Often, people who have opened their own business cannot clearly understand the new legal status for themselves. 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. The Civil Code of the Russian Federation, without reservation, calls any individual entrepreneur an individual. 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.
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.
Already from these two short definitions, we can conclude what 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 are prohibited from interacting with individual entrepreneurs. 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. The undoubted advantage of 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.
The Civil Code of the Russian Federation and other legislative acts give a clear definition of the concepts of a legal entity and an individual entrepreneur. They have their own characteristics.
Main similarities and differences
To understand the difference between the concepts of an individual entrepreneur and a legal entity, you need to understand the legal nature of these definitions.
Under IP means an individual who carries out his activities independently and on his own behalf, as well as duly registered.
Entity- an organization that has separate property and is independently responsible for its obligations.
These two concepts are united only by the fact that both conduct business activities, but they are different in the registration procedure, structure, taxation and other legal aspects.
Individual entrepreneurs are registered under the full name and at the place of residence, and the legal entity also has a legal address, which is indicated during the registration process.
The main difference between an individual entrepreneur and a legal entity is that the latter has the Constituent documents or the Charter, within the framework of which it operates. Any changes must be made without fail. An individual entrepreneur, on the other hand, has a freer form of business, changing which does not require a procedure for revising the Charter.
The disadvantages of the IP business system in comparison with the legal entity include:
- limited types of activities (license), for example, the first one cannot be engaged in both retail and wholesale sales of alcoholic beverages, medicines, etc.;
- personal participation of an individual is required; no one has the right to represent the interests of an individual entrepreneur.
The status of a legal entity implies the presence of an executive body that is actually involved in the management and activities of the organization. A sole proprietorship is managed by the individual who created it.
The address (place) of location of a legal entity is recognized legal address specified in the registration documents(often occurs when the specified address does not match the real location of the company). Registration of the location of an individual entrepreneur is carried out at the place of residence of an individual or at the place of his stay.
The reorganization of the business of an individual entrepreneur in comparison with a legal entity also has a range of benefits. To change the necessary data, you must provide an application and a document (its copy) confirming their change.
Rights of a legal entity
Any participant in legal relations has a set of rights and obligations. Legal entities have civil rights that correspond to the goals of their activities. This set of rights is spelled out in the Charter document. Restriction in legal capacity can only be by law.
Status of an individual
A natural person is a citizen with corresponding rights and obligations. He acquires them from the moment of birth and uses them all his life. One of these rights is, after which laws are applied to the citizen regarding the activities of an individual entrepreneur, as well as any others relating to individuals separately.
Why there is confusion in terms
Firstly, from the definition of an individual entrepreneur it is already clear that this is an individual who is responsible for his obligations on his own. That is, everything is assigned to a certain person, which cannot be said about a legal entity, where the firm bears all responsibility. The confusion is due to the fact that the IP has the same attributes as a legal entity, namely, a seal, a current account, etc.
Cases when an individual entrepreneur acts as a legal entity
Despite the obvious differences between the two concepts, there are options in which the actions of an individual entrepreneur are similar to a legal entity. Such cases include:
- Hiring workers.
- Opening bank accounts and using them for business purposes.
- The use of seals to authenticate documents.
Advantages and disadvantages
The advantage of an LLC is that none of the founders bears the full liability for the company's obligations. For example, compensation for losses is determined in the amount of the share contributed by the founder to the authorized capital of the company.
If the LLC is declared bankrupt, the recovery of debt obligations is applied only to the property contributed by the founder to the fund of the company.
Sole Proprietor as a person directly engaged in business, fully responsible for all debts formed during the working period. At the same time, debt collections are levied on all property belonging to the individual entrepreneur, with the exception of property that is not subject to arrest and circulation to pay off the debt.
In addition to all of the above, an individual has the right to bequeath all his property to another person.
In daily activities, individual entrepreneurs and LLCs can use various tax regimes. First of all, this is a general taxation system, which is mainly used by enterprises due to the large turnover. Also, individual entrepreneurs use other special taxation regimes: simplified, imputed, patent.
Any of the above systems implies taxation on profits received as a result of economic activity.
In addition, businesses are required to pay other additional taxes and fees depending on the type of activity. Among them are:
- gambling tax;
- tax related to excisable goods;
- fee for the use of subsoil;
- fee for the use of objects of flora and fauna, etc.
Enterprises pay additional taxes and insurance premiums from the wages of employees.
A tax withheld from an employee's wages is income tax. For citizens of the Russian Federation, the rate is 13%, for foreigners - 30%.
Insurance premiums are divided into the following types:
- pension fund (PFR);
- compulsory medical insurance fund (FMS);
- social insurance fund (FSS).
The contribution rate is 22%, 5.1% and 2.9% respectively.
An individual, when using the general taxation system, pays:
- business income tax;
- property tax if it is used in business;
- value added tax.
Also, an individual pays other mandatory contributions: health insurance, pension fund, insurance fund.
The legislative framework
At the legislative level, registration is regulated by the Federal Law "On State Registration of Legal Entities and Individual Entrepreneurs", the Civil Code, decrees of the Government of the Russian Federation, and other regulatory legal acts.
Learn more about LLC and IP in this video.
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 of Ancient Rome. But the practical application of this concept, and this, as it is called "institute of law" began relatively recently. The birthplace of the modern understanding of the 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 a legal entity is also reflected in Russian legislation. The modern understanding of the term “legal entity” for the new Russia 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 the 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 that is 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. Given that the vast majority of legal entities in Russia are registered with a minimum authorized capital of 10,000 rubles, then this issue is quite relevant.
Banks that issue loans and companies that have qualified lawyers on staff, in order to avoid the possibility of non-repayment of loans or other consequences of non-fulfillment of obligations, a necessary condition for concluding contracts (for the provision of loans, loans, for example) put 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 about administrative legislation, then its norms operate 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 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 according to organizational and 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. The key point in this situation is that such services (works) are performed by an individual on a one-time basis - such activities are not systematic, permanent, in 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 the 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.
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 |
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 |
|
|
|
|
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. At the same time, there are pros and cons of choosing one form or another of doing business. 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 termination procedure.
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 yourself", 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 to submit statistical reports, 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 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 construction is associated with very large investments by 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.
Even more materials on the topic in the heading: "IP".
