Registered business activity
Thread poster: Alyona Douglas

Alyona Douglas  Identity Verified
United States
Local time: 09:21
Member (2007)
English to Russian
Oct 15, 2007

Hi guys!

I've been contacted by a translation agency in the Eastern Europe - we're in the process of signing a contract now.

They ask me to choose a type of settlement with them - either a contract for each job or an invoice, but they say that I can issue invoices only if I have a registered business activity. I'm an independent contractor using my SSN for tax purposes. Do they mean that I need to have a business lisense?


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xxxLatin_Hellas
United States
Local time: 18:21
Italian to English
+ ...
Sole Proprietorship Oct 15, 2007

Try to explain to them that under US federal law, you are a registered business in the form of a sole proprietorship (by virtue of filing Schedule C, but this detail may be hard to explain) and, as you already mentioned, your business registration number is the same as your SSN.

Now, at the county and city/town level, you may have also registered as a local business (if you didn't, you ought to check your local ordinances, because probably you should, but laws do vary from state to state, county to county). If you have, your local registration number and certificate is your business license for your county and city/town.

Either or both of these should satisfy them. Hopefully they are not obsessed with bureaucratic details to the point of asphyxiating business before it even gets started.

All the best!

[Edited at 2007-10-15 20:35]


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Nicole Schnell  Identity Verified
United States
Local time: 09:21
English to German
+ ...
Hi Alla! Oct 16, 2007

You should register your business under your personal or whatever assumed business name, you can do this online. Costs approx. $ 20. Look for SBA California (Small Business Administration). Do not register with any website that doesn't end with .gov. You will receive a tax ID #, which is your Employer ID. That's necessary for tax purposes.

A business license is a different thing and is required only if your gross income from self-employed work exceeds $ 25,000/year. The license costs $ 200, which varies from state to state.

I don't know how the Eastern European tax system works - I assume that they have to provide proper tax IDs from foreign contractors to avoid being suspected of money laundering. Same here.

Hope, I could help.

Best,

Nicole

Edit: California is the state where you live, right?

[Edited at 2007-10-16 07:41]


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Samuel Murray  Identity Verified
Netherlands
Local time: 18:21
Member (2006)
English to Afrikaans
+ ...
Ask them what they require from you Oct 16, 2007

Alla Douglas wrote:
...but they say that I can issue invoices only if I have a registered business activity. ... Do they mean that I need to have a business lisense?


It is quite possible that their accountant or accounting department has a certain workflow which requires that all suppliers must be registered in their respective countries. There could be any number of reasons for this, eg perhaps their primitive accounting software requires it, or perhaps they've been burned once to many times by non-registered suppliers, or perhaps they misunderstand how people can do business in your country.

Ask them what they mean by "registered".

Countries differ in subtle ways. In my country I can conduct a freelance translation business without being registered in any other way than my personal capacity, and I don't have to be an independent contractor... because what I sell are goods (translations), not services (translation). Other countries have other ways. This can confusing to clients.


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Iza Szczypka  Identity Verified
Spain
Local time: 18:21
English to Polish
+ ...
Depends which EE country you mean Oct 16, 2007

For example in Poland, employing a physical person requires signing a civil contract for every job, while individuals registered as sole proprietors, independent contractors or any other simple business entities can issue bills without an underlying contract. To be able to issue regular VAT invoices, you additionally need to have a VAT number assigned (even if you don't pay - we have sthg like a passive VAT registration).
If an agency does not follow one of the three methods outlined above, they are likely to get in trouble with the auditor / tax office, which is never a welcome option


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Alyona Douglas  Identity Verified
United States
Local time: 09:21
Member (2007)
English to Russian
TOPIC STARTER
Thank you Oct 16, 2007

Thank you everybody - you've helped a lot!

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juvera  Identity Verified
Local time: 17:21
English to Hungarian
+ ...
Just a comment Oct 19, 2007

Nicole Schnell wrote:
I don't know how the Eastern European tax system works -
Nicole


It does not work any which way, because there is no such thing.
Each European country has its own tax system.


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