Online store - do you need to register your business and where to open it?

Setting up an online store is a great idea for your own business, but before you start selling, you need to decide what legal form you want to operate under—and where to register your business. You can opt for a simple sole proprietorship or set up a limited liability company, which limits your liability.

In this article, we show you step by step how to register an online store, what costs are involved, and what you need to know about social security, taxes, and business accounts. You will also learn when it makes sense to operate without registration and when it is better not to take the risk. You will find out why more and more e-stores are opting for virtual offices.

Registering an online store and choosing the right legal form

In the case of such people, but, of course, not only not a bad option seems to be running an online store. Akurat with such a form of business a general orientation, including in the way offices work can be useful. A separate issue, of course, is the choice of the field you need to know in order to successfully run a store. And key, as with any business of your own, is the best legal form for the planned activity.

How to open an online store as a business?

The simplest legal form of your own business is a sole proprietorship. its establishment is simple. Before proceeding with registration, you should prepare basic information, namely: PESEL, the address of registration of the company, its name, the expected date of commencement of activity, the determination of PKD best describing the type of planned activity, the form of taxation and contact information.

With the data set prepared, it is possible to register the business. You need to log in with a trusted profile or qualified signature on the CEIDG website, choosing the option "Submit CEIDG-1 application." The application should be filled out and approved.

Such formal registration results in the assignment of a Tax Identification Number and REGON number, and means reporting the company to the Social Security Administration. There is no need to take any additional action at the tax and Social Security offices for the time being. However, it will be necessary to visit the Social Security, and this will be done within seven days of formally starting a business. For the first two years, you can settle with the Social Security at preferential, much lower rates.

There are at least two legal consequences associated with running a sole proprietorship, which can be dangerous. These are: liability with all private property for possible liabilities and the need to pay Social Security, which can sometimes be a debilitating burden for young companies. Non-payment of Social Security is possible only if it is paid in the right amount by the company that employs the entrepreneur.

To conduct online sales of some things you usually need to buy them beforehand. It is not uncommon for misguided purchases to occur. This generates costs and can lead a young company to bankruptcy, which in this form of business can have lamentable consequences.

How to open an online store as a company?

Setting up a limited liability company is more complicated. It may not be possible to do it online.

A limited liability company can be established either online, specifically on the Ministry of Justice's S-24 service, or the traditional way at a notary public. It's worth setting up a company online, as it doesn't require much knowledge and is quick. However, only a simple company can be established in this form. With a more complicated form, it must be done in the traditional way.

Company registration over the Internet can be done at https://ems.ms.gov.pl. The beginning is the registration of a user account, then you need to log on to it, select the option of registering a new company. Further by the hand leads the form, which must be completed. To register a business in the form of a company, shareholders must sign documents using an ePUAP trusted profile or a qualified signature.

The completed application is sent through the system. The registration court will register it with the National Court Register. KRS, REGON and NIP numbers are automatically assigned.

The second method of incorporation is the traditional one. With this form, you can adopt any content of the articles of association, if, of course, it is legal. In this case, it is not necessary to have a cash contribution to the company. A partner can make a contribution in kind, for example.

The company's contract is concluded in such a case at a notary. Then you need to apply for registration with the National Court Register. Assignment of NIP and REGON is done automatically.

Regardless of how the company is established, one must decide whether the company is to be a VAT payer or not. If so, you need to apply for it to the tax office. The company must have a company account, also this is another thing that needs to be arranged.

That still leaves Social Security. And here is the good news, because the owner does not have to pay Social Security by virtue of the mere fact that he has established a company. You do have to register employees with Social Security who are not employed elsewhere on a full-time basis.

Choosing a legal form of business such as a limited liability company has another advantage. The partners are liable for the company's obligations only up to the amount of share capital. The minimum share capital, is only five thousand zlotys. So there is no such danger of losing your life's work as with a sole proprietorship.

How to set up an online store without a business?

Polish legislation has for several years provided for the right of entrepreneurs to operate without registration. However, a store without a business will be a flawed creation. Running an online store requires at least setting up a website. And this is already a serious investment. Selling without a website is basically only possible on a platform such as Allegro, Amazon, OLX or Vinted.

For many years it was possible to conduct business on such platforms de facto illegally, but without much risk of being spotted by the tax office and thus suffering painful consequences. Today, conducting regular sales without registration is fraught with very high risks. This is because sales platforms will be required to provide the tax office with data on sellers and the value of their business. This is the result of a heavily delayed law implementing an EU directive aimed at curbing fraud. Significantly, platforms will report backwards for 2023, as the previous government did not implement the current EU law. What is legal is occasional sales, which according to the directive cannot exceed a value of €2,000 per year.

There are still Polish regulations. They state that, among other things, occasional sales are legal without registration. However, selling without registration can only be done on a small scale. Thus, such sales without activity may make economic sense if they are conducted without investment, which is made possible by sales platforms.

The business law states that you can run an online store without a business or any other type of business up to a monthly income of 75 percent of the minimum wage. The term revenue, is often confused with income and it is quite different. Income means all the money you get from your business. At the same time, the tax office is not interested in your business expenses. You cannot deduct them. The second condition - only people who have not run a business in the past 60 months can run an unregistered business. The moment you exceed the set income limit you must register your business.

Does an online store need to be registered?

There are no separate regulations mandating that the operation of a store be reported somewhere. The requirements for operating a store are the same as for any other business, unless the sale is to include goods covered by other regulations such as alcohol.

How to set up an online store? Business registration costs

Setting up a sole proprietorship is generally free. But in order to run a business, however, you need to incur some small costs like ordering a stamp, which is essential for dealing with the authorities.

The fee for registering a company in S24 is about 350 zlotys, of which 100 zlotys is the cost of an advertisement in the Court and Economic Monitor.

Setting up a limited liability company in the traditional way is much more expensive. Court fees alone in this case amount to about PLN 600.As in the case of establishing a company online, 100 zlotys of this amount is the cost of announcing the establishment of the company in the Monitor Sądowy i Gospodarczy. The main cost in this case will be the service of a notary. His fee will depend, among other things, on the complexity of the partnership agreement.

Where can you set up your own online store?

You can run an online store from your own home, garage, rented warehouse, or any other convenient location. But there is a difference between physically running a store and its formal registration location, i.e., the specific address that customers will see on the website and, for the more discerning, in the National Court Register (KRS) or the Central Registration and Information on Business (CEIDG). It is worth considering setting up a store in a virtual office.

Registered e-commerce business vs. virtual office - why is it worth it?

So why should you conduct online sales using a virtual office address? There are at least a few benefits of such a solution, which we will outline below.

Professional image

When registering an online store in a virtual office, you can choose a suitable and prestigious address in the city center. There is a wide range of options to choose from.

Flexible solution for online sales development

One of the main issues that spend sleepless nights for those planning to start their first business is the cost of doing business. Usually at the start it is small scale and all the goods can fit in a corner of the room, and if the business works out larger and larger warehouses are rented. Such moves are a natural thing in a growing business. There is also such a model of online sales on the market, in which the shopkeeper does not come into contact with the goods. Deliveries come to a logistics center, and from there things are distributed to the recipients.

If you register a company in some small room, which was good in the beginning of the business, then when you move you will have to re-register it to a new address. This means a waste of time and money. To avoid this it is worth registering your business in a virtual office. In this case you haveone unchanging address which is also important image-wise. A company changing addresses all the time can give rise to suspicion that it is running away from something.

Protection of private data

Many people starting out in business register a company in their own home. This solution means making private data public, which had better be protected. One can imagine many situations in which it can be downright dangerous to give your place of residence to everyone.

Registering a company with a virtual office takes care of this matter. By the way, if we outsource accounting and HR matters to a virtual office, our employees' data and financial issues will also be protected professionally.

It's worth bearing in mind that inadequate protection of personal data can cost heavily. Recently, the UODO imposed a 240,000 zloty fine on a company for its employee losing a flash drive containing one person's personal data.

Save time and costs of running an online store

When running an online store registered in a virtual office, it is not bad as it seems to work from home. If the goods are physically stored and packed in a logistics center, there is no need to waste time and money on commuting. There is also no need to rent an office space to manage the store.

Access to additional services

Virtual offices often have additional services on offer for companies. They are often cheaper for entities registered with them. You can count on accounting services, HR, sometimes help with PR activities. Some offices also offer conference room rental and registered companies have a room for a few hours a month for free with some packages. And, of course, the matter of answering correspondence is taken care of, phone answering and other office services can be outsourced.