Place of business of self-employed persons

If you do not want to start a company and you have decided to do business under a trade licence instead, you will certainly come across the concept of place of business of self-employed person. This is basically the "seat of a self-employed person" and has a lot in common with a company seat.

PLACE OF BUSINESS VS. COMPANY SEAT

The term place of business usually means the registered office of a natural person (i.e. a self-employed person), while the seat of a company refers to the registered office of a legal person (e.g. a joint-stock company, a limited liability company, etc.). In both cases, the registered office means the place from which the business manages its business or trade and where fundamental decisions are made about the future of the company.

The place of business of a self-employed person is usually the same as his or her address of permanent residence, but this may not always be the case. As with company seats, it is possible to set up a virtual address when arranging the trade licence. The main requirement for the place of business is that the holder of the trade licence must be able to communicate with the outside world at this address (e.g. collect correspondence, process invoices, etc.).

Unlike in the case of company seat, the Trade Licence Register does not contain specifically defined requirements regarding the type of place of business. Only if the place of business and permanent residence of the self-employed person are different, the self-employed person is forced to provide the Trade Licensing Office with a document proving the legal right to use the premises, i.e. consent to use as place of business. The self-employed person is then obliged to visibly mark the building that is designated as the place of his or her business with his first name, surname and identification number.

PLACE OF BUSINESS OF SELF-EMPLOYED PERSON

The place of business must be stated in the trade licence and is a requisite for establishing a trade. This address is later entered in the Trade Licence Register and is used mainly for communication purposes. Without a place of business, the self-employed person cannot operate their business.

Like a company seat, the place of business is the address that the self-employed person should use for communication with the authorities and from which the business should be run (however, in the case of a virtual office, the company may be managed from elsewhere). However, the self-employed person does not have to do business directly at this address; the place of performance of business activities may differ from the place of business. The place where the work is performed is then called the establishment.

WHAT TO PROVIDE WHEN REPORTING THE PLACE OF BUSINESS?

If you decide to report your place of business to the authorities, you should definitely not forget to provide the following information:

  • name of the municipality in which you will be based
  • the part of this municipality
  • the street in which your company is located
  • indication number of the building
  • street number of the building
  • the postal code of the municipality

After creating a place of business for a self-employed person, do not forget to mark the place of business with your first name, surname and identification number (see above)!

VIRTUAL OFFICE

As with a company's seat, the place of business of a self-employed person can be set up as a virtual office. A virtual office for a self-employed person offers the same advantages as a virtual office of a company. Virtual offices are usually located at highly recognized addresses in large cities such as Prague or Brno, so they can add prestige and recognition to your company. Many companies that provide virtual offices for self-employed persons also provide free use of a room for communication with the authorities, the identification of the self-employed person in the building, or an assistant who will take care of correspondence. Our company provides virtual offices in Brno or various parts of Prague – it is possible to set up a virtual office for a self-employed person in Prague 1, Prague 2, Prague 3 and many other parts of Prague.

ESTABLISHMENT OR PLACE OF BUSINESS?

Establishment and place of business are two different concepts, but many people confuse them. So what's the difference?

PLACE OF BUSINESS

A self-employed person can have only one place of business and must always have one. Without a place of business, it would not be possible to run and manage a trade. However, this place is not specified by law in any more precise way and can therefore be any address that the self-employed person chooses.

ESTABLISHMENT

An establishment is a place where a self-employed person's activity takes place. For example, contact with customers, in the case of a workshop to create items, etc. The operator may have several establishments or may not have any at all. There are also cases where the self-employed person has their place of business and establishment in one place (for example, at home).

Compared to the place of business, the establishment is much more precisely defined in the Trade Licensing Act and has many more requirements than the place of business of the self-employed person (for example, it must be precisely marked and there are precise procedures for its formation and termination).

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