I’m refactoring my business to become the simplest thing that could possibly work for what I’ve been doing for the last couple of years. Developing valuable software and helping others do so.
I was at the chamber of commerce yesterday to change my Inc (Besloten.Vennootschap.) to a personal company (eenmanszaak). Writing down the details of the takeover my personal company does from the Inc, I noticed it was exactly ten years ago, on 27 December 2001 my business started.
Yves Hanoulle suggested I write a short post about it. So here it goes.
The reason I’m de-incorporating my company is that incorporation was doing more harm than good. I originally incorporated to participate in the founding of Seek You Too, since this year better known as Seecr. They are ten years today, because Eric (my then business partner) and I had to incorporate our personal holdings first. Why did we do this? Our then accountant advised us to do so. When we wound our collaboration down in 2004 it did provide somewhat useful as we at least got the basic rules of engagement down in a contract.
Before that we’d already changed accountant. Our new accountant frowned somewhat at the complexity and cost of three Inc’s for two people. But it’s a lot harder to get out of incorporation than it is to get into, probably because it is less common. Apparently when a business grows, it incorporates, and when it fails it is liquidated.
The state where a business is profitable, but the overhead of an Inc is too much is rarer, although the person who handled the registration of my new company at the chamber of commerce said he saw quite a lot of it lately. I scoured the internet for hints on how to unwind a BV, but nothing much turned up. If you’re interested I’ll do a dutch write-up after it’s completed.
If you’re making less than 150.000 Euros in profit after costs and your salary it’s not worth the trouble, unless you need it for other reasons. Paying yourself a minimum salary of about 34000 euros is obligatory here, because the tax man is afraid you’re not going to pay enough taxes otherwise. Pro tip: wind the incorporated company down when you’re still profitable, being incorporated while not making more than your salary + costs sucks. there were many months I had to figure out how to pay income tax while waiting for payments to come in. Luckily I had two very good years, so I could compensate for the losses I made the years before, and I’ll start the next year as simple as necessary. Same name – Living Software – new company.
As I wrote in about the name a couple of years ago, a company is still the best way for me to search for those moments and situations when I am most alive. I’m looking forward to the next ten years!