Opening an Authorized Business in Ramat HaSharon

What is a Licensed Business Owner and Who is it Right For?

A licensed business owner is someone who has started their own business activity — a self-employed person who manages themselves, maintains their own clients, and receives direct income from their work. Unlike an employee who receives a monthly paycheck, the self-employed person handles their own accounting, tax reporting, and payments to the tax authority and national insurance.

If you are planning to open a business in Ramat HaSharon — whether it is a service (technician, designer, coach), craft, consulting, or any other business activity — you are exactly our audience. In most cases we see, new self-employed individuals do not understand exactly what the first legal steps are, how much it costs, and what happens after registration. That is where we come in to help.

A licensed business owner is a type of registration that allows you to start working as a self-employed person legally. Without such registration, you cannot invoice clients, cannot manage a business bank account, and cannot be legally protected.

Step by Step: How Do You Open a Licensed Business?

The process in Ramat HaSharon works exactly as it does in the rest of the country. There is no difference between Ramat HaSharon, Tel Aviv, or Netanya — the tax authority is national. However, because you are in the central region, you have an advantage: tax authority offices are nearby, and there are many accountants who know the local procedures.

Here are the practical steps:

1. Preparation of basic documents: Identity card, personal bank details, and address of the workplace (even if it is your home). If you are married or in a partnership, you can choose whether to file as a sole proprietor or as partners.
2. Submission to the tax authority: The submission is done through the tax authority website or through form 101. If you are working with an accountant (and it is recommended), they can submit on your behalf and guide you through every step.
3. Receiving a business number: The tax authority will send you a unique business number within a few days. This is the number you will use in all official correspondence, invoices, and reports.
4. Opening a business bank account: After receiving your business number, you can open a business bank account at the bank of your choice. This is essential to separate personal income from business income.
5. Registration for national insurance: As a licensed business owner, you must be insured through national insurance. Registration is done through the national insurance center or through an accountant.
6. Monthly accounting: From the month of opening onwards, you must keep a record of income and expenses. This can be done in simple Excel sheets or accounting software — and this is exactly where an accountant can help you.

This process usually takes a few weeks from the time of decision to the day of official opening. However, if you work with an accounting firm in Ramat HaSharon, they can accelerate the process and guide you through each step so you do not miss anything.

What Happens After Opening a Business? Accounting and Reporting

After you open a licensed business, accounting obligations begin immediately. This is not something you can leave until the end of the year.

Every month, you need to record income and expenses. Every quarter, if you owe advance tax payments, you need to pay the tax authority. And at the end of the year, you need to submit an annual report (Form 106) that summarizes all business activity for the year.

In short: opening a business is not just a form. It is the beginning of a year of accounting responsibilities and reporting obligations.

Manage Accounting Yourself or with an Accountant?

Some self-employed individuals manage everything themselves. They keep receipts, update spreadsheets, and submit reports on their own. This is possible, but requires time and accuracy.

Most clients we see in the Ramat HaSharon area choose a different approach: they work with an accountant. Why? Because it saves time, prevents errors, and ensures they don't miss deadlines or deductions they are entitled to.

An accountant can manage the accounting for you, ensure reports are correct, and plan taxes so you don't overpay. Ben Or Kook, for example, offers digital support — you send receipts through an app, and the office handles the rest. It's simple and accessible.

What You Need to Know About Income Tax and National Insurance?

As a licensed self-employed person, you pay two types of payments: income tax and national insurance. Both are mandatory, and both affect your profit at the end of the year.

Income Tax: This depends on your income. If you earn little, you may be exempt from paying income tax in your first year (under certain conditions). However, if you earn more, you pay tax on net profit (income minus allowable expenses).

National Insurance: This is a fixed monthly payment that provides you with coverage for unemployment, illness, pension, and other benefits. The payment is calculated based on estimated income and can be updated annually.

One point that is not always clear: if you are a licensed self-employed person, you do not pay employer national insurance. You pay only as a self-employed worker. This is typically less than an employee, but it is still mandatory.

Most new self-employed professionals we see in Ramat Hasharon, Ramat Gan, and Petah Tikva do not plan these payments in advance. They think gross income equals profit. In the first few months, they are surprised when it comes time to pay tax or national insurance. Proper planning from the start avoids these troubles.

Common Mistakes When Starting a Business — and How to Avoid Them

In recent years, we have seen many new business owners encounter problems that were easy to avoid. Here are the most common mistakes:

• Did not submit registration forms at all: Some business owners start working without formally registering. This is a major problem. If the tax authority discovers this, you could face fines and accumulated debts. Start legally from the beginning.
• Mixed personal bank account with business account: All transactions went through the personal account. This creates a mess in accounting and complicates tax authority audits. Open a business bank account from the start.
• Did not keep receipts and expenses: At the end of the year, they could not prove expenses. Without receipts, the tax authority will not accept deductions. Keep everything.
• Forgot to pay advance tax: In certain months, the tax authority requires advance tax payments. If you did not pay, debts and interest accrued. Track the deadlines.
• Did not update national insurance when income changed: Business owners whose income increased only update national insurance at the end of the year. Updating immediately prevents surprises.
• Submitted annual report late: The submission deadline is usually in November of the following year. If you miss it, there are fines. Track the deadlines.

All of these are mistakes that an accountant can help you avoid. This is exactly why it is worth working with someone who knows the procedures.

When Should You Contact an Accountant?

If you are at the stage of opening a business, it is advisable to reach out now. You don't need to wait until there is a problem.

Ben Or Kook offers a first consultation meeting at no cost. In this meeting, we understand your situation, explain the steps, and you can decide whether it is worthwhile to work together. There is no obligation.

You primarily need an accountant if:

• You are opening a business for the first time and are unsure about the steps.
• You want to ensure you don't miss deadlines or legal requirements.
• You want tax planning to save money at year-end.
• You dislike bookkeeping and calculations.
• You want digital guidance that allows you to work at your own pace.

In Ramat HaSharon, Ramat Gan, and Petah Tikva, we work with many self-employed individuals and companies. We are familiar with local procedures and have office hours that are convenient for business owners in the central region.