STUDENT START-UPS 2023

Running their own business and the prospect of unlimited earnings are a tempting prospect for young people. Especially as setting up a business as a student in 2023 is straightforward and seems to make perfect sense. But can a student set up a business? It turns out they can.

Can a student set up a business?

Can a full-time student set up a business? Yes! There are no legal provisions preventing students from running their own business. It also makes no difference whether they are studying full-time, part-time or by correspondence. For a student, running their own business is an opportunity for professional development, managing the business according to their own strategy and enjoying a high degree of independence. There are many more advantages to running your own business.

If students feel they are ready to set up their own business and have already decided which sector to enter, they should consider the legal form under which they will operate it. The law provides for various options in this regard. In principle, a student may set up a business in the form of:

• an unregistered business,
• a sole trader,
• a company.

Which should they choose?

Unregistered business activity versus a student setting up a business in 2023

A student thinking of setting up their own business may operate as an unregistered business provided they meet two conditions simultaneously. Firstly, their monthly income from the business must not exceed 75 per cent of the minimum wage, i.e. PLN 2,700 gross. It is worth noting that exceeding this threshold results in an obligation to register a business. Secondly, the student must not have run a registered business within the last 60 months. It is also worth mentioning that, in some sectors, running a business requires the company to be registered.

Advantages and disadvantages of a student setting up a business in this form in 2023

The main advantage of running a business in this form is, above all, the absence of the need to pay contributions to the Social Insurance Institution (ZUS). Furthermore, entrepreneurs operating as unregistered businesses do not pay advance income tax. The entrepreneur does not have to keep complex accounts, and can close the business immediately.

Of course, setting up a business as a student in the form of an unregistered business also has certain disadvantages. Firstly, the entrepreneur cannot exceed the threshold above which they would have to register the business with the CEIDG. Secondly, a business operating in this form may appear less professional and credible, which could result in fewer customers. Another disadvantage is the inability to receive grants for the business.

For whom is an unregistered business the best option? Setting up a business in this form as a student in 2023 is an interesting option for those who are unsure whether their business will take off. It is also a good option for students who expect low takings or simply want to earn some extra money.

Setting up a business as a student in 2023

It is possible for a student to set up a business. However, the prospective entrepreneur must bear in mind that they will have to pay social security contributions, make advance income tax payments and keep accounts. Setting up a business as a student is no different from setting up a sole trader business for anyone else. This can be done in person at the town hall or online via the www.biznes.gov.pl platform.

ZUS and a business set up by a student in 2023

When a student sets up a business and registers it with the CEIDG, they are obliged to pay contributions to the Social Insurance Institution (ZUS). Students should be aware that their student status does not entitle them to exemption from paying social security contributions to ZUS or to paying lower contributions in this respect. However, if this is the student’s first business, they may benefit from preferential ZUS contributions, on the same terms as other entrepreneurs starting a business who are eligible for the insurance institution’s schemes.

Start-up grants for students

Students can benefit from various types of funding. Start-up grants for students will help young entrepreneurs get their businesses off the ground. Where can they be found? Firstly, it is worth applying for funding for students starting their own businesses through the jobcentre. The maximum amount of a start-up grant for students is the same for everyone, regardless of whether they are currently studying or not, and amounts to six times the average monthly wage, i.e. approximately 40,000 PLN. Of course, funding for students to set up their own businesses can also be sought elsewhere – EU funds may prove helpful.

Advantages and disadvantages of a student running a business in this form

One advantage of a student setting up a business in 2023 as a sole trader is the entrepreneur’s unlimited earning potential. Furthermore, an enterprising student can run their business according to their own strategy, does not need to contribute start-up capital to the business, and the accounting for sole traders is simpler than the full accounting requirements for companies. In addition, the student can benefit from preferential social security (ZUS) contributions. On the other hand, the drawbacks of a student setting up a business in this form include liability for debts with their own assets, the obligation to pay social security contributions regardless of whether they earn an income or not, and the need to make advance income tax payments.

A sole trader business is a good choice for enterprising students who wish to run a business requiring registration in the business register. It is also a suitable option for students who expect higher revenues and for those who wish to project a professional image on the market.

Setting up a business as a student in 2023 in the form of a company

Can a student set up a business as a company? Absolutely. To do so, they must register the company with the National Court Register. It is important to be aware that a student who is the sole shareholder of a company will be treated in a similar way to a sole trader, meaning they will have to pay social security contributions (ZUS).

Advantages and disadvantages of a student running a business as a company

One advantage of a commercial company is that the members of the management board have limited liability for the company’s debts. It also carries greater prestige – the business appears more profitable and credible. Entrepreneurs are also attracted by favourable corporation tax rates. On the other hand, among the biggest disadvantages of a commercial company are the requirement to contribute share capital of 5,000 PLN in the case of limited liability companies (sp. z o.o.), and the obligation to maintain full accounts and prepare financial statements.

Setting up a business as a student in the form of a commercial company is a good choice for entrepreneurs who wish to minimise their personal liability for the company’s debts and who value prestige.