What must be taken into account when creating a business ID?

When setting up a business name, it's good to take a few things into account so that the start of operations is as smooth as possible. We have listed below the most essential things that should be taken into account!

Accounting

Every trade name entrepreneur, i.e. private trader, must keep records of their activities. Small companies have a lot of facilities for preparing their accounting and the majority of business owners can do their accounting as a one-time payment-based accounting. A private trader also usually does not need to prepare financial statements.

UKKO light entrepreneur with a business ID does bookkeeping by single entry for you and applies for VAT and tax declarations and VAT lower limit relief for all our customers who are entitled to it.

Taxation

Private traders usually have to pay two taxes, value added tax and advance tax. You can read more about these taxes and how they are determined on our page on taxation.

Insurances

Often, the only mandatory insurance for entrepreneurs is the entrepreneur's pension insurance, or YEL. However, many industries require other insurances, for example, trained massage therapists must have patient insurance, construction companies must have liability insurance. You can fill out an application for YEL insurance in the UKKO light entrepreneur service. Please note that in the business ID service, we do not withhold YEL payments automatically, but you will receive an online invoice for the service.

UKKO Assurance

As a light entrepreneur with a business ID, you are protected by accident and liability insurance. Accident insurance covers accidents at work, and liability insurance covers up to 2 million euros of damage caused at work.

Tax deductions

Being a private trader pays off from a tax point of view, namely the business tax law's right to deduct expenses related to business income is wider than the income tax law, which covers you for example if you work as a wage earner or as a private trader.

As a user of the service, you don't need to worry about which expenses are usable, because all expenses you add to the service are checked. The team's experts make sure that the expenses you add are approved and meet other requirements of the law.

Effects on unemployment insurance

The unemployment insurance of an entrepreneur is slightly different from the insurance of a wage earner, but by ensuring that your membership of the unemployment fund is up to date and that your YEL income corresponds to your actual income, you, as an entrepreneur, also ensure a livelihood for yourself when you stop working or fall ill.

If you run out of jobs as an entrepreneur, register as a job seeker at the TE office. When you start your job search, TE services will first find out your entrepreneurial status, i.e. whether you are an entrepreneur according to the Unemployment Security Act. If you are an entrepreneur, we will then clarify the main or secondary activity of the business. If your business activity continues as a sideline in addition to unemployment, you are often entitled to an adjusted unemployment benefit.

If you start entrepreneurship while unemployed, the main or secondary activity of entrepreneurship is not clarified during the first four months. The main or part-time activity is only assessed after four months from the start of entrepreneurship, which means that you will still receive an adjusted unemployment benefit for the first four months regardless of the establishment of the company.