51. Q: Should I have two company bank accounts – one for the payroll payments and one for any other transactions?
A: That is a personal option as to whether you want payroll to be a separate bank account. We have clients who do both. We would recommend to keep it simple and just have one bank account because it will be one less bank account to reconcile each month and one less bank charge.
52. Q: My partner and I are planning to open a business which will have two parts – online store and physical retail space. My partner will be responsible for the online part and I will be in charge for the physical store. How will we divide the profits when we are not sure which side of the business will be more profitable?
A: Normally in your partnership agreement you will outline what each individual is contributing to the business and how profits will be divided. I strongly encourage you to seek for a professional help for preparing the formal partnership agreement so that you clearly outline what is expected and given to each partner. The way you divide profits is defined by the way you two deem you want them divided. Normally it would be based on the percentage of ownership each has in the business.
53. Q: Is it better for me to be a sole proprietor or to incorporate a limited liability company?
A: The answer to this question depends on the individual taxpayer. In some cases, it may be better to be a sole proprietor, and in other cases it may make more sense to incorporate. One main difference between the two types of entities is liability exposure. It is usually advisable to seek the advice of a qualified professional during this initial setup phase of your organization.
54. Q: How do commissions work in terms of taxes? For example, if I sell my work in a gallery and the gallery takes a commission, do I claim taxes on the whole price or just my cut?
A: The whole amount would be reported as income and the commission amount would be deducted as an expense on your tax return.
55. Q: I am considering to do business in Bulgaria and I was wondering which legal form to choose. Could you please tell me which are the most popular legal forms of the Bulgarian companies
A: The most frequently used legal forms in Bulgaria are Limited Liability companies (LLC), Joint-stock companies and local branches of foreign companies. We always advise our clients before registering a company in Bulgaria to contact us so that we can recommend the legal form which will best suits their business interests and objectives. There are particular business activities which match only certain legal forms and if this is not considered prior to the company registration, you can end up losing precious time and money in the wrong direction.