A merchant is one who regularly or permanently carries out commercial activities.
A trader is primarily engaged in buying and selling products on the market in order to make a profit from this intermediation. In order to be considered as such, merchants must comply with a series of requirements specified by law, among which are: registration, accounting and compliance with the rules of free competition, among other obligations.
How a Trader Profits
Traders make a profit from their activities by charging a trading margin. That is, adding an additional amount to the cost of the products or services you sell. To achieve this, merchants usually buy in bulk (large volumes) for a reduced price, and then sell each unit at a higher price than it cost them.
Importance of merchants
Merchants have a very important role in society. They facilitate the exchange of goods and services, which increases people's well-being and fosters the growth of the country.
Among its most relevant activities are:
- Bring together producers and buyers.
- Make known the characteristics of the products or services.
- Expand the variety of products and services available to consumers, including importing and exporting goods from different countries.
- Serve as a communication channel between producers and consumers.
- Facilitate post-sale services such as: claims, repairs of breakdowns, guarantees, etc.
Requirements to be considered a merchant
In the case of Spain, merchant activity is open to anyone who wishes to carry it out as long as some basic requirements are met.
Next, we describe some of the essential requirements specified in the Commercial Code:
- Carry out business on a regular basis.
- Registration in the Mercantile Registry.
- Keeping accounts where their activities are recorded in an orderly manner and it is possible to do a follow-up.
- Keep accounting books, correspondence, supporting documents and any other documentation for a period of six years.
- Legalize the accounting books before the Mercantile Registry.
- Request registration in the Census of Taxpayers dependent on the Ministry of Economy and Finance
- Obtain the Tax Identification Number (NIF).
- At the end of the fiscal year, publish a balance sheet, an income statement (profit and loss), a statement that reflects the changes in equity for the year, a statement of cash flows and a report of the firm.
- Submit to an audit as required by law.
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