Legal status of the entrepreneur: Is the individual entrepreneur an individual or a legal entity? Is the sole proprietorship a legal entity or an individual? How does the law and the tax authorities answer this question?
Why is it necessary to open an individual entrepreneur or legal entity
Any activity that brings systematic income is recognized as entrepreneurial. For example, an individual who is constantly engaged in paid auto repair of someone else's vehicles in a personal box of a garage-building cooperative conducts entrepreneurial activities.
In order not to break the law, you should register an individual entrepreneur or legal entity. Otherwise, a citizen can be brought to administrative (clause 1, article 14.1 of the Code of the Russian Federation on Administrative Violations (CAO) or criminal (part 1 of article 171 of the Criminal Code of the Russian Federation) liability.
Control in this area is carried out by the Federal Tax Service (FTS). And do not hope that no one will know about you and you will not get anything for it. Neighbors and competitors tend to keep a close eye on each other and often write appropriate claims for unearned income.
What is the main difference between sole proprietorship and LLC
The question of the differences between an individual entrepreneur and an LLC is most often faced by novice entrepreneurs. These forms are the most common in the field of small and medium-sized businesses. It is a mistake to think that one is worse than the other. The choice is made on the basis of specific tasks.
There are several factors that will help determine the feasibility of registering an IP or LLC:
- the number of persons planning to do business;
- the scale of the case being opened;
- activities of the future enterprise.
In accordance with the answers to these questions, a decision is made on the most appropriate form of organization.
However, it should be understood that there is one cardinal difference between IP and LLC. Despite the fact that an individual entrepreneur acts on an equal footing with a legal entity, an entrepreneur is primarily a citizen and therefore bears personal responsibility (including with his property) for all decisions and actions of an individual entrepreneur. And an LLC is an independent player in the market, acting as a screen for the founders: they will not bear any personal responsibility.
Comparative table: what is the difference between IP and LLC
|
Individual entrepreneur |
Society with limited liability |
|
Number of members |
|
|
An individual entrepreneur is not an organization, but an independent citizen engaged in entrepreneurship |
Both physical and legal persons can act as founders (participants). Quantity - from 1 to 50 |
|
Authorized capital |
|
|
Not required |
From 10 000 rub. |
|
Location |
|
|
Registered at the place of residence |
Ideal if you own or rent non-residential premises for registration. Nowhere is it prohibited to register at the place of residence of one of the founders or directors. Although the FTS does not encourage this practice |
|
Activities |
|
|
It is forbidden to do:
|
No prohibitions |
|
Documents for registration upon creation |
|
|
|
|
liquidation |
|
|
The IP just needs to apply. State duty - 160 rubles. |
The liquidation of an LLC is a very long (more than 4 months) and complex procedure (it consists of several stages). But there are alternative ways:
|
|
Sale of the enterprise |
|
|
IP can not be sold, you can only close and open a new one |
LLC can be sold |
|
Taxation |
|
|
There are 5 types of taxation:
Taxes depend on the activity, and not on the form of business organization. There are only 2 differences:
|
|
|
Accounting |
|
|
Permission not to drive But if the enterprise is large enough, then in any case, one cannot do without primary documents, accounting for expenses and income |
Mandatory |
|
How to get income |
|
|
You can use the money you earn as you wish. |
2 ways to make a profit:
|
|
Investment attractiveness |
|
|
Difficulties in obtaining loans. There is no way to attract new participants to the business. There are restrictions on participation in public procurement tenders |
The organization is always more attractive to banks and investors |
|
Liability and fines |
|
|
An individual entrepreneur is brought to administrative responsibility as an individual. In accordance with Part 1 of Art. 3.5 of the Code of Administrative Offenses, a fine for citizens cannot exceed 500,000 rubles. |
The amount of fines for administrative violations is much higher. By virtue of h. 1 Article. 3.5 of the Code of Administrative Offenses, they reach up to 1 million, but can be higher - up to 60 million rubles. |
|
Branches and representative offices |
|
|
Can carry out its activities throughout the territory without additional registration |
In case of opening a branch or representative office, each such subdivision must be tax registered |
Advantages and disadvantages
From the table above, it can be seen that there are a lot of differences between individual entrepreneurs and LLCs. However, there are pros and cons of choosing one form or another. entrepreneurial activity. Here are the main pros and cons of IP.
1. Simple and cheap registration.
2. No need to withdraw money - they are already the property of the entrepreneur.
3. Easier accounting.
4. Simple procedure termination of activities.
5. Possibility of transition to the patent system of taxation.
6. There is no need to rent or buy the location of the IP, it is enough to be registered at the place of residence.
1. The need to pay insurance premiums"for themselves", even if there are no employees.
2. Responsibility for debts with all the property of the individual entrepreneur.
3. You can not engage in certain activities, such as selling strong alcohol.
4. You can not sell or donate a business partner.
IP taxation
Recall that for IP there are 5 types of taxation:
- the main system of taxation (OSN);
- simplified system (STS) - income minus expenses (15%), or income (6%);
- single tax on imputed income (UTII) - only for certain types of activities;
- unified agricultural tax (ESKhN) - only for agricultural producers;
- patent system (PSN).
All taxation systems, except for the patent one, can be used by an LLC. However, a patent is an IP privilege. A patent is bought for a period of 1 month to a year. The cost of a patent is determined depending on the potential income of the entrepreneur.
At the same time, each region has its own potential income; accordingly, it is necessary to get acquainted with local legislation.
An individual entrepreneur may be on the PSN, which has less than 15 employees and earns less than 60 million rubles a year.
Responsibility and penalties
As already mentioned, an individual entrepreneur bears individual civil liability with all his property. This means that there is no division into the property of an individual entrepreneur as a citizen and the property of an individual entrepreneur as an entrepreneur.
If the individual entrepreneur is indebted to counterparties or the state, then the bailiffs will collect his personal money in favor of creditors, and if the funds are not enough to pay the debts, the enforcement of all property of the entrepreneur will be carried out.
Penalties for individual entrepreneurs are provided for by the Code of Administrative Offenses of the Russian Federation and the Tax Code of the Russian Federation. There are a lot of them, so here are just the main and most commonly used:
1. Penalties for failure to submit reports. For example, for failure statistical reporting Art. 13.19 of the Code of Administrative Offenses of the Russian Federation provides for a fine of 10 to 20 thousand rubles, and for a repeated violation - from 30 to 50 thousand rubles.
2. Penalty for the lack of a book of expenses and income. The amount of the fine under Art. 120 of the Tax Code of the Russian Federation - 10 thousand rubles. If the book is missing for more than one tax period, then the amount of the fine increases to 30 thousand rubles.
3. Penalty for non-payment of taxes. According to Art. 122 of the Tax Code of the Russian Federation, the amount of the fine is 20% of the amount of unpaid tax. A similar penalty is provided for non-payment of insurance premiums.
4. Penalty for the absence of an employment contract with an employee (part 4 of article 5.27 of the Code of Administrative Offenses of the Russian Federation). The amount of the fine is from 10 to 20 thousand rubles.
Recommendations on the choice of legal form for certain types of activities: for trade, construction, transportation
If we return to the question of what is better than an individual entrepreneur or LLC, in relation to specific types of activity, then the volume of the article will not allow covering them all. But there are popular industries in the business world that can be used to illustrate general course reasoning.
Trade
For retail non-food products, even if it is a large store with an area of more than 150 square meters. m, IP is the most attractive form due to the ease of opening and the ability to apply the patent taxation system.
Owners of small grocery stores may also like the organizational ease of the IP. However, for large supermarkets, and especially the alcohol trade, an LLC will be required without fail.
Construction
This is a huge area of activity, which includes different kinds construction and installation works, such as preparation construction site, construction of buildings, communications, repair and decoration, etc. To obtain the right to maintain many of them, instead of canceled licensing, membership in self-regulatory organizations for design, survey, and construction is required.
Theoretically, nothing prevents an individual entrepreneur from meeting all the requirements and becoming a participant in this market. But we should not forget that the construction is associated with very large investments of customers, therefore, the same obligations on the part of individual entrepreneurs. At the same time, an individual entrepreneur, as mentioned above, is responsible for his activities with personal property.
Transportation
Those who wish to engage in passenger and cargo transportation, as a rule, register an individual entrepreneur. The reason is that they prefer to do this business on their own, on their own transport. But even if a company is organized, for example a taxi, the priority is still for the individual entrepreneur. Exactly at this case you can take full advantage of all the concessions in the field of abolition of accounting and simplification of financial reporting.
If it is planned to engage in large transportation, then the opening is associated with large cash injections of several persons for the creation of a vehicle fleet. In this case, naturally, an LLC is opened.
Thus, at first glance, an individual entrepreneur is more profitable than an LLC for many reasons - due to the simplicity of organizational issues and simplified reporting. But upon careful analysis, it becomes obvious that, for example, the tax burden (the most pressing issue) does not depend on the form of business organization, but on the type of activity.
By the way, there is a rather stable idea that potential partners often prefer to deal with organizations, so LLC is a more prestigious form. This is wrong. In fact, suppliers, customers and resellers do not care who they deal with. The main thing is that the counterparty is respectable.
The conclusion can be drawn as follows. If several people plan to run a business, then you will definitely have to register an LLC. With large-scale plans for the future regarding further expansion by attracting investments, an LLC is also recommended. If the case is individual, chamber, then IP is the best form.
More more materials on the topic in the heading: "IP".
Often people who discover own business, cannot clearly understand their new legal status. Whether the individual entrepreneur remained an individual or became a legal entity.
The current legislation lacks extremely clear formulations in this regard, which seriously complicates the explanation of the current legal situation.
In fact, an individual entrepreneur remains an individual (hereinafter - FL), but at the same time is endowed with the rights of a legal entity (LE). Thus, his dual position is formed. The entrepreneur continues to enjoy all the rights of a citizen of the Russian Federation, as a federal law. A legal entity cannot exercise such rights under any circumstances.
At the same time, an individual entrepreneur receives broad rights as a business entity. In many ways, they are similar to the rights of legal entities. Since this combination of rights is permanent, in a sense there is a mixture of them.
An entrepreneur who sells on election day near a polling station uses the opportunities of a legal entity for entrepreneurial activities. However, at any time he can go to this polling station and exercise his right to the PL by voting for any candidate.
Thus, an individual entrepreneur remains an individual entrepreneur, but he owns a very significant part of the powers inherent in a legal entity. It is impossible to call an individual entrepreneur a legal entity, since the current law contains a direct answer to the question of its status. Civil Code Russian Federation without reservation calls any individual entrepreneur a natural person. This formulation is clear enough and does not require clarification.
The law often emphasizes that the duality of the position of the individual entrepreneur lies in the fact that he enjoys the rights of both the individual entrepreneur and the legal entity. The fact that an individual entrepreneur refers specifically to individuals, even if it has a special status, is not disputed by any legislative act.
IP is available most of the activities that the legal entity has the right to engage in. In addition, there are activities that can only be carried out by citizens who have the status of an individual entrepreneur (for example, the provision of private detective services). An individual entrepreneur can act as a founder of a legal entity, like a sole proprietorship. He has the right to work for hire. Often individual entrepreneurs enter into an agreement with other persons, as individuals, and not as legal entities. This allows you to significantly reduce the amount of taxes that must be paid when making such transactions.
Thus, the status of an individual entrepreneur opens up wide opportunities for its owner. It is significantly more advantageous than the position of an ordinary natural or legal person.
uni-business.ru
Why is it necessary to open an individual entrepreneur or legal entity
Any activity that brings systematic income is recognized as entrepreneurial. For example, an individual who is constantly engaged in paid auto repair of someone else's vehicles in a personal box of a garage-building cooperative conducts entrepreneurial activities.
In order not to break the law, you should register an individual entrepreneur or legal entity. Otherwise, a citizen can be brought to administrative (clause 1, article 14.1 of the Code of the Russian Federation on Administrative Violations (CAO) or criminal (part 1 of article 171 of the Criminal Code of the Russian Federation) liability.
Control in this area is carried out by the Federal Tax Service (FTS). And do not hope that no one will know about you and you will not get anything for it. Neighbors and competitors tend to keep a close eye on each other and often write appropriate claims for unearned income.
What is the main difference between sole proprietorship and LLC
question about differences between sole proprietorship and LLC most often faced by novice entrepreneurs. These forms are the most common in the field of small and medium-sized businesses. It is a mistake to think that one is worse than the other. The choice is made on the basis of specific tasks.
There are several factors that will help determine the feasibility of registering an IP or LLC:
- the number of persons planning to do business;
- the scale of the case being opened;
- activities of the future enterprise.
In accordance with the answers to these questions, a decision is made on the most appropriate form of organization.
However, it should be understood that there is one cardinal difference between IP and LLC. Despite the fact that an individual entrepreneur acts on an equal footing with a legal entity, an entrepreneur is primarily a citizen and therefore bears personal responsibility (including with his property) for all decisions and actions of an individual entrepreneur. And an LLC is an independent player in the market, acting as a screen for the founders: they will not bear any personal responsibility.
Comparative table: what is the difference between IP and LLC
|
Individual entrepreneur |
Limited Liability Company |
|
Number of members |
|
|
An individual entrepreneur is not an organization, but an independent citizen engaged in entrepreneurship |
Both physical and legal persons can act as founders (participants). Quantity - from 1 to 50 |
|
Authorized capital |
|
|
Not required |
From 10 000 rub. |
|
Location |
|
|
Registered at the place of residence |
Ideal if you own or rent non-residential premises for registration. Nowhere is it prohibited to register at the place of residence of one of the founders or directors. Although the FTS does not encourage this practice |
|
Activities |
|
|
It is forbidden to do:
|
No prohibitions |
|
Documents for registration upon creation |
|
|
Receipt of payment of state duty in the amount of 4,000 rubles. |
|
liquidation |
|
|
The IP just needs to apply. State duty - 160 rubles. |
The liquidation of an LLC is a very long (more than 4 months) and complex procedure (it consists of several stages). But there are alternative ways:
|
|
Sale of the enterprise |
|
|
IP can not be sold, you can only close and open a new one |
LLC can be sold |
|
Taxation |
|
|
There are 5 types of taxation:
Taxes depend on the activity, and not on the form of business organization. There are only 2 differences:
|
|
|
Accounting |
|
|
It is allowed not to lead. But if the enterprise is large enough, then in any case, one cannot do without primary documents, accounting for expenses and income |
Mandatory |
|
How to get income |
|
|
You can use the money you earn as you wish. |
2 ways to make a profit:
|
|
Investment attractiveness |
|
|
Difficulties in obtaining loans. There is no way to attract new participants to the business. There are restrictions on participation in public procurement tenders |
The organization is always more attractive to banks and investors |
|
Liability and fines |
|
|
An individual entrepreneur is brought to administrative responsibility as an individual. In accordance with Part 1 of Art. 3.5 of the Code of Administrative Offenses, a fine for citizens cannot exceed 500,000 rubles. |
The amount of fines for administrative violations is much higher. By virtue of h. 1 Article. 3.5 of the Code of Administrative Offenses, they reach up to 1 million, but can be higher - up to 60 million rubles. |
|
Branches and representative offices |
|
|
Can carry out its activities throughout the territory without additional registration |
In case of opening a branch or representative office, each such subdivision must be tax registered |
Recommendations on the choice of legal form for certain types of activities: for trade, construction, transportation
Returning to the question, What is better Sole Proprietor or LLC?, in relation to specific types of activities, the volume of the article will not allow to cover them all. But there are popular industries in the business world that can be used to illustrate the general line of reasoning.
Trade
For non-food retail, even if it is a large store with an area of more than 150 square meters. m, IP is the most attractive form due to the ease of opening and the ability to apply the patent taxation system.
Owners of small grocery stores may also like the organizational ease of the IP. However, for large supermarkets, and especially the alcohol trade, an LLC will be required without fail.
Construction
This is a huge field of activity, which includes various types of construction and installation works, such as preparing a construction site, erecting buildings, conducting communications, repair and finishing, etc. To obtain the right to conduct many of them, instead of canceled licensing, membership in self-regulatory design organizations is required , exploration, construction.
Theoretically, nothing prevents an individual entrepreneur from meeting all the requirements and becoming a participant in this market. But we should not forget that the construction is associated with very large investments of customers, therefore, the same obligations on the part of individual entrepreneurs. At the same time, an individual entrepreneur, as mentioned above, is responsible for his activities with personal property.
Transportation
Those who wish to engage in passenger and cargo transportation, as a rule, register an individual entrepreneur. The reason is that they prefer to do this business on their own, on their own transport. But even if a company is organized, for example a taxi, the priority is still for the individual entrepreneur. It is in this case that you can take full advantage of all the concessions in the field of abolishing accounting and simplifying financial reporting.
If it is planned to engage in large transportation, then the opening is associated with large cash injections of several persons for the creation of a vehicle fleet. In this case, naturally, an LLC is opened.
Thus, at first glance, an individual entrepreneur is more profitable than an LLC for many reasons - due to the simplicity of organizational issues and simplified reporting. But upon careful analysis, it becomes obvious that, for example, the tax burden (the most pressing issue) does not depend on the form of business organization, but on the type of activity.
By the way, there is a rather stable idea that potential partners often prefer to deal with organizations, so LLC is a more prestigious form. This is wrong. In fact, suppliers, customers and resellers do not care who they deal with. The main thing is that the counterparty is respectable.
The conclusion can be drawn as follows. If several people plan to run a business, then you will definitely have to register an LLC. With large-scale plans for the future regarding further expansion by attracting investments, an LLC is also recommended. If the case is individual, chamber, then IP is the best form.
nsovetnik.ru
○ Concept Individual Entrepreneur.
From the point of view of legislation, an individual entrepreneur is not a legal entity. This follows from the definition.
Art. 11 of the Tax Code of the Russian Federation:
Individual entrepreneurs - individuals registered in in due course and carrying out entrepreneurial activities without forming a legal entity, heads of peasant (farmer) households. Individuals engaged in entrepreneurial activities without forming a legal entity, but not registered as individual entrepreneurs in violation of the requirements of civillegislation of the Russian Federation, in the performance of the duties assigned to them by this Code, are not entitled to refer to the fact that they are not individual entrepreneurs.
In accordance with this text of legislation, an individual entrepreneur is an individual who conducts commercial activity. This is quite clear. However legal status IP implies a certain similarity with the status of a legal entity. Let's look further at the similarities and differences between these concepts.
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○ Signs of individuals and legal entities.
An individual is a person who has rights and obligations within the framework of the legal regulation of the state. An individual has certain characteristics:
- Identification is carried out by full name.
- There is no need for additional registration, except for obtaining a birth certificate and a civil passport.
- The right to carry out economic transactions with other persons and organizations.
A legal entity is an organization registered in the register and having separate property, which is responsible for its obligations.
Art. 48 of the Civil Code of the Russian Federation:
- A legal entity is an organization that has separate property and is liable for its obligations, can, on its own behalf, acquire and exercise civil rights and bear civil obligations, be a plaintiff and defendant in court.
- A legal entity must be registered in the unified state register of legal entities in one of the organizational and legal forms.
- Legal entities, on the property of which their founders have real rights, include state and municipal unitary enterprises, as well as institutions.
Legal entities have the following characteristics:
- The presence of registration in a single register.
- Certain property owned.
- Separate name and registered address.
- The presence of a structured team with managers and subordinates.
- The right to obtain licenses for certain activities that are not available in other forms.
- Mandatory presence of a seal and a bank account.
A legal entity is responsible for conducting activities with its property. This sign is identical to the responsibility of an individual and an individual entrepreneur.
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○ Comparison of an individual entrepreneur and a simple individual.
In fact, an individual and an individual entrepreneur have many common features. However, conducting certain types of entrepreneurial activity without registration is not allowed. We will tell you what are the similarities and differences between an individual entrepreneur and an individual.
✔ Common signs.
TO common features include the following facts:
- Legally, individual entrepreneurs and individuals are equal.
- This special person, with full name and identification number.
- The place of permanent registration is the same.
- An individual entrepreneur can act as a citizen when concluding transactions.
- An individual and an individual entrepreneur have the right to conduct business operations, conclude transactions, draw up Required documents and take legal action.
- In the event of a debt, individuals and individual entrepreneurs are liable with the property they own.
From the point of view of legislation, an individual entrepreneur is the status of an individual. However, there is still a difference between these concepts.
✔ Distinguishing features.
The difference between an individual entrepreneur and an individual lies in the system of income taxation and the permissible field of activity. For example, an individual with the status of an individual entrepreneur cannot be an employee and at the same time conduct entrepreneurial activities. A person, being an individual entrepreneur, can be an employee, but as an individual.
Many types of commercial activities are not available to an individual who does not have the status of an individual entrepreneur. So, for example, he cannot open a pavilion and sell any goods there or engage in the provision of household services to the population.
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○ Comparison of individual entrepreneur and legal entity.
Quite often you can find the identification of the status of an individual entrepreneur and a legal entity. This is not entirely correct from the point of view of legislation, but nevertheless, there are certainly similarities between these statuses. Let's take a look at the similarities and differences.
✔ Commonality in activities.
The commonality of activity lies in the following factors:
- The purpose of the establishment is to conduct business and make a profit.
- The need to pass the state registration procedure.
- Availability of taxation systems - simplified tax system, UTII, etc.
- The possibility of employment of employees in accordance with the Labor Code of the Russian Federation.
- May have a bank account (not required for individual entrepreneurs).
- In court, there can be a plaintiff and a defendant.
This is where the similarity ends. Consider the difference between individual entrepreneurs and legal entities.
✔ Distinctive features.
The main differences are as follows:
- An individual entrepreneur is a specific person, a legal entity is an organization.
- Registration of a person as an individual entrepreneur is carried out at the place permanent residence, and a legal entity is registered according to legal address.
- An individual entrepreneur operates independently, a legal entity is a team of people (however, both of them can be employers).
- The property of the organization and its founders is separated from each other, the individual entrepreneur, in turn, is liable with all his property, as an individual.
- IP does not have its own name.
- A legal entity is required to have a seal and a bank account, for individual entrepreneurs, both are advisory in nature.
- The activity of a legal entity is impossible without the availability of statutory documents.
Organizations have the right to conduct commercial activities in any area that does not contradict the law. Entrepreneurs are subject to certain restrictions.
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○ What does the tax office say?
From the point of view of tax legislation, individual entrepreneurs are individuals with a special status. Nevertheless, the Federal Tax Service provides for individual entrepreneurs preferential taxation systems with minimal reporting.
Individual entrepreneurs on a special account. Separate rules and regulations are developed for them.
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✔ Can an individual entrepreneur be converted into a legal entity?
There is no direct prohibition on transformation in the legislation, that is, this is allowed. To do this, you must contact the territorial office of the Federal Tax Service and submit the relevant documents.
topurist.ru
1.4. How is an entrepreneur different from a legal entity?
After analyzing the norms of the current legislation, one can dwell on some differences in the procedure for carrying out entrepreneurial activities in the status of an individual entrepreneur, from the procedure for carrying out entrepreneurial activities using any of the forms of a commercial organization.
In particular, the following differences can be distinguished:
A) when registering a legal entity, the founders make contributions on their behalf to the property of the organization. It can be money, inventory or non-current assets. From that moment on, the property of a legal entity is accounted for separately from the property of the founders. Let's assume that the organization has incurred losses. Creditors demand repayment of debts. A legal entity can settle accounts with creditors only within the limits of its property. That is, to give the main funds, securities, goods, finished products etc. At the same time, the founder can sleep peacefully: it is impossible to take the personal property of the founders for debts, since the organization is liable for debts only with its separate property (Article 48 of the Civil Code of the Russian Federation). In order for a citizen to register as an individual entrepreneur, it is not necessary to form an authorized capital. But at the same time, an individual registered as an individual entrepreneur is liable for his obligations (including those assumed as an individual entrepreneur) with all his property (Article 24 of the Civil Code of the Russian Federation).
B) upon registration, an individual entrepreneur cannot, at his choice, rent an office in any of the districts of the city and register with the tax office at his location, unlike a legal entity.
State registration of a legal entity is carried out at the location indicated by the founders in the application for state registration of a permanent executive body, in the absence of such an executive body at the location of another body or person entitled to act on behalf of the legal entity without a power of attorney.
State registration of an individual entrepreneur is carried out at the place of his residence (clause 3, article 8 of Law No. 129-FZ). Place of residence - residential building, apartment, room, residential premises of a specialized housing stock(office living quarters, living quarters in a dormitory, living quarters of the maneuverable fund, living quarters in the house of the system social services of the population and others) or other residential premises in which a citizen permanently or predominantly resides as an owner, under a lease (sublease) agreement, a lease agreement for specialized residential premises or on other grounds provided for by the legislation of the Russian Federation, and in which he is registered at the place of residence (paragraph 8 of article 2 of the Law of the Russian Federation of June 25, 1993 No. 5242-1 “On the right of citizens of the Russian Federation to freedom of movement, choice of place of stay and residence within the Russian Federation”).
Therefore, in order to obtain the status of an individual entrepreneur, a citizen must submit the necessary documents to tax office at the place of residence. But it should be noted that, for example, the registration authority of Moscow is the Interdistrict Inspectorate of the Federal Tax Service of Russia No. 46 for Moscow. Therefore, both individual entrepreneurs and organizations must submit all necessary documents during registration. If a decision is made on the state registration of a legal entity, an individual entrepreneur, the registering (tax) authority (Interdistrict Inspectorate of the Federal Tax Service of Russia No. 46 for Moscow) makes a corresponding entry in the database of the Unified State Register of Individual Entrepreneurs (EGRIP).
C) individual entrepreneurs may not be engaged in all types of entrepreneurial activities that organizations can carry out. The types of business activities that can only be carried out by organizations and cannot be carried out by individual entrepreneurs include, for example:
- activities related to production and turnover ethyl alcohol, alcoholic and alcohol-containing products in the Russian Federation in accordance with Law No. 171-FZ. Thus, ethyl alcohol is supplied only by organizations that have licenses for the production, storage and supply of produced ethyl alcohol, including denatured alcohol (clause 4, article 9 of Law No. 171-FZ). Also, Law No. 171-FZ establishes that the production and circulation of alcohol (with the exception of retail beer and beer drinks, cider, poiret, mead) and alcohol-containing food products are carried out only by organizations (clause 1, article 11 of Law No. 171-FZ). Retail alcoholic products(with the exception of beer and beer drinks) is carried out by organizations (clause 1, article 16 of Law No. 171-FZ). In addition, Law No. 171-FZ establishes that the production and circulation (excluding retail sales) of alcoholic products containing ethyl alcohol more than 15 percent of the volume of finished products (except for the production of vodka) is entitled to be carried out by state-owned enterprises, as well as other organizations that have a paid authorized capital (authorized fund) in the amount of at least 10 million rubles. The production of vodka is entitled to be carried out by state-owned enterprises, as well as other organizations that have a paid authorized capital (authorized fund) in the amount of at least 80 million rubles. (Clause 2.1, Clause 2.2, Article 11 of Law No. 171-FZ);
- types of activities related to the scope of Law No. 61-FZ. For example, manufacturers medicines there can only be an organization that manufactures medicines in accordance with the requirements of Law No. 61-FZ;
- activities arising from the implementation by pawnshops of lending to citizens on the security of things belonging to citizens and storage activities (Federal Law of July 19, 2007 No. 196-ФЗ “On Pawnshops” (hereinafter - Law No. 196-ФЗ)). So, only a legal entity can be a pawnshop - a specialized commercial organization, the main activities of which are the provision of short-term loans to citizens and the storage of things (clause 1, article 2 of Law No. 196-FZ);
- microfinance activities. Thus, microfinance activity is the activity of legal entities having the status of a microfinance organization, as well as other legal entities entitled to carry out microfinance activities for the provision of microloans (microfinance) (clause 1, clause 1, article 2 federal law dated July 2, 2010 No. 151-FZ “On microfinance activities and microfinance organizations”);
– activities for the organization and conduct of gambling on the territory of the Russian Federation. So, the organizer of a gambling game can only be a legal entity engaged in organizing and conducting gambling (clause 5, article 4 of the Federal Law of December 29, 2006 No. 244-FZ "On state regulation organizing and conducting gambling and on amending certain legislative acts of the Russian Federation” (hereinafter referred to as Law No. 244-FZ));
- private detective work. Thus, an individual cannot register as an individual entrepreneur to carry out private security activities. Private security activities can only be carried out by private security organizations. In accordance with Law No. 2487-1, a private security organization is an organization specially established to provide security services, registered in the manner prescribed by law and having a license to carry out private security activities. And a private security guard can be a citizen of the Russian Federation who has reached the age of 18, who has undergone professional training to work as a private security guard, has passed a qualifying exam, received a private security guard certificate and works under an employment contract with a security organization (clause 2 of article 1.1 of Law No. 2487 -1). Conversely, Law No. 2487-1 does not contain such a thing as a "detective organization" or "private detective agency". A private detective can only be a citizen of the Russian Federation, registered as an individual entrepreneur, who has received, in accordance with the established procedure, a license to carry out private detective (detective) activities and provides services under Part 2 of Art. 3 of Law No. 2487-1.
D) until the beginning of 2012, there was another difference in the activities of individual entrepreneurs and organizations. It is about the procedure for carrying out cash transactions. Previously, the Procedure for Conducting Cash Transactions in the Russian Federation was in force, which was approved by the letter of the Central Bank of October 4, 1993 No. 18. It applied to enterprises, associations, organizations and institutions, regardless of the legal form and field of activity, and individual entrepreneurs were not mentioned in it . In this regard, explanations were given that the previously existing procedure for conducting cash transactions in the Russian Federation did not apply to individual entrepreneurs (letter of the Ministry of Finance of Russia dated March 2, 2011 No.
No. 03-01-10/1-15; letter of the Federal Tax Service of Russia dated June 14, 2011 No. AS-4-2/9386@). Also, in the decision of the Presidium of the Supreme Arbitration Court of the Russian Federation dated June 29, 2010 No. 1411/10, it was determined that the legislation in force at that time did not provide for the obligation of individual entrepreneurs to post cash to the cash desk and to observe the procedure for storing free cash. In the Regulations on the Procedure for Conducting Cash Operations (approved by the Bank of Russia on October 12, 2011 No. extended to individuals engaged in entrepreneurial activities without forming a legal entity.
Thus, from January 1, 2012, individual entrepreneurs were required to comply with the procedure for conducting cash transactions, determined by the Regulation on the procedure for conducting cash transactions, including:
– to determine the limit of the cash balance;
- to keep cash in bank accounts in banks in excess of the established limit of the cash balance;
- register cash transactions in cash cash orders and expenditure cash orders;
- ensure the availability of cash documents and other documents drawn up in the course of cash transactions, within the time limits established by the legislation on archiving in the Russian Federation;
- keep a cash book.
However, the Regulations on the Procedure for Conducting Cash Transactions became invalid due to the adoption of Bank of Russia Ordinance No. 3210-U dated March 11, 2014 “On the Procedure for Conducting Cash Transactions by Legal Entities and the Simplified Procedure for Conducting Cash Transactions by Individual Entrepreneurs and Small Businesses” (hereinafter - Instruction on the procedure for conducting cash transactions of legal entities and individual entrepreneurs).
In accordance with paragraph 4.1 of the Directive on the procedure for conducting cash transactions of legal entities and individual entrepreneurs, individual entrepreneurs must conduct cash transactions.
At the same time, in accordance with clauses 4.1 and 4.6 of the Directive on the procedure for conducting cash transactions of legal entities and individual entrepreneurs, keeping records of income or income and expenses and (or) other objects of taxation or physical indicators in accordance with the legislation of the Russian Federation on taxes and fees, characterizing a certain type of entrepreneurial activity:
a) may not draw up cash documents;
b) may not keep a cash book.
E) legal entities must have an independent balance sheet or estimate and be sure to keep accounting records. Unlike them, individual entrepreneurs only keep records of income and expenses to calculate taxes that should be paid to the budget. Thus, an individual entrepreneur does not have to keep accounting records, he is obliged to keep records of income and expenses and business transactions in the appropriate ledger. On January 1, 2013, the new Federal Law of December 6, 2011 No. 402-FZ “On Accounting” (hereinafter referred to as the Law No. 402-FZ) came into force. It applies to the following persons (economic entities):
- commercial and non-profit organizations;
– government bodies, local self-government bodies, management bodies of state extra-budgetary funds and territorial state extra-budgetary funds;
– Central Bank of the Russian Federation;
- individual entrepreneurs, as well as lawyers who have established law offices, notaries and other persons involved in private practice;
- branches, representative offices and other structural subdivisions of organizations established in accordance with the legislation of foreign states located on the territory of the Russian Federation, international organizations, their branches and representative offices located on the territory of the Russian Federation, unless otherwise provided by international treaties of the Russian Federation.
An economic entity is required to keep accounting records in accordance with Law No. 402-FZ, unless otherwise provided by Law No. 402-FZ. However, Law No. 402-FZ establishes that accounting in accordance with Law No. 402FZ may, in particular, not be kept by an individual entrepreneur, a person engaged in private practice, if, in accordance with the legislation of the Russian Federation on taxes and fees, they keep records of income or income and expenses and (or) other objects of taxation in the manner prescribed by the said legislation. Clause 2 of Art. 54 of the Tax Code of the Russian Federation. Thus, from January 1, 2013, an individual entrepreneur may also not keep accounting records, since he is obliged to keep records of income and expenses and business transactions in the Book of Accounts.
At the same time, it should be noted that some regulatory legal acts that relate to the procedure for filling out calculations and other forms of documents contain provisions that they are filled out on the basis of data accounting. At the same time, no distinction is made regarding the procedure for filling out these forms by organizations or individual entrepreneurs. So, for example, in para. 2 clause 1 of the procedure for filling out the calculation form for accrued and paid insurance premiums for compulsory pension insurance to the Pension Fund of the Russian Federation and for compulsory medical insurance to the Federal Compulsory Medical Insurance Fund by payers of insurance premiums making payments and other remuneration to individuals (form RSV-1 PFR) (approved by Resolution of the Board of the Pension Fund of the Russian Federation dated January 16, 2014 No. 2p) states that the basis for filling out the calculation in the RSV-1 PFR form is accounting and personnel records.
Similar provisions are indicated, for example, in clauses 7.10, 7.11, 7.17, 25 of the Procedure for filling out the calculation form for accrued and paid insurance premiums for compulsory social insurance in case of temporary disability and in connection with motherhood and for compulsory social insurance against industrial accidents and occupational diseases, as well as expenses for the payment of insurance coverage (form 4-FSS), approved by Order of the FSS of the Russian Federation dated February 26, 2015 No. 59.
Also, paragraph 1 of Art. 11 of the Federal Law of April 1, 1996 No. 27-FZ "On individual (personalized) accounting in the system of mandatory pension insurance” indicates that personalized accounting information on insurance premiums paid, which insurers submit to the territorial body of the Pension Fund of the Russian Federation, is formed on the basis of accounting data.
E) some articles of the Code of Administrative Offenses of the Russian Federation, which provide for measures of administrative responsibility for offenses in the field of taxes and fees that apply to organizations, cannot be applied to individual entrepreneurs. So, some measures of administrative responsibility are not applied to individual entrepreneurs, provided, in particular:
- Art. 15. 3 of the Code of Administrative Offenses of the Russian Federation for violation of the deadline for registration with the tax authority;
- Art. 15.4 for violation of the deadline for submitting information on opening and closing an account with a bank or other credit institution;
- Art. 15.5 for violation of submission deadlines tax return;
- Art. 15.6 for failure to provide information necessary for the implementation of tax control;
- Art. 15.7 for violation of the procedure for opening an account for a taxpayer;
- Art. 15.8 for violation of the deadline for the execution of an order to transfer a tax or fee (contribution);
- Art. 15.9 for non-execution by the bank of the decision to suspend operations on the accounts of the taxpayer, the payer of the fee or the tax agent;
- Art. 15.11 for a gross violation of the rules of accounting and reporting.
Individual entrepreneurs cannot be brought to the administrative responsibility established by the above-mentioned norms as officials. This follows from the note to Art. 15.3 of the Code of Administrative Offenses of the Russian Federation. This rule also applies to cases where an individual entrepreneur, without concluding employment contracts to perform the duties of the head, chief accountant and other officials, he himself exercises the rights and obligations of these officials (paragraph 23 of the resolution of the Plenum Supreme Court RF dated October 24, 2006 No. 18 “On some issues arising from the courts when applying the Special Part of the Code of Administrative Offenses of the Russian Federation”);
i) the restrictions established for the start of the application of the simplified tax system by organizations and individual entrepreneurs differ. This information is described in more detail in paragraph 13.2 of this Book.
national question.rf
Since the legislation of the Russian Federation and other countries provides the opportunity to conduct business activities, both through an individual and a legal entity, the question of classifying individual entrepreneurs in these two categories is relevant.
This article offers a detailed understanding of what a legal entity is and what an individual is and answers the question of whether an individual entrepreneur is a legal entity or an individual, and what consequences follow from this.
What is a legal entity
The concept of a legal entity has been around for a long time. Some experts attribute the appearance of the first legal entities to the times ancient rome. But practical use of this concept, and given, as it is called “the institution of law”, began relatively recently. Place of birth modern understanding legal entity is England. And since case law is in force in this country, the birth of the modern legal entity took place in a litigation.
Solomon v. Solomon & Co. (1897) is the starting point that influenced the formation of the modern understanding (doctrine) of a legal entity. For the first time in the decision in this case, it was clearly stated that the company is an independent entity, a participant in civil law relations and a defendant in court. In civil circulation, it participates on an equal basis with individuals. The founders and other members of the company are not liable for its debts.
This understanding of the legal entity is reflected in Russian legislation. Modern for new Russia the understanding of the term "legal entity" was given by the Civil Code of the Russian Federation, which entered into force (first part) on January 1, 1995.
In a slightly modified edition in 2014, the Civil Code of the Russian Federation gives the following characteristics of a legal entity:
- isolated property,
- the ability to respond with property for their debts,
- a legal entity exercises civil rights on its own behalf, as well as acquires,
- able to carry out civic duties,
- a legal entity acts as a defendant and a plaintiff in court.
When creating a legal entity, it must be registered in the state register of legal entities. At the same time, one of the organizational and legal forms provided for by law must be chosen for registration.
In addition, it should be added that a legal entity is not liable for the debts borne by its participants (shareholders, founders), and they, in turn, are not liable for its debts. There are a number of exceptions to the last rule, in particular, if the founders, when creating a legal entity, did not fully pay authorized capital. But even in this case, the liability of the founders is limited only by the size of the unpaid share.
Running a little ahead, it is worth noting that the so-called “removal of the corporate veil” doctrine has not yet taken root in Russia. Generated by the same precedent legal system not characteristic of our state, this doctrine is quite popular abroad.
The essence of the doctrine lies in the fact that if a legal entity was used as an instrument for entrepreneurial activity, then the persons who stood behind this legal entity can be subject to civil liability measures that are usually applied to legal entities themselves. One of the few attempts to apply this doctrine in Russia is the decision in the case of Parex Bank.
The convenience of working through a legal entity, when doing business, is explained precisely by the protection of the founders of the company from the requirements of its creditors. A legal entity can conduct unprofitable activities, accumulating debts and "collecting" the claims of creditors. And if intent (fraud) is not found in the actions of its founders, then it will not be possible to apply measures against them, any responsibility. Considering that the vast majority of legal entities in Russia are registered with a minimum authorized capital of 10,000 rubles, then this question is quite relevant.
Banks that issue loans and companies that have qualified lawyers on staff in order to avoid the possibility of loan defaults or other consequences of default, necessary condition conclusion of contracts (for the provision of loans, loans, for example) puts the receipt of guarantees from counterparties. For example, a pledge of property, or a guarantee for possible debts of counterparties by the founders.
What is an individual
Further, to answer the question: "Is the IP a legal entity or an individual?" it is required to consider what constitutes a physical person. The Civil Code actually equates the concepts of "natural person" and "citizen". This follows from the title of the third chapter of the code "Citizens (individuals)". But here we must not forget that the effect of civil law applies equally to both Russian citizens and foreign citizens and stateless persons, unless otherwise specified in the law. But if we are talking on administrative legislation, its norms are valid depending on the presence or absence of citizenship of a particular individual.
From the norms of the Civil Code, the following characteristics of an individual can be distinguished:
- legal capacity - an individual is able to be a participant in civil legal relations and, accordingly, a bearer of civil obligations.
- legal capacity - an individual is able, through his actions, to acquire and then exercise rights and obligations, this characteristic depends on the age of the person.
- an individual, being a debtor, is liable for his obligation with all his property, with some exceptions established by law.
IN in general terms, these characteristics are similar to those of a legal entity. What distinguishes an individual from a legal entity? Here are some significant criteria for differentiation:
- an individual exists in reality - a legal entity is a fiction,
- an individual can be a citizen of the Russian Federation, a foreigner, a stateless person - legal entities are divided by organizational legal forms- LLC, JSC, State Unitary Enterprise, etc.
- in order for a legal entity to become a full participant in civil legal relations, it is necessary to register it, for a physical entity it is necessary to reach the age specified by law,
- a legal entity, if it is a commercial organization, is immediately created to engage in entrepreneurial activity - an individual (person) may never be engaged in such.
From the point of view of legislation, all activities carried out by an individual can be divided into four types:
- work and service
- provision of services and performance of works in a civil law manner,
- private practice,
- individual entrepreneurial activity
The first case refers to the activities in which the majority of individuals are engaged. The main number of citizens, gets a job, or goes to the service. In their case, the activity is carried out on the basis of an employment contract or service contract with the employer.
The second type includes citizens who, without concluding labor contracts, perform one-time services or work. Relations with customers, in such cases, are generally regulated by civil law and specified in civil law contracts. key point in this situation is that such services (works) are performed by an individual one-time - such activities are not of a systematic, permanent, nature.
Private practice includes the activities of notaries, lawyers, arbitration managers. Such activity by its nature is as close as possible to entrepreneurial, but at the same time it has an important social orientation. Therefore, it is regulated by law separately.
And finally, business citizens. They conduct a continuous, profit-making activity carried out at their own peril and risk. They are responsible for their debts with all their property, with the exception of that property, on which, according to the law, it is forbidden to foreclose. A citizen may be subject to bankruptcy proceedings in cases and in the manner prescribed by law.
In addition to these types of activities carried out by individuals, in the near future in Russia it will be possible to carry out activities on the basis of a patent, without registering as an entrepreneur.
What is an IP?
So, having analyzed the two indicated categories, between which it is necessary to make a choice, we determine, after all, what the IP refers to, a legal entity or an individual.
First, it is worth recalling what the abbreviation IP stands for. This name, which came to replace the previously widely used one, means - "individual entrepreneur". The Civil Code does not provide an explanation for the term "individual entrepreneur". Instead, it is said that an individual can engage in entrepreneurial activities after registering as an individual entrepreneur.
Issues related to registration are the responsibility of tax authorities. The activities of the tax authorities are regulated by the Tax Code of the Russian Federation. In it, we find the concept of an individual entrepreneur. According to the Tax Code of the Russian Federation, an individual entrepreneur is characterized by the following features:
- registration in the manner prescribed by law,
- carrying out entrepreneurial activities without forming a legal entity,
- these are only individuals.
These characteristics of an individual entrepreneur (individual entrepreneur) make it possible to unambiguously answer the question “Is an individual entrepreneur a legal entity or an individual?”. IP is only an individual. It remains only to answer why this question arose, and with what it is connected.
The fact is that, according to the norms of civil law, the rules and regulations governing the activities of legal entities - commercial organizations are applied to the activities carried out by IP. Accordingly, if the law somewhere states that certain norms apply to legal entities, therefore, it must be understood that they also apply to individual entrepreneurs, unless otherwise indicated. This issue is solved in the same way in the field of legislation on administrative responsibility.
An individual is any citizen who has the legal capacity and capacity to act. Legal capacity is understood as the ability to have civil rights and obligations (the right to own property, the right to engage in entrepreneurship and other activities not prohibited by law, etc.). Legal capacity is understood as the ability of a citizen to acquire rights and create legal obligations, to bear responsibility for the offenses committed by his actions. According to Russian laws, citizens who have reached the age of majority (18 years) have full legal capacity.Creating a small business as an individual is the easiest and fastest way to get involved in entrepreneurial activity. Therefore, today the vast majority of small businesses are individuals. However, this simplified form has a number of disadvantages, most of which can be avoided by creating a small business in the form of a legal entity.
A legal entity is an enterprise that owns, manages or manages separate property and is liable for its obligations with this property. A legal entity may, on its own behalf, acquire property and non-property rights, bear obligations, be a plaintiff and a defendant in court. Legal entities must have their own balance sheet and budget. A small business to be established in the form of a legal entity in legal relation is an organization.
When registering a legal entity, the founders make contributions to the property of the organization on their behalf. It can be money, inventory or non-current assets. From this point on, the property of a legal entity is accounted for separately from the property of the founders. If the organization has suffered losses, and creditors demand the return of debts, a legal entity can pay off creditors only within the limits of its property. That is, to give away fixed assets, securities, goods, finished products, etc. At the same time, the founder can sleep peacefully: it is impossible to take the personal property of the founders for debts, since the organization is liable for debts only with its separate property.
If an individual entrepreneur is at a loss and cannot repay his debts to his creditors, then by a court decision he may be declared bankrupt. From the moment such a decision is made, the citizen is deprived of his status as an individual entrepreneur.
In order to satisfy the requirements of creditors, an individual entrepreneur will have to pay for debts not only the property that he used in his activities. Collection for debts can be imposed on the cottage, and on the apartment, and on the car, and on the garage of a citizen. After all, the entrepreneur has to answer for his debts with all his property.
First of all, the claims of citizens to whom the entrepreneur is liable for causing harm to life or health, as well as claims for the recovery of alimony, are satisfied. Then the entrepreneur will have to settle accounts with employees by paying them wages And severance pay. Then creditors will receive their share, whose claims are secured by a pledge of property belonging to an individual entrepreneur. In the fourth stage, the debt will be repaid mandatory payments to the budget and off-budget funds. And lastly, the claims of all other creditors are satisfied.
Disputes between citizens registered as individual entrepreneurs, as well as between these citizens and legal entities, are resolved arbitration courts. With the exception of disputes not related to the implementation of entrepreneurial activities by citizens.
Legal entities must have an independent balance sheet or estimate and be sure to keep accounting records. In contrast, individual entrepreneurs only keep records of income and expenses to calculate the taxes that they should pay to the budget.
In some cases, it is advisable to start a business without forming a legal entity, and only then, having gained experience and accumulated the necessary capital, register a small business - a legal entity.
For a person who is on the verge of creating his own business, the question of an individual entrepreneur or LLC is not rhetorical. The answer to it should be very thoughtful and balanced, since both the profitability of the future business and the possibility of doing business depend on it. To understand what is better than an individual entrepreneur or LLC, you need to compare these two structures by key indicators.
Concept Analysis
IP - a person engaged in activities for profit without forming a legal entity. person, but in fact possessing many of his rights. Responsible with all its property, including those that are not involved in production activities. And even after the IP is officially closed.
LLC (Limited Liability Company) is a legal entity in the form of a firm, enterprise, company, for which liability is provided within the authorized capital.
From these two short definitions we can conclude that to open an individual entrepreneur or LLC in a particular case. However, there is no need to rush, the table below suggests important points that characterize both options for doing business. This information will allow a beginner individual entrepreneur to more realistically assess their needs and capabilities.
Important! First of all, pay attention to how an LLC differs from an individual entrepreneur: the legislator does not allow an individual entrepreneur to sell, donate or re-register in another way. It can only be closed. A, LLC can article the object of sale or reissuance.
Table: difference and differences between IP and LLC
| Parameter | IP | OOO |
|---|---|---|
| The amount of tax deductions | PFR - a fixed rate, paid even at zero yield. For 2015, the amount is determined at - 22,261.38 rubles. With income over 300 thousand rubles. additional 1% - 148,886.40 rubles. | Since 2015, the founder has been paying 13% of dividends (was 9%). In practice, this means that with any profit received. An individual entrepreneur does not have such a tax, therefore, in any case, the LLC has more deductions by 13%. |
| Prestige | many government agencies it is forbidden to interact with the IP. They are considered to be less reliable. | Many companies have a condition in the tender requirements that only legal entities can apply for cooperation. individuals, including LLCs. |
| Taxation system | The IP has the right to choose the patent system. | There is no patent system for LLC. |
| Investments | Third-party investors practically do not invest in IP. | Attracting investors is relatively easy. |
| Registration | Registration takes place at the place of residence of the entrepreneur. The procedure itself is simple. State duty - 800 rubles. | Registration takes place at the legal address of the organization, and is associated with a number of bureaucratic hassles. State duty - 4000 rubles. |
| Accounting | Accounting in the direct interpretation of the term is optional. In this, the advantages of an individual entrepreneur over an LLC are obvious. | It is necessary to keep accounting records and submit relevant reports. For large turnovers, it is necessary to have an accountant on staff. |
| Cash register | It is not obliged to adhere to cash discipline and monitor limits. | It is obligatory to keep a journal of the cashier-operator, PKO, RKO. Strict observance of cash limits. |
| Design features | It does not imply the mandatory presence of an authorized capital, the development of a charter, obtaining a seal, opening an account. | When registering, you need an authorized capital (from 10 thousand rubles), a charter and a bank account. |
| Facilities | He has the right to dispose of his own at his own discretion. | Only targeted cashing of funds is allowed. Dividend payments are taxed at 9%. |
| Control | The individual entrepreneur is responsible for the maintenance and accounting of primary documentation, even if it is signed by the person to whom he issued the power of attorney. | Management is carried out by a director who is appointed. He is responsible for all activities of the organization. |
| institution | Can only be registered for one person. Companions should think carefully about what is more profitable for an individual entrepreneur or an LLC. | Up to 50 co-founders are allowed. |
Restriction on types of activities for individual entrepreneurs
So, what is more profitable for an individual entrepreneur or LLC, you decide when you interpret the information provided, taking into account the characteristics of the activity that you think will bring you profit. An absolute plus individual entrepreneurship is a simplified scheme for registering and keeping records of work.
On the other hand, when determining what is better for an individual entrepreneur or LLC, you should pay attention: an individual entrepreneur does not have the right to engage in a number of activities, namely:
- produce drugs;
- produce pyrotechnic products;
- produce weapons and goods belonging to this category;
- to produce, test and develop aviation equipment;
- provide private security services;
- to carry out an examination of industrial facilities;
- sell electricity;
- provide banking services;
- work in the gambling industry.
Important! When deciding on an individual entrepreneur or LLC, keep in mind that when working without creating a legal entity. persons, you cannot count on the help of the bank deposit recovery fund.
With this in mind, in some cases the question of what to open an individual entrepreneur or LLC finds a solution by itself. If you intend to do any of the above, then you will have to open a legal entity - the legislator does not provide for other conditions. Of course, this is not the whole difference and difference between an individual entrepreneur and an LLC, however, in our opinion, these main factors will allow you to make the right choice.
