Tax and Accounting Aspects of Transforming a Sole Proprietorship into a Limited Liability Company and Differences in Types of Employment

In order to carry out the transformation from a sole proprietorship into a limited liability company as an accountant, we must first be well acquainted with the characteristics, advantages and disadvantages of both the sole proprietor and the limited liability company. These basic and important differences will guide us towards the right decision at key moments. Taking into account the overarching theme of the diploma thesis 'Equality and Diversity in the Workplace', she compared performing work as a sole proprietor and as an employee (member) in a limited liability company. She described the differences regarding employment relationship, contributions, taking leave and sick leave, working hours and equality and diversity in the workplace. The research itself was based on obtaining information from sole proprietors about their opinion on transforming from a sole proprietorship into a limited liability company.

Problem

In order to carry out the transformation from a sole proprietorship into a limited liability company as an accountant, we must first be well acquainted with the characteristics, advantages and disadvantages of both the sole proprietor and the limited liability company. These basic and important differences will guide us towards the right decision at key moments. Throughout the diploma thesis, the reader gains important information about how to start their business journey, what is needed, where to seek help and what to arrange for proper operation.

They learn about the important characteristics of sole proprietorships and limited liability companies, making it easier to decide which form of business to choose when opening a company. For an existing sole proprietor, this useful information helps with possible decision-making regarding transformation into a limited liability company. The greater part of the diploma thesis is dedicated to the tax and accounting aspects of transforming a sole proprietorship into a limited liability company, where we compare taxation and the use of reliefs between these two legal organisational forms.

All changes and innovations for 2020 are also covered. The following section also defines the status aspect of transformation, where we obtain important information about various provisions and proper and timely reporting.

Solution and Method

Taking into account the overarching theme of the diploma thesis 'Equality and Diversity in the Workplace', she compared performing work as a sole proprietor and as an employee (member) in a limited liability company.

Results

She described the differences regarding employment relationship, contributions, taking leave and sick leave, working hours and equality and diversity in the workplace. The research itself was based on obtaining information from sole proprietors about their opinion on transforming from a sole proprietorship into a limited liability company. That is, why they decided on this legal organisational form, whether they believe that operating as a sole proprietorship is simpler and less complex, and whether the transformation process is difficult, lengthy and expensive.

She also conducted several interviews with sole proprietors who had already transformed into a limited liability company. She asked them about the transformation process, whether it required a lot of their time and which form is better in their opinion.