Benefits of entrepreneurship for society. An entrepreneur is not a sheep, he does not need a shepherd

When you are just thinking about starting your own business, first of all you need to understand the profitability of the business idea and the sources of its financing. But the next in importance will be the organizational issue - in what format to register a business? What are the pros and cons of IP and LLC, and how to choose between them?

Status of IP and LLC

Let's start with the fact that although a limited liability company and an individual entrepreneur are entities entrepreneurial activity their status is different. - an individual, a citizen, a person. - legal entity, organization, company.

That is, an individual entrepreneur is not isolated from its “carrier” - an individual, and a limited liability company is a separate entity civil law, which acts on its own behalf, and not on behalf of the founder. The different status of an individual and a legal entity is the main difference between an individual entrepreneur and an LLC, from which all other significant differences follow.

And now let's see what questions you need to pay attention to before making a choice between an individual entrepreneur and an LLC.

Who risks more

It is traditionally believed that the main advantages of an LLC are the limited liability of the company and the property security of the founder himself.

Allegedly, the owner of the company risks only with the authorized capital that was contributed. And given that minimum size UK - only 10,000 rubles, then the risk is small. An individual entrepreneur, in which case, pays with all his property, including those that were not used in business activities.

We quote: “The founder (participant) of a legal entity or the owner of its property is not liable for the obligations of the legal entity, and the legal entity is not liable for the obligations of the founder (participant) or owner, except as provided by this Code or other law.”

Indeed, the imperfection of Russian legislation a few years ago often allowed LLC participants to get away with it, without paying either creditors or the budget. But after the creation of the mechanism of subsidiary liability, this is no longer the case.

The authorized capital in the amount of at least 10,000 rubles should be contributed only by the founders of the LLC, but after all, an entrepreneur cannot start with total absence money for business. The state duty for registering a legal entity is five times higher than for an individual entrepreneur (4,000 rubles instead of 800 rubles). On the one hand, the difference is noticeable, but on the other hand, this is a one-time amount, so it should not matter much when you choose.

But in the future, documentary support for a business in the form of an LLC is more difficult than for an individual entrepreneur. The activities of a limited liability company are regulated by a special law No. 14-FZ of 08.02.1998. Participants must accompany all important decisions with corporate documents, convene meetings, independently report to the Federal Tax Service Inspectorate on all changes in information in the Unified State Register of Legal Entities. The obligation to keep accounting records is also established only for organizations.

But the most important thing is that it is much easier to terminate an IP business than to liquidate an LLC. It is enough for an individual to submit an application and pay a fee of 160 rubles, and after five working days he will be deregistered even if there are tax and contribution debts. And the closure of the company will take several months with the obligatory notification of creditors and the delivery of the balance sheet.

Business Scale

In this case, we mean not a specific business, but the organizational and legal form, and, so to speak, its weight in the market. Of course, there are individual entrepreneurs that have a multi-million dollar turnover, and there are companies that practically do not bring any profit to their owner.

But in general, legal entities are regarded as more solid business participants than individual entrepreneurs. This is also reflected in the laws:

• only organizations are allowed to many licensed activities;
• fines for the same administrative offense for legal entities are many times higher than for individuals.

In addition, an individual entrepreneur simply cannot officially attract new partners or sell his business as an integral structure. Accordingly, the interest of investors in individuals is much lower than in legal entities.

Results

And now, once again, a brief summary of the comparison of IP and LLC.

IP advantages:

• simple registration with the tax office and, if necessary, a quick termination of business;
• you can withdraw income from the business for personal needs at any time and without additional taxation;
• low interest of inspectors and low penalties;
• more tax benefits than legal entities;
• the reporting of the entrepreneur is simpler, there is no need to keep accounting.

LLC advantages:

• it is more difficult to bring the owner of an LLC to property liability than an individual entrepreneur;
• a business or a share in it can be sold, mortgaged, inherited;
• you can attract investors and new partners to the company, which allows you to expand the scale of your business;
• all activities permitted by law are available;
• for some counterparties, the status of an organization is higher than that of an individual entrepreneur, and this matters when concluding transactions.

Still in doubt? Get a free consultation from professional registrars in your region on the issue of choosing between an individual entrepreneur and an LLC.

Hello my dear readers! IN Lately I was often asked questions about the registration of my business or entrepreneurial activity, but basically these questions were related to the registration of an individual entrepreneur (individual entrepreneur), with the advantages and disadvantages of an individual entrepreneur, etc. In questions and answers, I already answered the question, I also wrote an article about, and now we will consider the pros and cons of IP.

When organizing a business, every entrepreneur faces the question of the form in which he will carry out entrepreneurial activities. Currently, there are several forms of entrepreneurial activity. An individual can start his business as an individual entrepreneur (IP), or can create a commercial organization, such as: LLC, OJSC, CJSC, and so on. After all, it is known that it is always easier for legal entities in the conditions of market competition. So, let's focus on individual entrepreneurship. Creating an IP has its pros and cons.

IP advantages

An important positive component of creating an IP is a simplified procedure for registering individuals in the status of individual entrepreneurs, namely: it is necessary to provide the most minimal set of documents and pay the state duty. Another plus is that in order to create an IP, you do not need to have a special building, a room for registering a legal address, it is enough that an individual entrepreneur has a permanent registration in the territory Russian Federation. Also, the advantages of IP include:

• The conditions for conducting accounting are not legally formalized;
• There is a choice of tax regime;
• Freedom in the choice of their actions, and in the disposal of their financial resources. You can withdraw money from your current account at any time;
• Much easier process liquidation;
• Small administrative fines.

Cons of IP

The biggest downside is the obligation of the entrepreneur to bear responsibility for his debts with all available in cash and property.

Russian law prohibits individual entrepreneurs from engaging in activities such as security, banking, production of alcohol. In 2013, payments were increased in Pension Fund Russian Federation, in connection with which, the costs increased. But in 2014, the amounts became smaller.

A sole trader is not entitled to appoint another person as a director to manage his business. All managerial powers are on him alone. An individual entrepreneur is solely responsible for all his actions, profits and losses. Also, an individual entrepreneur cannot sell his business, he can only sell his property, but in practice such cases are rare.

In addition, many firms, when doing business, give preference to legal entities., and IP is often associated with unreliable business.

Another disadvantage in the work of IP is a more complicated procedure for obtaining investments. As a rule, banks issue loans to individual entrepreneurs only after going through a complex solvency assessment procedure, since it is considered that issuing loans to individual entrepreneurs is a big risk.

Conclusion

When creating an IP, there are both positive and negative sides. But, at the same time, you need to understand that an individual entrepreneur who is tuned to a good rhythm of work and making systematic profits will always succeed, despite the pros and cons. individual entrepreneurship.

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What to open LLC or IP

The rapid development of small business in Russia has led to the massive opening of small LLCs and individual entrepreneurs. At the same time, both forms of doing business provide for the possibility of doing business independently. In this regard, at the stage of planning their own business, most novice entrepreneurs ask themselves which is better - an individual entrepreneur or an LLC.

It is quite difficult to answer this question unambiguously, since in each of the options there are both strong and weak sides. The advantages and disadvantages of an LLC are discussed in the article "", but here we will try to understand the pros and cons of an individual entrepreneur.

IP advantages

1. The most important plus of IP, as a form of business organization, is the ease of registration. The whole process takes only 5 working days. Compared to a rather complicated and lengthy procedure, becoming an individual entrepreneur is many times easier. The list of documents required for registration of an individual entrepreneur is limited to a correctly executed passport, a receipt for payment of the fee and a photocopy of the TIN.
2. The cost is very low - even if you use the services of intermediary firms, it will not cost more than 3-4 thousand rubles, and with self-registration - only from 1300 to 1500 rubles.
3. To create an IP, there is no need to form an authorized capital, which also significantly reduces initial costs.
4. An individual entrepreneur (unlike an LLC) does not pay tax on property that he uses in business activities, since this is the property of an individual. Moreover, individual entrepreneurs are generally not required to report on what equipment and by what means they carry out production or other activities, therefore, unlike an LLC, they are not required to legalize it (contribute to the authorized capital, property, etc.).
5. The ability to use the simplified tax system and pay taxes according to a simplified scheme. Moreover, individual entrepreneurs may not keep accounting at all, but be guided by a special “Procedure for accounting for income, expenses and business transactions for individual entrepreneurs”. This allows, with modest volumes of mutual settlements, to abandon the need to hire an accountant and take into account income and expenses on your own using only the Book of Income and Expenses.
6. The resulting profit can be used immediately and at the sole discretion of the entrepreneur. That is, in order to use profits, it is not necessary to wait for its quarterly distribution, as is the case with an LLC.
7. The relatively small amount of fines in the field of entrepreneurial activity that can be imposed on individual entrepreneurs - for LLCs they are much larger.
8. If the planned activity does not necessarily involve the use of a bank account and a seal, then the individual entrepreneur may not open or create his own seal.
9. The procedure for opening your own representative offices does not require changes to the registration data - an individual entrepreneur simply opens additional points of his business under own name. LLC, in such cases, are forced to go through a difficult registration procedure.

Cons of IP

1. The main disadvantage of an individual entrepreneur, as a form of business organization, is that an individual entrepreneur is responsible for all his obligations with his own property. In other words, if you cannot pay off your creditors, then your apartment or car may be taken from you as a payment. This is the main difference between an individual entrepreneur and an LLC, where a member of the company risks only his share in authorized capital and property owned by the LLC.

   It is this minus of IP that is the main reason why many aspiring entrepreneurs prefer not to take risks and formalize their business as an LLC.

2. Even in cases where the IP uses common system taxation (OSNO), he cannot take into account the losses of previous years when calculating the tax base of the current period (and this can be done in an LLC).
3. Even if the individual entrepreneur does not have employees and did not conduct any activity, he is obliged to contribute to the Pension Fund.
4. Sole proprietors cannot engage in either supply or retail alcoholic products.
5. An individual entrepreneur cannot, if necessary, officially attract investors to his business; this will require the creation of an LLC or other legal entity.
6. Large companies are sometimes very reluctant to work with individual entrepreneurs, and if there is an alternative, they opt for an LLC.
7. Difficulties in opening a business for several persons. Even if your comrades participated in the opening of your business, in the event that you want to close it, they will not be able to influence your decision in any way. Everything is fairer in an LLC - serious decisions are made at a meeting of founders by voting.
8. Your last name will always be in the name of your business, which is not convenient for everyone.
9. It is possible to be a representative of an individual entrepreneur only by notarized power of attorney, that is, an individual entrepreneur does not have the opportunity to hire a director in the same way as in an LLC.

Thus, you will have to answer the question: which is better - an individual entrepreneur or an LLC, you will have to do it yourself, taking into account the pros and cons of an individual entrepreneur and an LLC regarding what kind of business you want to run, what are its estimated volumes, whether the implementation will be carried out alcoholic products how much money you are willing to spend on and so on. If you only plan to formalize your own small extra income (for example, you make cakes to order or fix bicycles for 20-30 friends), then individual entrepreneurship is the best fit for this, but if production volumes involve a more mass business, then most likely it will be it is more correct and more convenient to register it as an LLC.

It is recommended to learn about the pros and cons of opening an IP at a startup. This information will help to understand in more detail the advantages and disadvantages of such a form of business organization as individual entrepreneurship and make the right decision, since the entrepreneur’s ignorance often becomes the reason for the closure of an individual entrepreneur in the future. To avoid such an outcome and make sure that the IP is exactly the legal form that is best suited for the implementation of your business ideas, the first step is to familiarize yourself with the material presented below.

The article provides information about what gives the registration of an individual entrepreneur, to whom this form of business organization is most suitable and what advantages and disadvantages it has.

Who is an individual entrepreneur, legal requirements and restrictions

Individual entrepreneurship is a form of organization of activity, maximum suitable for representatives small and medium business. As a rule, IP is registered in the event that further activities does not involve large financial turnover and large investments. Unlike an LLC, an individual entrepreneur does not have the status of a legal entity, however, despite this, the functioning of an individual entrepreneur is regulated by the same articles of civil law as a limited liability company.

IP has the right to:

1. study commercial activities specified during the registration of the enterprise;
2. sell goods;
3. provide various services;
4. engage in production activities;
5. perform work.

According to the legislation, an individual entrepreneur is subject to state registration, the procedure and conditions of which are regulated by special regulatory legal acts. It should be noted that there are a number of activities that do not require registration, therefore, before registering a business, it is recommended to carefully study the USRIP. This classifier contains an exhaustive list of types of business activities that need to be registered. The authority to carry out this procedure has the tax service.

Who can become an IP:

• a capable citizen of the Russian Federation who has reached the age of majority at the time of opening a business;
• an adult foreigner residing on the territory of Russia on legal grounds and having an appropriate work permit;
• a stateless person who meets the established requirements.

Note! The main requirement for individual entrepreneurs is that the latter has full legal capacity, however, the law provides for the possibility of registering individual entrepreneurship by a person under the age of 18. You can become an individual entrepreneur from the age of 16 in such cases:

• marriage. In this case, the basis for acquiring full legal capacity and, accordingly, registering a business is a Marriage Certificate;
• acquisition of full legal capacity on the basis of a court decision;
• the presence of permission of the parents of a minor to conduct entrepreneurial activities.
• the presence of a permit issued by the guardianship and guardianship authority.

• civil servants;
• military;
• citizens who are prohibited from doing business by the court.

IP has a number of advantages, including:

• simple and short registration procedure. To open an IP, you just need to submit a package of documents, namely an application, a copy of your passport and tax number, a receipt for payment of the state fee, and wait for a decision. As a rule, this period does not exceed 5 working days;
• opening an IP does not require large expenses. In the case of self-registration, you will need a maximum of 1500 rubles. If you decide to use the services of intermediaries, it will cost no more than 4 thousand. Compared to the cost of similar services provided by the LLC, these amounts are insignificant;
• no availability requirement authorized capital, print and current account. In the future, the entrepreneur can open an account and order a seal to promote the business, but this is not his obligation;
• An individual entrepreneur is not taxed on the property used to implement business plans, since it belongs to him, and not to the enterprise. Moreover, an individual entrepreneur should not at all notify the regulatory authorities about the presence of such property, whether it be equipment necessary to achieve production goals, or real estate;
• the ability to pay tax under a simplified system. To do this, an appropriate application should be attached to the application with a request to use the simplified tax system in the future;
• independent management of profits. The individual entrepreneur can use the earned funds at his own discretion and at any time;
• small fines, in comparison with LLC;
• opening additional points does not require registration with the tax service.

Along with the advantages, IP also has a number of disadvantages. The disadvantages include:

• in case of non-fulfillment of obligations to creditors, an individual entrepreneur may lose his personal property;
• it is not possible to take into account losses incurred in previous years when calculating the tax base;
• requirement for mandatory monthly payments to the PF. This does not take into account the presence of employees and income. The payment is fixed;
• you can not sell alcohol;
• there is no possibility of officially attracting investors;
• less chance of cooperating with large companies. As a rule, serious businessmen prefer to work with LLC;
• the name of the individual entrepreneur must consist of the last name and first name of the person who registered it;
• To represent an individual entrepreneur, you must have a power of attorney certified by a notary.

After reviewing the above pros and cons of IP, you can make a choice and make a decision that is best suited for the implementation of your business ideas.

Thinking about starting their own business, many aspiring businessmen are inclined to register as an individual entrepreneur. What justifies such a choice, what are the weak and strengths, advantages and disadvantages does IP registration have? How correct is this decision and which of the future entrepreneurs is best suited for this organizational and legal form? Let's try to understand this issue in detail.

IP advantages

1. The undoubted advantages of IP include simple registration. In order to register with the tax authority as an individual entrepreneur, only three documents are enough: a passport and its copy, and. The state duty is only 800 rubles, and you can apply for registration of an individual entrepreneur via the Internet, which further simplifies the procedure.
2. There is no strict need to open a bank account, purchase a seal, keep cash registers. At the same time, payments can be made in cash, and strict reporting forms can be used as supporting documents.
3. You do not need to have funds to contribute to the authorized capital.
4. An individual entrepreneur is not required to document all his internal and external actions related to the activities of the enterprise.
5. The individual entrepreneur has the right to independently and solely make all decisions regarding the current conduct of business and its prospects.
6. There is no need to maintain strict internal and external accounting and keep an accountant on staff. Individual entrepreneurs have minimal reporting, it is enough to submit a declaration to the tax authorities only once a year, so you can use accounting services outsourced.
7. IP is entitled to free use financial resources. Regardless of the size of the amount and the purpose of its spending, an individual entrepreneur has the right to withdraw it from the cash desk at any time or withdraw it from the current account, if any. All working capital IP is considered his property.
8. The sole proprietorship has a lower tax burden. For example, an individual entrepreneur does not need to add any equipment or property to the balance sheet, which means that there is no need to pay property tax either.
9. With practically equal rights with legal entities, the amount of fines and liability for individual entrepreneurs in case of any administrative violations is much lower than for enterprises of other organizational and legal forms.
10. With the timely payment of contributions to the pension fund, an individual entrepreneur can offset the entire amount of insurance payments and thereby significantly reduce the tax for the past.
11. More rare inspections by tax and other regulatory authorities. In general, as practice shows, even the courts and law enforcement agencies are more loyal to individual entrepreneurs than to other organizations.
12. Opening representative offices in other cities and regions does not require changes to registration data. For an individual entrepreneur, it is enough just to open a new “point” under his own name.
13. The possibility of a patent system of taxation. This special tax regime, allowed only for individual entrepreneurs, allows you to minimize tax expenses compared to enterprises and organizations.
14. Easy liquidation process. If there are no debts, to close an IP, it is enough to pay an almost symbolic state duty and submit an appropriate application to the tax authority.

Cons of IP

1. The biggest and unconditional minus of an individual entrepreneur can be called the fact that in the event of debts from an individual entrepreneur to credit institutions, tax authorities or counterparties, he will have to answer with all his personal property.
2. is not a basis for writing off existing debts. As a rule, when unsolvable debt obligations arise on the part of individual entrepreneurs, creditors go to court and seek repayment of debts through bailiffs. Read more about closing an IP with debts.
3. Sufficiently large restrictions on possible activities. For example, an individual entrepreneur cannot be engaged in banking, investments, pawnshops, security business, and also be a tour operator (with the exception of travel agencies, which are, in fact, intermediary organizations). In addition, an individual entrepreneur does not have the right to engage in the production of military, alcoholic and pharmaceutical products.
4. The inability to sell, buy or re-register IP.
5. The need for reporting at the place of registration of the individual entrepreneur, that is, in fact, at the place of his residence.
6. The inability to expand the business through additional investments from third parties or the introduction of co-founders.
7. The need for self-managed business. Management functions can be delegated only through a notarized power of attorney.
8. The inability to take into account losses for past unsuccessful periods when calculating the current tax base.
9. Mandatory to the Pension Fund, even in cases where the activities of an individual entrepreneur are suspended or instead of profits, they cause losses.
10. A small degree of trust major representatives businesses and potential investors.

A little about taxes

The issue of tax payments is one of the most important when choosing the organizational and legal form of the future enterprise. Individual entrepreneurs can choose one of the following types of taxation:

Speaking of which! In case of temporary termination of work as an individual entrepreneur, it is better for a merchant to switch to OSN. True, it should be remembered that, under no circumstances, an individual entrepreneur can not be exempted from paying fixed mandatory payments to the pension fund.

What do we end up with

As can be seen from all of the above, the arguments "for" and "against" the registration of IP are approximately equal. However, it can be unequivocally said that if it is planned to open small business to provide small services to the population, it is better to register as individual entrepreneur. Well, if there are big plans for expanding and growing your business, then it is worth considering other organizational and legal forms of enterprises and organizations.