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Running your small small business without LLC

Possible? Legal?

Andrey Kiselev
post 22.Jan.2014, 10:55 PM
Post #1
Joined: 2.Jan.2012

Hi all,

Sorry if the question has been already asked. I want to run my very small business in web development and SEO consulting in addition to my main job. It's more like a hobby. "Really small" means something like 4-8 hours and 1-3 KSek a month. Surely, it does not worth registering a LLC. But how can I proceed with payments, accounting and taxes in this case? Is it actually legal to run this kind of business without registration?

Any advice is highly appreciated!

Thanks!
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LLHope
post 23.Jan.2014, 08:58 AM
Post #2
Location: Stockholm
Joined: 1.Jan.2014

What you describe as a kind-of-hobby will not be accepted by the tax office as a hobby. So you will need to follow the rules with regards registration and accounting for VAT (Moms), Employers Social Taxes, your personal tax and so forth. Doesn't have to be a LLC, there are a few types of business including self-employed. You should as yourself if a few thousand a month is worth the bother, since once employer-employee taxes are taken into account you will end up with less than 50% of what you make. If you do not register any company then your customer becomes liable to pay the various taxes as though they had employed you.

You should also check your current employment contract and company policy, there are many companies that have it in contracts that you must request permission to enagage in other economic activites.
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Andrey Kiselev
post 23.Jan.2014, 09:34 AM
Post #3
Joined: 2.Jan.2012

QUOTE (LLHope @ 23.Jan.2014, 08:58 AM) *
What you describe as a kind-of-hobby will not be accepted by the tax office as a hobby. So you will need to follow the rules with regards registration and accounting for VAT ( ... (show full quote)


Omg... Do you mean that if one sales his/her own paintings from time to time, this still has to be registered and accounted?!

Can anyone suggest a good source of information to read about this?
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Silberfüchschen
post 23.Jan.2014, 09:58 AM
Post #4
Location: Europe
Joined: 24.May.2012

You might find some useful information at verksamt.se.

From their FAQ list:
QUOTE
Is there a limit to how much I can earn from hobby activity?

There are no restrictions on how much you can earn from hobby activity. The difference between hobby activity and business activity is that hobby activity is not operating for gain. It is something you do in your leisure time and is not your main livelihood.

Hobby activity is normally taxed as earned income under the category employment income in the tax return. In principle, all income is taxable and all expenses are deductible. If your annual turnover exceeds SEK 30,000, you will be liable for VAT.

If you pursue business activity for gain, you must apply for F-tax and declare the profit under business income.
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skogsbo
post 23.Jan.2014, 11:48 AM
Post #5
Joined: 20.Sep.2011

QUOTE (Andrey Kiselev @ 23.Jan.2014, 09:34 AM) *
Can anyone suggest a good source of information to read about this?

there are booklets / pdfs in English on every avenue of tax on the SV website. It's only the actual tax declaration forms and applications which are only available in Swedish.

It is incredibly easy. Go to SV explain to them and in it's simplest form you can be registered for either F skatt or FA (if you already have a standard employer). The only question SV will ask is if all your 'new' work is the for same client, can't they just employ you directly, rather than you be self employed and invoice etc.

Tax declarations online for small simple business are very easy, especially if you are computer savvy. The bonus of all of this is that you will then be able to claim some costs of your internet connection, IT, even a table / chair, as tax deductible. So there are some bonuses in there for you.
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LLHope
post 23.Jan.2014, 12:30 PM
Post #6
Location: Stockholm
Joined: 1.Jan.2014

QUOTE (Andrey Kiselev @ 23.Jan.2014, 09:34 AM) *
Omg... Do you mean that if one sales his/her own paintings from time to time, this still has to be registered and accounted?!

Skatteverket define a hobby as:

• Hobby är något du själv utövar på din fritid.
• Hobbyn är inte din huvudsakliga försörjning.
• Du utför inte arbete på uppdrag av någon annan.

Which quickly translates to:
• Something you do yourself in your spare time
• it is not your main livelyhood
• You are not doing work on behalf of someone else

What you describe is selling a service (development and consulting) outside of your normal work = not a hobby.

QUOTE (Andrey Kiselev @ 23.Jan.2014, 09:34 AM) *
Can anyone suggest a good source of information to read about this?

Skatteverket, give them a call.
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badkarma
post 23.Jan.2014, 02:33 PM
Post #7
Joined: 19.Dec.2013

http://www.frilansfinans.se/
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