Individual entrepreneur - legal form. Types of organizational and legal forms

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

Business is almost ready. There is the most necessary - calculations, a business plan, the premises are looked after. It remains quite a bit - 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, the 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 the issue of choosing the legal form of his favorite business.

This choice is determined by a combination of both subjective factors affecting the entrepreneur and objective reality.

Form concept

Under the legal form it is customary to understand the method of using and securing property by a business entity and the legal status, as well as the goalsactivities that flow from this.

Choosing the right form of business gives founders additional tools to grow their business rapidly.

Most often, IP registration occurs (stands for the legal form of "individual entrepreneur"). In addition, limited liability companies (LLC), closed joint stock companies (CJSC) are registered. Each of the forms has both its advantages and disadvantages, which you need to know about before starting a business.

Sole proprietorship

The legal form of an individual entrepreneur is most often chosen for registration of a small business. Most often, activities are related to retail trade, public catering, as well as services that are provided to the population. This choice is made due to the fact that individual entrepreneurs are given greater freedom in the matter of handling cash. Accounting for this form is very simple: it does not require the hiring of qualified personnel and deep knowledge in this area. However, in the event of a burnout or bankruptcy of the business, the entrepreneur will be liable with all the property that he has.

IP features

The legal form of an individual entrepreneur (PBOYuL or PE until 2005) - involves the registration of an individual as an entrepreneur. In this case, the legal entity does not open. For such businessmen, the rules of the Civil Code) are used that regulate the actions of legal entities or legal acts (according to Article 23 of the Civil Code). because oflegally limited, the true form of business organization is almost always a small or micro business.

Doing Business

Before registration, the owner thinks about the form of "individual entrepreneur". What organizational and legal form is good, optimal, what to focus on in choosing?

The term "entrepreneurial activity" itself is the implementation at one's own risk of independent activity, which is aimed at obtaining a regular profit from the use of property, performance of work, sale of goods or offer of services. The key point is "regularity". A one-time sale or rendered service can be provided without an IP. However, there is no exact wording in the legislation of what is considered “regularity”. Without registration, it is possible to receive income only from renting out your home.

Responsibility

For the fact that activities are 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 sum of wages or other income for a period which may be equal to two years. Also, the punishment can be equated to working out compulsory work. The term lasts from 180 hours to 240. Arrest for a period of up to six months can also be applied.

The legal form of the enterprise "individual entrepreneur" in case of income over one and a half million rubles. (is an especially large size) involves liability in the formpunishments:

• fine, the value of which starts from 100,000 rubles. up to RUB 500,000;
• pen alty in the amount of any income or wages for a time interval from one to three years;
• imprisonment up to five years with an additional fine, the amount of which is equal to an amount reaching eighty thousand rubles;
• imprisonment of up to five years with or without an additional fine.

For obligations, transactions, contracts, an entrepreneur who does not have registration is fully responsible. Reference to non-registration is not a mitigating factor.

Pen alties

The legal form of an individual entrepreneur is duties, rights, responsibilities, the execution or non-performance of which entails punishment.

If in order to start a criminal case, the amount is not reached, then they will impose a fine. 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 equal to 20% of the unpaid tax.

OKOPF code

The code of the legal form of an individual entrepreneur is indicated in the classifier.

Abbreviation OKOPF - All-Russian classifier of organizational and legal forms. This code is required in order to:

• wasthe ability to create information resources that contain information about business entities;
• solving analytical problems of statistics, economics and taxation, which are related to the disposal of property and property management;
• predicted and analyzed socio-economic processes;
• recommendations were developed on the issues of regulating the economy.

The code itself is made up of 5 digits. For example, the following codes apply for business forms:

• 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 included in the classifier code.

To determine the code, you need to figure out what each digit means.

• First - section.
• The second from the third digit are responsible for a certain type of legal form; and the fourth - for the type of specific legal form.

In order to view the code, you must use the classifier in the classifier system or contact the services of consultants.

Restrictions

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. Restrictions onno business income either.

Employees of the FSS and PFR, tax, FSB, Ministry of Internal Affairs, officials, rectors, school leaders cannot be IP.

Public 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 stores, etc.) has both its advantages and disadvantages.

An entrepreneur who does not form a legal entity has among the pluses:

• simple business registration and termination procedures;
• a small list of documents required for the procedure;
• a simple reporting form, a small list of taxes;
• lack of accounting: IP only keeps a book of expenses and income, and also provides 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 to understand what disadvantages a business may have in the chosen form.

Among the disadvantages of IP, they note:

• responsibility for all matters with their property in the whole;
• inability to distribute responsibility for obligations that arose as a result of activities between the founders;
• difficulties in attracting investors due to lack of stakes or shares;
• difficulties with selling a business, since it can only sellpersonal property in the form of assets;
• transfer of business by inheritance involves a lot of paperwork.

The legal form of ownership "individual entrepreneur" is convenient for the founder of a business, but often legal entities do not want to work with individual entrepreneurs, preferring more significant CJSC or LLC.

Distinguishing Features

A popular type of business is an individual entrepreneur, the legal form is not only simple, but also easily formalized. But the owner must know what is the difference between IP and other persons.

For the registration of such a form, a state duty is charged 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.

IP does not deal with the cash register, he can dispose of the funds in the account at his own discretion. Household decisions are made without entering into the minutes.

Registration of a business is done only on oneself, registration of several founders is not possible. This business cannot be sold or re-registered.

Employees employed by individual entrepreneurs have few rights.

Who can register a business

The following can register a business in this legal form:

• capable adultscitizens of the Russian Federation;
• minor citizens with the permission of guardians or parents;
• citizens of another country who live on the territory of the Russian Federation;
• citizens 16 years of age who are married or recognized by a special body as capable.

Registration procedure

Required for registration:

• application in one copy for state registration of IP;
• copy of individual taxpayer number;
• form P21001 completed by 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 USRIP (state register containing a list of individual entrepreneurs).

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 minimal reporting. Online services that provide services on a free or paid basis can remind you of the deadlines for submitting documents to the authorities.