Running a sole proprietorship
There are no laws which govern how you should organise and run a sole proprietorship. As the owner of a sole proprietorship, you represent the business externally, and no distinction is made between the sole proprietorship's finances and your own personal finances.
The successful, well-organised running of a sole proprietorship requires sound financial management, as well as the separation of the enterprise's finances from your personal finances.
In a sole proprietorship, you can have employees, but you cannot employ yourself. The owner is considered to be self-employed you will be personally liable for ensuring that tax is paid on the profits generated by the business.
In a sole proprietorship, as owner, you will always have signature right alone. A signature right is an authority to act on behalf of the enterprise in any situation. You cannot assign signature rights to others, but you can assign power of procuration.
Switching to a private limited company
You cannot change the organisational form of your business from a sole proprietorship to a private limited company. Subject to certain rules, you can establish and register a new private limited company and continue to run your sole proprietorship business through the new limited company. This means that the company will continue to operate under a new organisation number. If you meet certain conditions, you will be able to carry out a tax conversion.
Power of procuration
Power of procuration is a limited authority to act and sign on behalf of an enterprise in the day-to-day running of the business. A person who is assigned procuration cannot mortgage or sell the enterprise's real property. As the owner of a sole proprietorship, you can grant power of procuration to one or more people, either individually or jointly.
Notification of the registration or alteration of a power of procuration is given via the Coordinated register notification. To find out who has power of procuration within a company, you can search the key information in the Register of Legal Entities.