Legal status of an individual entrepreneur. Federal Law No. 129-FZ of 08.08.2001 "On State Registration of Legal Entities and Individual Entrepreneurs"

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

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 duties are assigned to him by law.

Who is IP

It is wrong to think that an individual entrepreneur is a legal entity. The status of an individual entrepreneur can only be obtained 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 their own business.

For the legal status of an individual entrepreneur, the norms of the law are relevant, which relate to both the business sector and individuals. This simultaneously increaseslevel of freedom and increased responsibility.

A citizen with this status not only receives special rights, but also assumes certain obligations. We are talking about the payment of taxes, as well as fees and contributions to off-budget funds.

In most cases, the actions of an individual entrepreneur are assessed 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 order of actions.

Who can't do business

Certificate of an individual entrepreneur is available to most citizens. There are several groups of people who have no reason to expect to receive it:

• Foreigners and stateless people. We are talking about those who are in the country without legal grounds to do so.
• Deprived of the right to conduct business. The reason for such a restriction is a court decision, provided that the period of the ban has not expired.
• Citizens who had a criminal record. This also includes people who have previously been prosecuted for committing criminal acts that block the possibility of registering a business. For example, those who were convicted of murder will not be able to open children's institutions.
• Citizens who registered IP earlier.
• Law enforcement, military and public service.
• Those citizens whose business was forced to close. The rule is valid on the condition that less than 12 months have passed since the judgment entered into force.

Based onwhat IP works

According to the law on legal entities and individual entrepreneurs, any natural person who intends to open his own business must go through a specific procedure. It's about registration. Without this process, any trade or provision of services will be considered illegal.

After a citizen submits an application for registration of an individual entrepreneur, the specified data and possible obstacles (court decisions, etc.) are checked. If the documents are in order and there are no prohibitions, the applicant receives a certificate.

After the successful completion of the process, in accordance with Federal Law No. 129 "On State Registration of Legal Entities and Individual Entrepreneurs", the applicant will be assigned a specific number - OGRNIP. It is recorded in the Unified State Register.

Also, an individual entrepreneur receives an individual tax number.

Before registering, an entrepreneur should check whether a license is required for the selected type of activity. If yes, then it will definitely need to be purchased.

When registration can be denied

FZ 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 the filing of the application or before this action, a court decision came into force, on the basis of which a particular physic althe person is prohibited from doing business.
• The specified information about the document confirming the identity of the applicant does not correspond to the real data.
• If the manager of a legal entity intends to register an individual entrepreneur, 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, it will not work to obtain an IP certificate.

Registration of minors

Those under 18 can also start their own business.

In addition to the application for registration of individual entrepreneurs, they will be required to meet certain conditions:

• They must be recognized by the court or guardianship authorities as fully able-bodied.
• Both parents, guardian or adoptive parent are not against his actions.
• Enter into legal marriage. In this case, there will be no problems with registration of activities. After the dissolution of marital relations, the status of legal capacity remains.

Regardless of meeting these requirements, those under 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 the action as an individual. This means that for all economicunder agreements, such a citizen will bear responsibility with his property. This facet of the 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 to pay off debts. And the status of an individual entrepreneur will oblige the latter to provide everything that he has to pay off the debt.

More specifically, individuals doing business, if the outcome of their activities is unsuccessful, may lose the following:

• household appliances;
• family savings;
• securities;
• personal transport;
• luxury items;
• property (the exception is 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 your property from possible seizure, it is worth signing a marriage contract.

What will not be taken away when collecting debts

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 that is not subject to seizure in the event of debt collection:

• Shoes, clothing, and personal and household items. Jewelry and other things to which the status of luxury is applicable are not included in this category.hit.
• Residential premises, shares and land plots where this real estate is located.
• Property that is necessary on the basis of assigning a disabled group to an entrepreneur. It can be transport and any necessary items.
• Fuel. Not removed when used for cooking or home heating.
• Commemorative and honorary signs, prizes and state awards received personally by IP.
• Seeds needed for the upcoming planting.
• Property, without which business activities will become impossible.
• Food and cash, provided that their total amount does not exceed the subsistence level of the individual entrepreneur and his dependents.
• Pedigree animals, as well as the food necessary for their maintenance. This rule applies 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.

Next, we will talk about the pros and cons of the status in question.

What are the benefits of becoming an individual entrepreneur

This form of running your own business has positive aspects.

These include:

• Taxation and accounting. The system for fixing data in IP is simple and does not require significant effort. accountant toono need to hire. As for specific areas of taxation, entrepreneurs can choose the most convenient option among several available: UTII, STS, DOS or patent system.
• Easy registration process. It will take 3 days to process your case. The list of required documents is limited to a photocopy of the passport, a certificate confirming the payment of the state duty, and an application in the form P21001. As for the fee, its size is 800 rubles. The status of an individual entrepreneur is available to any citizen who is 16 years of age or older.
• Labour relations. An individual entrepreneur can hire any number of specialists. The main thing is that the entrepreneur should be registered with extra-budgetary funds (as an employer). A representative of a small business is not required to have a seal, as well as a current account. Funds can be accepted using strict reporting forms and cash registers. The amount of administrative fines for individual entrepreneurs is significantly lower than for legal entities, as well as the procedure for closing a business is much simpler.
• Income. An entrepreneur can spend all the money the business brings in. There is no need to document each transaction and make additional deductions in favor of the state.

Cons of IP

The main disadvantage of this form of taxation comes down to the amount of responsibility of the businessman. Against the backdrop of simplification of key processes, an entrepreneur is faced with the need to answer with all his property in case of failures in business processes.

Besides this, there are other disadvantages to be aware of:

1. Customer loy alty. According to statistics, a large part of the population of the Russian Federation trusts companies more than small businesses. For individual entrepreneurs, this problem is not global, since the trust rating can be increased through the formation of their own branding. When people have to deal with a brand, albeit a local one, they are more likely to make a purchase decision. That is, to overcome distrust, an entrepreneur should develop his own branding and, if possible, create a trademark.
2. Restrictions. 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. It is worth looking for information about them in the sectoral federal legislation. As for the regional authorities, they do not have the right to restrict the activities of individual entrepreneurs.

In addition, legal entities periodically refuse to cooperate with entrepreneurs. This is explained by the complexity of paying and returning VAT in this interaction.

Defending interests in court

The scheme of actions largely depends on the area in which the rights were infringed. If a businessman has suffered as a citizen, then he needs to apply to the courts of general jurisdiction. When the problem concerns businessactivities, 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: conducting commercial or industrial activities without registration is prohibited by law.

To protect your interests, you should use not only federal legislation, but also those acts that were adopted at the local level. The latter often define the boundaries of the law on legal entities and individual entrepreneurs in more detail.

Shutdown

Initially, an entrepreneur has the right to terminate his status. Here's what you need to do to formally resign from your activities:

• write a statement;
• provide a receipt for payment of state duty;
• submit a declaration to the National Assembly for the last reporting period;
• inform off-budget funds about the end of economic activities.

After that, the Federal Tax Service employees will put the corresponding mark in the Unified Register.

Results

IP status allows a citizen to carry out entrepreneurial activities, hire employees and keep simple accounting records that do not require the participation of an individual specialist. At the same time, small businesses risk all their property in case of default on debt obligations.