Entrepreneurship is considered to be the main driving force of a market economy. The realization of one's own interests, which in the overwhelming majority of cases are regular income generation and greater freedom of action, involves not only hard work, but also many formalities. The entrepreneur is at the same time the owner of the business, and often the manager, accountant, lawyer, manager. And at first it can be quite difficult to understand many of the nuances.
SPD and other forms of economic activity
The subject of entrepreneurial activity (SPD) is a legal concept denoting a form of economic activity that combines several types of entrepreneurship. The term is applied in the legislation of Ukraine. In the Russian Federation, the concept of “subject of entrepreneurial activity” is not enshrined in law (the law distinguishes separately private entrepreneurs and legal entities), but is found in legal literature.
In the legal field of Ukraine, there are also two forms of SPD - individual entrepreneurship and legal entities. The second category of business entities includes private and public joint-stock companies, a limited liability company, limited and full company.
Most often, an entrepreneur opens SPD-FL (SPD-FLP), which stands for “subject of entrepreneurial activity - an individual (individual entrepreneur)”, or FOP - “physical person” from the Ukrainian language. It is this form of SPD that will be considered in this material.
Who is eligible to become an entrepreneur?
Legally capable persons who are citizens of Ukraine, other states or stateless persons can officially register as an individual entrepreneur. At the same time, a potential SPD must be legally located in Ukraine, be of legal age (for persons from 16 to 18 years old, permission of parents or legal guardians is additionally required), be registered at the place of residence and receive an identification number.
Current legislation does not allow everyone to engage in business activities. Registration may be denied to those who are already registered in the Unified State Register, provided an incomplete set or false documents, if there is a court decision to prohibit doing business, or if a person is not allowed to engage in business activities under the law. The last category includes:
legally incompetent citizens;
employees of the state apparatus or local governments, deputies;
prosecutors, notaries, auditors;
officials of the courts, internal affairs, state security, prosecutors.
What are the responsibilities of a business entity?
The SPD system is associated not only with the receipt of systematic income, self-government and freedom to carry out activities, but also with a number of responsibilities. So, a private entrepreneur must:
inform the appropriate authorities of any changes to the information specified in personal documents;
ensure the high quality of goods and services provided, preserve the rights and interests of the consumer;
not allow violations of applicable law;
adhere to sanitary requirements, observe fire safety;
keep records of business results and timely submit reports to tax and other authorities.
Entrepreneur State Registration Procedure
SPD is a form of business activity that is subject to mandatory registration. The procedure involves several stages, involves some tedious formalities, but with a responsible approach and the desire to register, you can five days.
Registration of SPD provides for the payment of the registration fee, the provision of a package of documents and applications to the registration authorities, registration as a taxpayer and in a pension fund. Additional procedures (obtaining a license, making a seal, opening an entrepreneurial account in a bank, etc.) are performed by a private entrepreneur, if necessary.
What documents are needed to register as an SPD?
To the state registration authorities, local administration or a notary public, a potential FOP in person or through an authorized person must provide:
registration card, which can be obtained (along with a sample form) from the registrar;
certificate of assignment of an identification code to an individual;
passport of a person who wants to become an entrepreneur.
By law, the registrar is prohibited from requiring other securities from a potential FOP. It is important that the package of documents must be completed in the state language and provided at the place of residence of the future entrepreneur.
The package of documents is minimal - it is not difficult to open an SPD. The conditions for conducting business activities are maximally facilitated, but this does not mean at all that the process of registration and subsequent activities should be referred to as “through the sleeves”.
Taxation system for an individual entrepreneur
The SPD tax is most often single, i.e. on a simplified tax system. The only limitation is that such a system cannot be used by individuals non-residents of Ukraine.
Single tax payers are divided into three groups according to income for a calendar year, number of employees, rate, form of accounting, frequency of reporting (annual or quarterly) and registration by a VAT payer. Below are the main indicators for choosing a group by an entrepreneur.
Registration with the pension fund of Ukraine
Register SPD (transcript - a business entity) can in the city or district branch of the pension fund. The following documents will need to be provided:
a copy of the state registration certificate of a business entity certified by a notary;
certificate with the number assigned to the entrepreneur in the state register of private entrepreneurs - individuals.
Over the next ten business days, the entrepreneur will receive a statement from the pension fund with an identification number, which should be indicated in the future when reporting.
Printing and bank account: are they necessary?
An entrepreneurial bank account and seal are not required for SPD-FOP (SPD-FL, SPD-FLP), but are necessary in some cases. Printing is mandatory only for VAT payers, a bank account is opened only for the convenience of the entrepreneur in the process of carrying out activities, for example, if a SPD network is organized.
Who needs VAT status?
The status of a VAT payer must be obtained by an individual entrepreneur who:
receives a total income of over 300 thousand hryvnias for the last twelve calendar months;
sells confiscated property;
Delivers goods using global networks;
is an importer of goods;
expresses a voluntary desire to become a VAT payer.
The main advantage of the VAT payer is that such entrepreneurs have the opportunity to reduce the cost of doing business by obtaining a tax credit for value added tax paid as part of the full value of the goods.
Do I need a license to carry out business activities?
Private entrepreneurs can not engage in certain types of activities, and for certain areas there are restrictions expressed in the need to obtain a license.
Individual entrepreneurs do not have the right to engage in the following types of economic activity:
protection of individual facilities;
distribution and circulation of narcotic substances;
the manufacture of gasoline, oils;
insurance activity;
banking activities;
issue of securities;
organization of radio and television broadcasting.
The SPD form requires a license to carry out trading activities, exchange values, provide services in the field of gambling and gambling business in general, as well as some other types of activities.
The process of closing a business entity
The process of closing the SPD is the opposite of registering, and involves almost the same steps. In order to liquidate entrepreneurship, a business entity must submit a corresponding application to the state registrar and pass a check for the absence of debt obligations in the tax and pension funds. If a bank account has been opened or any other agreements (Internet, utility bills, etc.) have been entered into, their effect should also be terminated in order to avoid charging fines.