The business is almost ready. There is the most necessary - calculations, a business plan, the premises are looked after. There is very little left to decide in what form the business will begin to exist.
The main task of every businessman is to make a profit and increase it. Depending on what kind of income you want to achieve, a form of activity will be chosen.
Having come to the idea that it is necessary to start a business, a potential entrepreneur is faced with a question related to the choice of the legal form of a favorite business.
This choice is determined by a combination of subjective factors affecting the entrepreneur, and objective reality.
Concept of form
Under the legal form it is customary to understand the method of use and consolidation of property by a business entity and the legal status, as well as the goals of the activities that arise from this.
The right choice of the form of enterprise gives the founders additional tools that allow you to rapidly grow your business.
Most often, registration of an individual entrepreneur occurs (stands for organizational form “individual entrepreneur”). In addition, limited liability companies (LLC), closed joint-stock companies (CJSC) are registered . Each of the forms has its own advantages and disadvantages, which you need to know about before the stage of business registration.
Individual Entrepreneurship
The legal form of an individual entrepreneur is most often chosen for small business registration. Most often, the activities are related to retail trade, catering, as well as services that are provided to the population. Such a choice is made due to the fact that IP is given greater freedom in the issue of handling cash. Accounting for this form is very simple: it does not require the hiring of qualified personnel and in-depth knowledge in this area. However, in the event of a burnout or bankruptcy of a business, the entrepreneur will be liable with all the property that he has.
FE features
The legal form of an individual entrepreneur (PBUYL or PE until 2005) - involves the registration of an individual as an entrepreneur. In this case, the legal entity does not open. Such businessmen use the rules of the Civil Code) that govern the actions of legal entities or legal acts (respectively, Article 23 of the Civil Code). Due to some limitations in legal matters, the real form of business organization is almost always small or micro-business.
Doing Business
Before registration, the owner thinks about the form of "individual entrepreneur". Which legal form is good, optimal, what should I focus on in my choice?
The term “entrepreneurial activity” itself is the exercise of independent activity at your own risk, which is aimed at obtaining regular profits from the use of property, the performance of work, the sale of goods or the offer of services. The key point is “regularity”. A one-time sale or service provided can be provided without IP. However, the legislation does not have a precise wording, which is considered “regularity”. Without registration, it is only possible to receive income from renting your home.
Responsibility
For the fact that the activity is carried out without registration with state bodies, a fine is imposed. Its sizes reach up to 300,000 rubles. or an amount equal to the amount of wages or other income for the period, which may be equal to two years. Also, punishment can be equated to practicing compulsory work. The term lasts from 180 hours to 240. An arrest of up to six months can also be applied.
The legal form of the enterprise is “individual entrepreneur” in the event of an income of more than one and a half million rubles. (is a particularly large size) involves liability in the form of punishment:
- fine, the amount of which starts with 100,000 rubles. up to 500 000 rubles .;
- a fine in the amount of any income or wages for a time interval from a year to three;
- imprisonment of up to five years with an additional fine, the amount of which is equal to the amount of up to eighty thousand rubles .;
- up to five years in prison with or without an additional fine.
For obligations, transactions, contracts, an entrepreneur who does not have a registration is fully responsible. The reference to the lack of registration is not a mitigating factor.
Fines
The legal form of an individual entrepreneur is duties, rights, responsibilities, the performance or non-fulfillment of which entails a punishment.
If the amount is not reached in order to start a criminal case, then a fine will be imposed. Incomplete payment or non-payment of the entire fee (tax) in case of understating the tax base, incorrect tax calculation or other illegal actions are punishable by a fine, which is equal to 20% of the unpaid tax.
OKOPF code
The code of the legal form of an individual entrepreneur is indicated in the classifier.
The abbreviation OKOPF is the All-Russian classifier of legal forms. This code is required in order to:
- there was an opportunity to generate information resources that contain information about business entities;
- Analytical tasks of statistics, economics and taxation related to the disposal of property and property management were solved;
- predicted and analyzed socio-economic processes;
- recommendations on economic regulation were developed.
The code itself is composed of 5 digits. For example, for forms of entrepreneurship, the following codes apply:
- LLC (code 1 23 00);
- non-public joint-stock companies (code 1 22 67);
- PAO (code 1 22 47).
- individual entrepreneurs (code 5 01 02).
Code Definition
The legal form of an individual entrepreneur, CJSC or LLC is embedded in the classifier code.
To determine the code, you need to understand what each digit means.
- The first is a section.
- The second and third digits are responsible for a certain type of legal form; and the fourth - for the appearance of a specific legal form.
In order to see the code, you need to use the classifier in the classifier system or call the services of consultants.
Limitations
The legal form “individual entrepreneur” does not have at its disposal restrictions on geography in the Russian Federation or on the number of points. There is also no dependence on the place of registration. There are no restrictions on business income either.
Employees of the FSS and PFR, the tax, the FSB, the Ministry of Internal Affairs, officials, rectors, and school principals cannot be individual entrepreneurs.
Public sector employees who do not have special powers can be individual entrepreneurs (doctors, teachers).
Pros and cons
The legal form of an individual entrepreneur (for example, private shops, etc.) has both its advantages and disadvantages.
An entrepreneur who does not form a legal entity, among the advantages, has:
- a simple procedure for registering a business, as well as termination of activity;
- a small list of documents required for the procedure;
- a simple reporting form, a small list of taxes;
- lack of accounting: IP keeps only a book of costs and revenues, and still provide a quarterly report on expenses and income.
It is very important to make the right choice of legal form. The status of an individual entrepreneur obliges one to understand what shortcomings a business may have in the chosen form.
Among the minuses of IP noted:
- responsibility on all issues with his property as a whole;
- the inability to distribute responsibility for obligations that arose as a result of activities between the founders;
- difficulties in attracting investors due to lack of shares or shares;
- difficulties with selling the business, since he can only sell personal property in the form of assets;
- inheritance of the business involves a lot of paperwork.
The legal form of ownership “individual entrepreneur” is convenient for the founder of the business, but often legal entities do not want to work with private entrepreneurs, preferring a more substantial ZAO or LLC to them.
Distinctive features
The type of business is popular as an individual entrepreneur, the legal form is not only simple, but also easy to draw up. But the owner must know what the differences between the IP and other persons are.
For registration of this form a state duty is levied five times less than when organizing a legal entity. Also, the charter and any authorized capital are not needed. Unfortunately, it is impossible to appoint a full-fledged director of an enterprise in this form of activity. An entrepreneur is an individual, not an organization.
The individual entrepreneur does not deal with cash, he can dispose of funds in the account at his discretion. Economic decisions are made without entering into the protocol.
Registration of a business is done only by itself; registration of several founders is impossible. This business cannot be sold or reissued.
Employees employed in individual entrepreneurs have few rights.
Who can arrange a business
A business can be organized in such a legal form :
- capable adult citizens of the Russian Federation;
- minor citizens with the permission of the trustees or parents;
- citizens of another country who live in the territory of the Russian Federation;
- citizens of 16 years who have married or by a special body recognized as having legal capacity.
Registration procedure
For registration you need:
- a single copy of the state registration of the IP;
- copy of individual taxpayer number;
- Form P21001, completed by the tax authority;
- copies of passport and registration;
- receipt of duty payment.
Within five days, registration takes place or the entrepreneur receives a reasoned refusal.
In case of confirmation of the procedure, the following is issued:
- certificate of registration as an individual entrepreneur;
- extract from the USRIP (state register containing the list of IP).
The cost of this procedure will be about 2,000 rubles. You need to pay 800 rubles. duties and about 1,000 or 1,500 rubles. for the services of a notary, but only when his services are needed. You can also come to the authorities yourself, it’s completely free.
In the future, activities will be accompanied by the payment of taxes and the submission of minimum reporting. Recalls the deadlines for submitting documents to authorities can online services that provide services on a free or paid basis.