Choosing your legal status is a fundamental decision. Here is a clear comparison to help you pick the form best suited to your project.
The Main Legal Forms
1. Sole Trader (Individual)
Best for: getting started quickly, low-risk activities
| Criterion | Detail |
|---|---|
| Capital | None |
| Liability | Unlimited (personal assets at risk) |
| Setup cost | ~EUR 160 |
| Bookkeeping | Simplified |
| Tax | Personal income tax (25 to 50%) |
| Number of founders | 1 |
2. SRL (Private Limited Company)
Best for: SMEs, freelancers with substantial income, projects with partners
| Criterion | Detail |
|---|---|
| Capital | No minimum, but must be adequately capitalised |
| Liability | Limited to contributions |
| Setup cost | EUR 1,500–3,000 |
| Bookkeeping | Full (an accountant is required in practice) |
| Tax | Corporate income tax, ISOC (20% for SMEs / 25% standard) |
| Number of founders | 1 or more |
3. SA (Public Limited Company)
Best for: large companies, listed companies, projects requiring significant investment
| Criterion | Detail |
|---|---|
| Capital | Minimum EUR 61,500 |
| Liability | Limited to contributions |
| Setup cost | EUR 3,000–5,000 |
| Bookkeeping | Full, with a statutory auditor (if thresholds are met) |
| Tax | Corporate income tax, ISOC (20% for SMEs / 25% standard) |
| Number of founders | 1 or more |
4. SC (Cooperative Company)
Best for: collaborative projects, the social economy, worker cooperatives
| Criterion | Detail |
|---|---|
| Capital | No legal minimum |
| Liability | Limited to contributions |
| Setup cost | EUR 1,500–3,000 |
| Particularity | Minimum 3 founders, cooperative principle |
| Tax | Corporate income tax, ISOC (possible benefits if approved) |
| Number of founders | Minimum 3 |
5. ASBL (Non-Profit Association)
Best for: social, cultural or sporting projects with no profit objective
| Criterion | Detail |
|---|---|
| Capital | None |
| Liability | Limited (has legal personality) |
| Setup cost | ~EUR 150 (publication in the Belgian Official Gazette) |
| Bookkeeping | Simplified or full, depending on size |
| Tax | Legal entities tax, IPM (more favourable) |
| Number of founders | Minimum 2 |
The Legal Status Decision Tree
Question 1: Alone or With Partners?
- Alone → Sole trader or a one-person SRL
- With 1 partner → SRL
- With 3+ partners → SRL or SC
Question 2: What Level of Risk?
- Low → Sole trader
- Medium to high → SRL (limited liability)
Question 3: What Projected Income?
- Below EUR 25,000 → Sole trader
- EUR 25,000 – 40,000 → A grey area (consult an accountant)
- Above EUR 40,000 → SRL (tax advantage)
Question 4: For-Profit or Not?
- For-profit → SRL, SA, SC
- Not-for-profit → ASBL
Moving From Sole Trader to a Company
The ideal time to incorporate a company is:
- When your net income exceeds EUR 40,000–50,000/year
- When you need to protect your personal assets
- When you want to bring in a partner
- When you need more credibility
The Procedure
- Consult your accountant to confirm the timing
- Have your business valued by a statutory auditor
- Incorporate the company before a notary
- Transfer your activity to the company
- Wind down your sole trader activity
Conclusion
The ideal legal status depends on your personal situation, your activity and your goals. Don't make this decision alone: consult an accountant and a notary for personalised advice.
