Citizens who have decided to develop their own business should know their rights and obligations to the state. For this reason, it is necessary to pay attention to the status of an individual entrepreneur. This information will help to more clearly understand what an individual entrepreneur can count on and what responsibilities are assigned to him by law.
Who is an IP
It is wrong to think that an individual entrepreneur is a legal entity. Individual status can be obtained only by individuals - the law in this case does not provide alternatives. On the other hand, this means that almost any citizen, with rare exceptions, can start a business.
For the legal status of an individual entrepreneur, the norms of the law are relevant, which apply to both the business sphere and individuals. This simultaneously increases the level of freedom and increases the degree of responsibility.
A citizen with such a status not only receives special rights, but also assumes certain obligations. We are talking about paying taxes, as well as fees and contributions to extrabudgetary funds.
In most cases, the actions of IP are evaluated as the activity of an individual. For example, when using cars for commercial purposes, he does not need to pay taxes as a legal entity. The main thing is to follow the established procedure.
Who can not do business
An individual entrepreneur certificate is available to most citizens. There are several groups of people who have no reason to expect to receive it:
- Foreigners and stateless persons. We are talking about those who are in the country, without legal grounds for this.
- Deprived of the right to do business. The reason for this restriction is a court decision, provided that the ban has not expired.
- Citizens who had a criminal record. This also includes people who were previously prosecuted for committing criminal acts that block the possibility of registering a business. For example, those convicted of murder will not be able to open children's institutions.
- Citizens who registered IP earlier.
- Law enforcement officers, military and civil servants.
- Those citizens whose business was forcibly closed. The rule is valid provided that less than 12 months have passed since the court decision entered into force.
On the basis of what acts IP
According to the law on legal entities and individual entrepreneurs, any individual who intends to open his own business must undergo a specific procedure. It's about registration. Without this process, any trade or service provision would be considered illegal.
After a citizen submits an application for registration of an individual entrepreneur, the specified data and possible obstacles are checked (court decisions, etc.). If the documents are in order and there are no prohibitions, the applicant receives a certificate.
After the successful completion of the process, according to the Federal Law No. 129 "On State Registration of Legal Entities and Individual Entrepreneurs", the applicant will be assigned a specific number - OGRIP. It is recorded in the Unified State Register.
IP also receives an individual tax number.
Before registering, an entrepreneur should check whether a license is required for the selected type of activity. If so, then it will definitely need to be purchased.
When they can refuse registration
Federal Law No. 129 "On State Registration of Legal Entities and Individual Entrepreneurs" gives a clear understanding of the reasons for rejecting the application. It makes sense to pay attention to some of them:
- Documents were sent to the wrong registration authority.
- After submitting the application or before this action, a court decision came into force, on the basis of which a specific individual is prohibited from conducting entrepreneurial activities.
- The specified information on the document confirming the identity of the applicant does not correspond to real data.
- If the manager of the legal entity intends to register the IP, but in his name there is a decision on an administrative offense that has entered into force. When the result of such a decision is the disqualification of the head, and its term has not expired, obtaining a certificate of individual entrepreneur will not work.
Registration of minors
Those under the age of 18 can also start their own business.
In addition to the application for registration of IP, they will be required to meet certain conditions:
- The court or guardianship authorities, they must be recognized as fully capable.
- Both parents, guardians or adoptive parents are not against such his actions.
- Enter into legal marriage. In this case, there will be no problems with the registration of activities. After the dissolution of the marriage relationship, the status of a competent remains.
Regardless of the fulfillment of these requirements, those who have not yet reached the age of 14 will not be able to obtain IP status. This restriction is due to the fact that the law prohibits persons under this age from entering into transactions related to commercial activities.
Responsibility
One of the features of the legal status of an individual entrepreneur is acting as an individual. This means that under all economic contracts such a citizen will be liable with his property. This line of law can be especially painful if bankruptcy proceedings begin.
When an enterprise ceases to operate, property and capital, which is on the balance sheet of a legal entity, are used as resources for paying off debts. And the status of an individual entrepreneur will oblige the latter to provide all that he has to pay off the debt.
More specifically, individuals engaged in business, with an unsuccessful result of their activities, may lose the following:
- Appliances;
- family savings;
- securities;
- personal transport;
- luxuries;
- real estate (exception - the only living space).
You can learn more about what property falls into the category of exceptions by studying article 446 of the Code of Civil Procedure of the Russian Federation.
To protect at least part of their property from possible seizure, it is worth concluding a marriage contract.
What do not pick up when collecting debt
An individual as an individual entrepreneur carrying out any activity is liable with his property for existing obligations. But at the same time there is property, which in case of debt collection is not subject to seizure:
- Shoes, clothes, as well as personal items and household items. Jewelry and other things to which luxury status applies do not fall into this category.
- Residential premises, shares and land where this real estate is located.
- Property that is necessary based on the assignment of an invalid group to an entrepreneur. It can be transport and any necessary items.
- Fuel. Not seized when used for cooking or heating a living room.
- Commemorative and honorary signs, prizes and state awards received personally by SP.
- Seeds needed for the upcoming sowing.
- Property without which the implementation of entrepreneurial activity will become impossible.
- Food and cash, provided that their total amount does not exceed the cost of living of the individual and his dependents.
- Breeding animals, as well as food necessary for their maintenance. This rule applies regardless of whether they are used in business or not.
Thus, if a businessman is listed in the state register of individual entrepreneurs, he has the right to leave the property mentioned above in case of debt collection.
Further, we will talk about the pros and cons of the status in question.
What are the benefits of being an individual entrepreneur?
This form of conducting your own business has positive aspects.
These include:
- Taxation and accounting. The data capture system of the IP is simple and does not require significant effort. There is no need to hire an accountant either. With regard to specific areas of taxation, entrepreneurs can choose the most convenient option among several available: UTII, USN, OCH or the patent system.
- Simple registration process. For registration of the business 3 days will be enough. The list of necessary documents is limited to a photocopy of the passport, a certificate confirming payment of the state duty, and an application in the form of P21001. As for the fee, its size is 800 rubles. The status of an individual entrepreneur is available to any citizen who is over 16 years old.
- Labor Relations. An individual entrepreneur can hire any number of specialists. The main thing is for an entrepreneur to be registered with extrabudgetary funds (as an employer). A representative of a small business is not required to have a seal, like a current account. Reception of funds can be carried out using the forms of strict reporting and cash registers. The amount of IP administrative fines is significantly lower than that of legal entities, as well as the procedure for closing a business is much simpler.
- Revenues. An entrepreneur can spend all the money that a business brings him. There is no need to document each operation and make additional contributions to the state.
Cons IP
The main disadvantage of this form of taxation comes down to the amount of responsibility of the businessman. Against the background of simplification of key processes, an entrepreneur is faced with the need to respond with all his property in case of failures in business processes.
In addition, there are other disadvantages that you should know about:
- Customer loyalty. According to statistics, a large part of the population of the Russian Federation trusts companies more than representatives of small businesses. For IP, this problem is not global, since the trust rating can be increased by creating your own branding. When people have to deal with a brand, albeit locally, they often make the decision in favor of the purchase. That is, to overcome mistrust, an entrepreneur should develop his own branding and, if possible, create a trademark.
- Limitations Features of the status of an individual entrepreneur include a ban on participation in certain areas: lending, insurance, production of medicines and alcohol, activities in the field of personal protection, work with psychotropic substances, etc. Exceptions are possible. Look for information about them in the industry federal legislation. As for the regional authorities, they do not have the right to limit the activities of individual entrepreneurs.
In addition, legal entities periodically refuse to cooperate with entrepreneurs. This is explained by the complexity of payment and return of VAT in such an interaction.
Advocacy in court
The course of action depends a lot on which sphere the rights were infringed on. If the businessman suffered as a citizen, then he needs to appeal to the courts of general jurisdiction. When the problem relates specifically to entrepreneurial activity, the choice must be made in favor of the arbitration court.
Thus, in any negative situation, it is important to understand which category of rights it relates to. At the same time, it is important not to forget about a simple rule: it is prohibited by law to conduct commercial or industrial activities without registration.
Protecting your interests, it is worth using not only federal legislation, but also those acts that have been adopted at the local level. The latter often determine in more detail the facets of the law on legal entities and individual entrepreneurs.
Completion of activities
Initially, an entrepreneur has the right to terminate his status. Here's what you need to do to officially abandon your activities:
- to write an application;
- provide a receipt for payment of state duty;
- file a declaration with the National Assembly for the last reporting period;
- inform extrabudgetary funds of the completion of business activities.
After that, employees of the Federal Tax Service will put an appropriate mark in the Unified Register.
Summary
IP status allows a citizen to carry out entrepreneurial activities, hire employees and keep simple accounting records that do not require the participation of a separate specialist. At the same time, small business representatives risk all their property in case of default on debt obligations.