When organizing their business, many of its founders often ask themselves: what legal form to choose? In this article, we will try to make out what an emergency is, what an LLC is, what is their difference and what are the advantages.
What is LLC
LLC is an abbreviation meaning: "Limited liability company". This is the most common legal form of enterprises today, as well as state of emergency. What is an emergency and how does it differ from an LLC, we will consider later in this article. An LLC is a company that can be established by one or more people.
Moreover, founders can be not only individuals, but also legal entities.
When creating an LLC, for its full functioning, it will be necessary to perform the following steps:
- Define the name of the company.
- Locate Location - Legal Address.
- Choose a leader - the sole executive body.
- Choose activities for the enterprise.
- Prepare documents for registration.
- Pay the authorized capital in any way possible.
- Pass the state registration procedure.
- Make stamps and stamps.
- Open a bank account.
- Report the opening of the company to extrabudgetary organizations.
- Choose a tax regime.
- Employ employees.
The number of employees in the LLC is not limited in any way. Persons working in such an enterprise are subject to all the provisions of the current labor law.
What is an emergency
PE is an abbreviation meaning: "Private Entrepreneur". Speaking of an emergency, the meaning of which is an individual, it is necessary to represent a citizen of the Russian Federation who has expressed a desire to engage in entrepreneurial activity and has passed state registration in the prescribed manner.
Today, the concept of "private entrepreneur" as such is no longer there. Therefore, it is useless to look for the answer to the question of what is an emergency? At the legislative level, it has been replaced by the “Individual Entrepreneur”.
And yet, answering the question of whether a state of emergency is a private entrepreneur or an enterprise, one can definitely answer that it is an entrepreneur.
In order to obtain IP status, you must perform the following steps:
- Decide on the desired activities.
- Prepare registration documents. The residential address of the individual will be indicated as the IP address.
- Pass the state registration procedure.
- For full functioning, there is no need to obtain a seal and open a current account.
An individual entrepreneur can employ any number of people. Like the LLC, the individual entrepreneur is obliged to keep work books and make all necessary contributions, including to the Pension Fund and the social insurance department. Absolutely all types of guarantees established by labor legislation apply to IP employees.
LLC registration procedure
In order to open an LLC, the following list of documents must be submitted to the registration authority:
- The decision to establish an LLC or the minutes of the meeting of founders (if there are several founders).
- The agreement on the establishment of the LLC - if several founders.
- Charter LLC.
- Application for registration in the form P 11001. It should be noted that this application is mandatory certified by a notary, a fee is paid for performing notarial acts.
- A letter of guarantee from the owner of the premises where state registration is made, or copies of documents of title.
- Pay state duty in the amount of 4 thousand rubles and 400 rubles for the issuance of a certified copy of the Charter.
- If necessary, submit a statement on the transition to a simplified tax system.
- The power of attorney, if the documents for registration will be provided by another person. In this case, it is issued on behalf of all the founders who have assured their signature in the application for registration.
Within 5 working days, the relevant authority will issue a certificate of state registration, an extract from the Unified State Register of Legal Entities, a copy of the Charter, a certificate of tax registration (or a reasoned refusal to register LLC).
The procedure for creating IP
It is not difficult to register an IP on your own. To do this, perform the following steps:
- Choose activities, or OKVED, for small business.
- Independently fill out an application in the form P 21001. The specified application may be filled in both by hand and in print. But it should be remembered that it is impossible to make corrections, corrections or correct information in the printed version.
- Since 2011, there is no need to certify the said application with a notary public if the future individual provides documents for registration in person. If the documents will be submitted through a representative or by mail, then in this case it is necessary to attach to the package of documents:
- a copy of the passport;
- notarized application for registration in the form P 21001;
- power of attorney for an authorized person.
It should be borne in mind that a representative cannot always get ready-made documents from the tax.
4. Prepare a statement on the transition to a simplified tax system.
Advantages and disadvantages of LLC
Any form of doing business has a number of advantages and disadvantages. We will also find some of them at LLC:
- Responsibility for the LLC may be limited by the size of the authorized capital, for the founder - in the amount of its contribution. The size of fines for enterprises is quite large.
- Sufficient anonymity of LLC participants.
- Litigation at LLC is always subject to consideration in Arbitration courts.
- There are a number of restrictions on LLC cash management. For example, in one transaction, the cost of receiving cash is limited to 60 thousand rubles. LLC is obliged to observe cash discipline and maintain appropriate reporting.
- An LLC is required to open bank accounts and report this to the tax authority.
- When distributing profits, after paying all taxes and contributions from dividends received, the founders must pay personal income tax in the amount of 9%. The right to receive dividends arises no more than once a quarter.
- Modern enterprises have developed a more trusting attitude to LLC as a form of business, since this form of organization involves a more serious cash, financial liability.
Disadvantages and advantages of IP
Consider the pros and cons of IP:
1. When creating an
individual entrepreneur,
an individual will incur less costs for paying
state fees (paying a notary public, a state duty for registration, paying a registered capital) than when creating an LLC.
2. For its debts, the individual entrepreneur is liable with all his property - as an individual. IP may be held criminally liable. Moreover, the size of fines is much lower.
3. Legal disputes with individual entrepreneurs, in the event of appealing regulatory acts of bodies of state bodies, are subject to consideration in the Arbitration Courts. In other cases, disputes are referred for resolution to the courts of general jurisdiction.
4. An individual entrepreneur may carry out licensed activities in accordance with the requirements for candidates. The exception is the ban on the sale of alcoholic beverages.
5. If an individual entrepreneur opens an account as an individual, there is no need to report this to the tax authority. In all other cases, a message is required.
6.
Cash discipline in IP is simplified.
7. Information about the IP is available if only because they break through on the checks.
8. An individual entrepreneur has the right to use the proceeds immediately after receiving them and does not pay any taxes on them.
9. Separate tax benefits have been established for individual entrepreneurs, and the state very often helps in the development of entrepreneurship by establishing various types of subsidies.
It is difficult to answer unequivocally the question of what is better to choose - PE (IP) or LLC. In order to determine the form of running your own business, you need to weigh all the possible pros and cons specifically for yourself, as well as calculate all the associated risks.