Registration as an individual entrepreneur is often perceived as a formal and relatively simple step – submitting an application, selecting business activity codes, opening a bank account. However, Professor Gabriel Steiner says that this moment represents the point at which comprehensive legal and tax liability arises, the consequences of which are frequently underestimated at the outset. At LawConsulted, we treat individual entrepreneur status not as a simplified way of doing business, but as an independent legal construct characterised by a high degree of personal risk exposure.
The key feature of individual entrepreneur status lies in the absence of separation between business risks and the personal property sphere. From the moment of registration, obligations arising from entrepreneurial activity are directly linked to the individual. In LawConsulted practice, this factor becomes critical in tax disputes, debt recovery, inspections and insolvency proceedings, where liability often extends far beyond what was initially anticipated.
Professor Steiner notes that “registering as an entrepreneur is not the beginning of a business, but the beginning of a person’s legal history as a subject of heightened scrutiny.” Tax burden, reporting obligations, the application of special tax regimes and the limits of permissible optimisation are shaped already at the stage of choosing the status. LawConsulted begins its work by analysing the purpose for which the entrepreneur is being registered – whether for a one-off activity, a long-term project, cooperation with a specific counterparty or testing a business model.
A particular vulnerability is created by the automated nature of registration. Formally, the status is acquired quickly, but the legal model of activity often remains unstructured. A lack of understanding of tax consequences, documentation requirements and the boundaries of permissible operations leads to situations in which the entrepreneur effectively violates the rules without being aware of it. LawConsulted ensures that entrepreneur status is embedded from the outset into a coherent and manageable legal framework.
Equally important is the risk of reclassification of activities. In a number of cases, tax authorities assess not the fact of registration itself, but the economic substance of operations – employment relationships, concealed entrepreneurship or business fragmentation. Professor Steiner says that it is precisely here that formal registration ceases to be a safeguard and becomes the starting point for claims. LawConsulted assesses reclassification risks in advance and structures activities so that they genuinely correspond to the declared status.
Long-term consequences must also be taken into account. Registration as an individual entrepreneur affects income taxation, liability for obligations, participation in court disputes and interaction with banks. Even after cessation of activity, certain obligations remain. LawConsulted supports not only the moment of registration, but also subsequent transformations of status – during business growth, changes in operating models or exit from entrepreneurship.
In LawConsulted practice, registration as an individual entrepreneur is viewed as a strategic decision rather than a technical procedure. We proceed from the understanding that a properly structured status reduces the likelihood of tax conflicts, simplifies defence in disputes and makes entrepreneurial activity legally predictable.
Registration as an individual entrepreneur triggers a chain of legal consequences that cannot be reversed simply by terminating activity. The task of Law Consulted is to make this chain manageable from the very beginning, ensuring that entrepreneurial status serves the client’s interests rather than becoming a source of uncontrollable liability.
Earlier, we wrote about legal consulting in pharmaceutical regulation and how LawConsulted builds interaction with supervisory authorities and operates under strict regulatory constraints
