreneur may maximize your potential.
Your business idea does not have to be something innovative, special, original, but, for a good start and subsequent success, preparation is important. Preparation includes information. This is the information we are trying to share, to encourage the ladies to move forward, to provide support in initiating their own business and in that manner, to promote the female entrepreneurship. So, in this text we will mention the most frequent legal forms of companies that you ladies may establish to start your own businesses.
The most usual dilemma at the start of this journey is which form of company to establish? Among all the other forms that exist, here we will consider the two most frequent ones for the ladies, and most favorable forms for business - entrepreneur or LLC (Limited Liability Company). Below we will explain what should be the focus of this selection.
Entrepreneur is not obligated to produce acts upon registration, changes or termination. On the other hand, such obligation stands for the LLC, where the Act of Association and its amendments must be certified with competent authorities.
In case of an entrepreneur, it may be a foreigner, that is a person with no residence in Serbia, but the resident and working license is mandatory for further business operations. On the other hand, with LLC, the founder may be a foreign natural or legal person that is not obligated to hold a residential or working permit.
Entrepreneur is an individual that independently bears all benefit and consequences of its business, while LLC is a simpler manner of realizing partnership.
If you establish a LLC, then, as founders, you are liable to the amount of capital, that may be only RSD 100, and as entrepreneurs you are liable with your property and the property of the spouse (and other family members). In other words, should it come to the situation, God forbid, that Tax Administration cannot collect from you - off goes the car of your husband!
As an entrepreneur your obligation is to add your first and family name to your business name, and the PR abbreviation (Entrepreneur), with an optional business name.
Here are some examples of proper business names:
Business name of LLC does not contain the name of the founder, but the business name is mandatory. We recommend to reserve the name at the start of the process, since later on it is possible for BRA not to approve the name thus forcing the entire registration procedure to repeat within 30 days and payment of 50% of the tax paid for registration. This is why it is very important to contact your accountant or lawyer.
It is very important to know that if, as an entrepreneur, you wish to operate outside the place of registration, you need to register separate premises with BRA, while in case of LLC you do not have such an obligation.
For obligations from operations the entrepreneur is liable with its entire property, without limit, while for tax obligations it is liable with property of all adult household members. On the other hand, LLC is liable for the obligations of the company only with registered stakes, that is entered with BRA upon association and does not have to be over RSD 100. Naturally, there are exceptions. When the founder uses LLC property for personal needs, then the rule of property separation is not honored, thus, automatically, it is liable with its personal property. Here we will mention that with entrepreneurs there are no stakes to be registered with BRA.
Regarding fines for offenses, they are several times lower for entrepreneurs compared to LLC. In case a Limited Liability Company commits an offense, the fine is set for the LLC and the responsible person, while in case of entrepreneurs the fines is set for the entrepreneur or the manager.
This choice means that business books may be kept in accordance with simple or double-entry bookkeeping. What this actually means, is best that you ask your accountant. In short: in simple bookkeeping only certain changes are entered (simple, easy to prepare balance sheets, cheaper, as a rule) while with double entry bookkeeping all changes per accounting principles are entered. In case of LLC, double entry bookkeeping is mandatory, and it prescribes, valid for the entrepreneur keeping such books, submission and public presentation of financial statements with the BRA.
Since the family is naturally a very important factor for entrepreneurs that needs to be aligned with other obligations, it is good to know that without prior registration, family members may be employed (if old enough, of course). But beware: the law states this is possible only in case of replacement, when you are absent. In case of LLC, registration is mandatory for all performing work, family members too.
The possibility to temporarily register discontinuation of operations exists only if you are an entrepreneur, for a time limited period or an unlimited period. This is important if you have some private obligations and if you can do this regarding the employment of household members.
Erasing from the BRA registry is performed with the condition of settling all tax obligations, while the settlement of other obligations towards creditors is not mandatory since you are liable for such obligations with your property. In case of an entrepreneur there is no waiting involved, erasing is performed on the date of the application!
LLC is erased from the BRA registry through the liquidation or bankruptcy proceedings that last for a minimum of four months. All creditors must be settled in order to execute the liquidation proceedings, with certificate of settling all tax obligations.
In this article, we tried to show some of the important differences between the legal forms existing, and decisions you must face if you decide to join the female entrepreneurship. It is important to prepare yourselves on the path from the idea to execution, and information is very important for such preparation. If this information was useful for you, you may share them with your friends :)