S.R.O. vs. zivnost
Below are some basic differences between an S.R.O. and a Živnostenský List.
The list is not complete, and just gives a basic overview to the more commonly asked questions.
Note:
If you wish for more detailed information, you should seek professional advice from a lawyer and/or an accountant.
The main difference between a Živnostenský List and an s.r.o. is that as a self employed entrepreneur you are legally liable for all debts you incur. With an s.r.o. your personal legal liability is limited to any unpaid basic capital of the s.r.o.
To put that more simply.
If something were to go wrong with your business and you ended up bankrupt, if you use an S.R.O. you personal property cannot be touched, only the property of the company. Whereas with a Živnostenský List you are personally responsible for the comany's debts.
An S.R.O. is a legal entity in it's own right.
An S.R.O. can have several owners and does not necessarily have to have any employees.
Also an S.R.O. can generate revenues even if you are not in the country.
Minimum investment - You are required to pay in a minimum share capital of 200,000. Kc plus a reserve fund of 10% of the basic capital from the first profits.
The tax rates are different between S.R.O.s and Živnostenský List .
A Živnostenský List is a trade license and gives you the ability to work
for yourself in/from the Czech Republic.
It can be a lot cheaper opening a Živnostenský List than an S.R.O. as you
can open a Živnostenský List yourself, but an S.R,O. usually requires
the help of a lawyer.
There is no basic capital (200,000 KC) required for a Živnostenský
List.
There is a lower administrative burden using a Živnostenský List,
accounting and tax compliance costs are generally lower than for an
S.R.O.
On a Živnostenský List you are able to deduct more expenses for tax
purposes than you actually incur as the tax rules allow this.
With a Živnostenský List you are personally liable for the businesses
liabilities.
When you open a Živnostenský List, you automatically become liable for
monthly social payments, not so with an S.R.O.