Sole proprietorship: everything about individual entrepreneurs, in plain language. What is an IP and do I need to register it? Step-by-step instructions for beginners Is it difficult to open an IP

If you are going to open a business, then the first thing you will need to decide on is the form of ownership . The most common forms of ownership are sole proprietorships and LLCs. They are very different and when registering a company, you cannot make a mistake with the choice.

Status Features

The main difference between an individual entrepreneur and other forms of organization is that an individual entrepreneur is still an individual, and LLC, JSC and institutions are legal entities. He does not have a separate property, and therefore, in the event of bankruptcy, he risks everything.

It is worth mentioning that ICHP (individual private entrepreneur) and PBOYUL (entrepreneur without a legal entity) are the same as IP, with the only difference being that these terms were used before the abbreviation was introduced.

Benefits of a Sole Proprietor

Of course, an individual entrepreneur has a number of advantages, primarily related to the simplification of systems and taxation and registration. Let's consider the main ones.

1. Simplified registration procedure . In comparison with an individual entrepreneur, you do not need a large package of documents. Only a passport, an application for registration, a receipt for payment of the state duty (its amount is 800 rubles) should be submitted to the Tax Service.
2. Simplified taxation . When registering an individual entrepreneur, you have the right to choose a taxation system, and, as a rule, it is somewhat simpler than if it were with a legal entity.
3. Individual entrepreneurs are exempted from conducting accounting activities . This greatly simplifies the activities of the IP, and also reduces costs. Of course, there should be some kind of accounting, for example, the Book of Income and Expenses.
4. The individual entrepreneur takes all the profits received , while the founder of the LLC receives.
5. Minimum registration costs . You need to pay only 800 rubles to become an individual entrepreneur, and if the documents are submitted in electronic form, then the future individual entrepreneur is generally exempted from the obligation to pay state duty (Article 333.35 of the Tax Code of the Russian Federation).

Flaws

Unfortunately, despite a sufficient number of advantages, there are also disadvantages.

1. The most significant disadvantage is that an individual entrepreneur is liable for obligations with all his property , with the exception of that property, which, in accordance with Art. 24 of the Civil Code of the Russian Federation cannot be recovered.
2. Individual entrepreneurs are sometimes not entitled to choose the direction of activity that interests them . So, he can be engaged in the sale of alcoholic products only if he has the appropriate license.
3. It is necessary to pay contributions to extra-budgetary funds, regardless of whether the entrepreneur receives a profit or not. Contributions can only be suspended when the IP self-destructs.
4. Severe limitation in terms of funding . If you want the investor to become a member of the founders, then the formation of a legal entity will be required.
5. An individual entrepreneur will not be able to sell the business , because it bears the name of an individual entrepreneur . You can sell property, but not the rights and obligations to conduct business as an individual entrepreneur.
6. If you use the general taxation system, then you cannot take into account the losses of previous years when calculating personal income tax.
7. If a simplified taxation system is used, then counterparties will not be able to offset the outgoing VAT .
8. Customer distrust . As a rule, consumers trust organizations registered as LLC more.
9. If you plan to take part in procurement, then registration as an individual entrepreneur is highly undesirable, because. individual entrepreneurs are rarely allowed to participate in tenders .

Status assessment for own business and risks

Any novice businessman should study the legal aspects of doing business associated with the chosen form of ownership. So, entrepreneurs who have chosen IP as a form of ownership do not lose anything from an individual, but simply acquire new obligations and opportunities. They have the right to hire workers, but they must also register with non-budgetary bodies and regularly pay contributions.

An individual entrepreneur, as well as a private person, may be limited in his rights by a court decision. However, the legal status does not deprive a person of his rights as an individual.

If you are in doubt between choosing an individual entrepreneur and an LLC, then it is worth considering their differences more clearly.

So, which is easier and more profitable? IP is a simpler organizational form, it is better for a novice entrepreneur to start with it. IP can always be "remade" into an LLC. Of course, it still depends on the scale.

Small business is better to open with IP. If you are going to immediately make a large production, then it is better to choose an LLC. A lot also depends on the business area: for the alcohol trade, you need to choose an LLC, for the rest, an individual entrepreneur is suitable. If you are going to work with VAT, then the option with LLC is preferable, if without VAT, then it is better to create an IP.

Should I start a sole proprietorship in 2020?

To understand whether it is worth opening an IP in 2020, let's look at the main changes that will occur with this organizational form.

Firstly, starting from 2018, contributions to extra-budgetary funds are taken under control by the Federal Tax Service , therefore, the methodology and method of paying contributions to extra-budgetary funds is subject to fundamental changes.

Moreover, there is information that even the very scheme for calculating contributions will change, which implies some increase in them. Good news for those who planned to conduct their activities as an individual entrepreneur with the UTII tax regime. The UTII has been extended until 2021. Since 2018, the declaration for this tax system has changed.

What are the pros and cons of IP and LLC relative to each other, you will learn from this video.

Others have gone into the shadows. After these changes, many have a question: is it profitable to open an IP. It remains relevant in 2018, and the outbreak of the economic crisis only added doubts.

Profit or Loss

Today, entrepreneurs are most concerned about whether doing business will generate income and whether it is profitable to open a private enterprise for a small business . If earlier such a question was not raised for enterprises with low profits, now it is necessary to calculate at what minimum income it is possible to open an individual entrepreneur and not go into the red.

Since 2013, some entrepreneurs have registered the termination of their activities, as they managed to earn less in a year than was given to the Pension Fund. Of course, such a business does not make sense. What to work for? To pay dues and taxes? According to some data, the number of active individual entrepreneurs by the end of 2015 decreased to the level of 2007. This indicator probably most realistically reflects the current situation in small and medium-sized businesses.

What to choose: legal entity or individual entrepreneur?

Despite all this, both positive and negative aspects of registering activities as an individual entrepreneur remain the same.

For example, to open an IP in Russia in 2018, you have to pay less than when registering an LLC, and the procedure itself is much simpler. An individual entrepreneur is not required to keep accounting records in the absence of hired labor. Sanctions for tax or administrative violations are much milder than for legal entities.

One of the significant disadvantages of doing business as a private enterprise is that you will have to bear responsibility for your activities with all the property that a citizen has. The founders of an LLC (or other similar organization) do not risk their personal capital, but are liable before the law only with the property and authorized capital of a legal entity.

Thus, there are pros and cons to any form of doing business.

Reducing the tax burden for individual entrepreneurs

It should be noted that in 2014 the President of the Russian Federation by his decree reduced the tax burden on private entrepreneurs. Now you will have to pay to the Pension Fund by about a third less (about 20,000 rubles). At the same time, for those whose annual income turns out to be more than 300,000 rubles, an additional payment has been introduced - 1 percent of the amount that exceeds this level.

Additional changes

In the new year, the state adopted a number of regulations that have a significant impact on entrepreneurial activity:

1. Since 2016, it is possible to register as an entrepreneur with the help of notaries. The latter were obliged to provide documents for everyone who wants to open their business to the registration authorities, as well as to receive documents there that confirm the state registration of individual entrepreneurs, including an extract from the State Register. The state has determined the cost of such a service in the amount of 1,000 rubles.

   For providing false data, a failed entrepreneur will pay a fine of 5 to 10 thousand rubles.

2. Also, since 2016, the government has set a moratorium on business inspections for the next three years. Individual entrepreneurs can only check compliance with fire safety requirements, safety of hydraulic structures, ecology, etc. and in the case of operation of the respective facilities.
   

   However, control over the activities of entrepreneurs will still be carried out - no one has canceled unscheduled inspections. In addition, the period for holding them has been extended by 10 days due to the fact that the regulatory authorities must independently request documents from registers and other databases.

3. The good news for new businessmen is that this year municipal governments have the right to make their own decisions regarding tax cuts. And newly created individual entrepreneurs who are employed in the industrial, social or scientific fields and are participants in the patent or simplified taxation system can count on zero taxation.
4. Since 2016, a new quarterly declaration has been added - all employers will have to submit a report in the form 6-personal income tax, which contains information on the amounts of income tax accrued and withheld from employees. It is served until the last day of the month following the expired quarter, while the annual one - until April 1. For late submission of the document, the individual entrepreneur will have to pay a fine of 100 rubles for each day of delay, the fine for providing incorrect information will be 500 rubles. If the number of employees exceeds 25 people, then the report is submitted only in electronic form, in other cases, businessmen can submit it in paper form.
5. Entrepreneurs,

Communicating with other needlewomen, I realized that one of the most pressing issues for many of them is the issue of “formalizing relations” with the tax office.

Do I need to register as a sole trader to sell handicrafts ? If so, at what stage should this be done - immediately, as soon as the first sale occurs, or already when income from needlework has become stable?

I propose not to rely on conjectures and conjectures, but to figure out what our Russian legislation says about this.

I'm a businessman? Exactly exactly?

First of all, let's understand what entrepreneurial activity is.

“Entrepreneurial activity is an independent activity carried out at one’s own risk, aimed at systematically making a profit from the use of property, the sale of goods, the performance of work or the provision of services by persons registered in the manner prescribed by law” (clause 1, article 2 of the Civil Code of the Russian Federation). Consequently, there are two key features of entrepreneurship - profit and the systematic receipt of it.

With the sign of “systematicity”, the main difficulty lies in the fact that the legislation does not have a clear definition of what is meant by this term. In the light of the question “to register an individual entrepreneur or not to register”, it would be logical to assume that by “systematic” we mean regular, incessant. However, in practice, legislators under systematicity can count an action repeated two or more times. Such ambiguity in the interpretation of the word "systematic" does not play into the hands of those who sell handmade.

Now let's deal with the concept of "profit".

Some needlewomen do not realize the difference between the concepts of "profit" and "income", and therefore mistakenly believe that they need to run to the tax office and register as soon as the first sale was made. Meanwhile, “profit” and “income” are not the same thing. Revenue is the total amount of money you receive from the sale of a product. Profit is the difference between the income from the sale of a product and the costs associated with the production and sale of this product.

And here a quite pertinent question arises - are you counting your costs correctly?

Remember everything =)

If, by the way, you are engaged in sewing textile dolls, then the list of your costs should include not only the costs of materials (fabric, stuffing, material for tinting, etc.), but also all the tools (brushes, needles, extractor etc.), as well as a sewing machine and other equipment. Be sure to take into account the "non-production" costs that you incurred to organize the sale - a subscription fee for the Internet, the cost of a club card at the "Masters Fair", shipping the product to another city, the cost of participating in the fair, etc.

If you buy a table lamp so that your eyes feel comfortable when sewing a doll, then you also have the right to attribute the purchase of a lamp to the list of costs - these are the costs of ensuring normal working conditions. If your sewing machine breaks down and you spend money on fixing it, that should be included in your list of expenses too. Therefore, be sure to collect and keep all receipts confirming your expenses.

And another important point is contributions to the Pension Fund and the Compulsory Medical Insurance Fund. The total amount of mandatory contributions in 2013 for individual entrepreneurs is 36 thousand rubles. These deductions are also costs, they must be taken into account when calculating the cost of the product and your profit.

Calculate how much per month you need to sell your products to cover all losses and start making a profit? For each, this amount will be different, because. different types of needlework and ways of selling require different costs. Thus, if your income from the sale of handicrafts does not currently cover all the costs listed above, then you do not need to register as an individual entrepreneur, since in fact you have no profit.

I would even say that it is not only not necessary to register at this stage, but also extremely dangerous! You risk losing the most important thing - the craving for creativity, satisfaction from your favorite pastime. All these paper troubles and considerable contributions to the pension fund can become such a headache that the desire to needlework will be completely repulsed ... Have you probably already thought about this?

What if…

Theoretically, even if you do not sell very many of your works and have a very modest income, the tax office, of course, can be interested in you.

In order to hold you accountable for doing business without registration, the inspection authorities will need to prove two things: systematic and making a profit.

We have already dealt with systematicity, if they confirm the fact of at least two sales, then the activity will be recognized as systematic.

But the fact of making a profit is quite difficult to prove. First, you need to establish the fact of receipt of money from the sale of handicrafts. Secondly, you will need to prove that you are making a profit from doing needlework (I repeat, it is profit, not income).

What threatens you if, nevertheless, fortune is not on your side? Liability for carrying out entrepreneurial activities without registration as an individual entrepreneur is provided for both in the Code of Administrative Offenses of the Russian Federation (KOAP) and in the Criminal Code of the Russian Federation.

According to article 14.1. Code of Administrative Offenses, the implementation of entrepreneurial activities without state registration entails the imposition of an administrative fine in the amount of five hundred to two thousand rubles .

Moreover, according to the law, it is possible to bring to responsibility under this article only within two months from the date of drawing up the protocol. If the case on the violation is not considered by the judge within 2 months, the judge will issue a decision to terminate the proceedings on the case of an administrative offense.

The Criminal Code provides for more severe penalties. According to Article 171 of the Criminal Code of the Russian Federation, illegal entrepreneurship is punishable by a fine in the amount of up to three hundred thousand rubles or in the amount of the wage or other income of the convicted person for a period of up to two years, or by compulsory work for a term of up to four hundred and eighty hours, or by arrest for a term of up to six months.

But in order to bring you to criminal responsibility, your activity must fall under the wording "Carrying out business activities without registration, if this act caused major damage to citizens, organizations or the state, or is associated with the extraction of income on a large scale." Income on a large scale, according to some sources, is 250,000 rubles a year.

The court considers and takes into account all the circumstances of the case, and the severity of the punishment is always comparable to the size of your offense. Therefore, you will definitely not be brought to criminal responsibility for needlework, the maximum that threatens you is an administrative fine of up to 2,000 rubles.

Think for yourself, decide for yourself...

When to register

This is my personal opinion, it may differ from yours. But, in my opinion, it is worth registering your activities with the tax office when:

1).
The sale of handicrafts has become your main and stable source of income; 2). The amount of your income from the sale of hand-made is equal to (or greater than) the potential income calculated specifically for your region under the patent taxation system (PST).

The fact is that if we consider hand-made as a business, then this activity falls under a patent and provides for a special (preferential) taxation regime. A complete list of activities that fall under the patent is listed in article 346.25.1 of the Tax Code of the Russian Federation, clause 2.

Hello dear readers! I have been asked to write this article for a long time, and today I prepared it together with lawyers. Today we will talk about the legal performance of entrepreneurial activities without registering an individual entrepreneur or LLC. More precisely, about how to receive income legally without registration as an individual entrepreneur or LLC.

It should be said right away that, according to the norms of civil law, entrepreneurial activity is an independent activity, the main purpose of which is always the systematic profit. And in this case, or jur. entity (LLC) is mandatory.

But, there are other ways in which an individual (you) can profit from another person (or from an organization). For this, it is not necessary to become an individual entrepreneur or open an LLC. Without registration of entrepreneurial activity, an individual can make ordinary transactions for compensation - while in order to recognize an individual as an individual entrepreneur, it is necessary for him to carry out a special kind of activity (according to the letter of the Ministry of Finance dated September 22, 2006 N 03-05-01-03 / 125) . So, here are the ways to conclude transactions without registering as an individual entrepreneur or LLC.

Work under a contract

Method one - an individual can conclude. For example, an individual (you), by agreement with the customer, performs certain work and hands it over. The customer accepts the final result and pays for it. The issue of paying taxes under this agreement is much more complicated - there are certain nuances here.

In the case when the customer is a legal entity , and the contractor (you) is an individual who is not an individual entrepreneur, when paying remuneration to a person for the work performed, the customer (organization) must calculate, withhold and transfer personal income tax at a rate of 13%.

Also, when a contract is concluded by a customer organization and an individual, it is worth considering the fact that some more payments must be paid:

• Payments for types of social insurance cases (this includes accidents at work and cases of occupational diseases). Payment of such payments is possible only at the conclusion of a work contract (and only if they are indicated in it).
• Payments to the Pension Fund and MHIF.

If the contract is concluded between individuals , then you (the contractor) must pay personal income tax on your own. To do this, you need to fill out and submit it to the tax office.

Contract for the provision of services

Method two - an individual can be concluded. A citizen can perform any service (consulting, medical, legal or other), and the customer must subsequently pay for this service.

The difference between a work contract and a contract for the provision of services is that the result of the first is something material (construction or repair work, the manufacture of some thing), and services under a contract for the provision of services include the following: training, tutoring, consulting and information services, communication services, medical, veterinary, day care (nanny), audit services, travel services and others.

The payment of taxes under the contract for the provision of services is similar to the previous contract - the payment of personal income tax on remuneration in the general manner. In general, payments are made to the Pension Fund and the Compulsory Medical Insurance Fund. And similar conditions for independent deductions.

Agency contract

The third way - an individual (you) can be concluded . The agent, on behalf of the customer (principal), is engaged in the performance of certain legal and other actions, and receives appropriate remuneration for the actions performed.

An agency agreement is concluded, for example, when it is necessary to sell a product, while it is necessary to analyze the market, conduct an advertising campaign, and the like. This agreement is more convenient in relation to the commission agreement or commission agreement (which we will discuss below), since it eliminates the need to conclude additional agreements.

The nuances of concluding an agency agreement with an individual:

• Such an agreement involves the commission of not one transaction, but, as a rule, a number of transactions. The agent makes them for a certain period of time.
• The agent may act under this agreement within the same territory.
• Such an agreement may provide for the agent's refusal to conclude other similar agreements.
• The agent can transfer his duties to another person (to conclude the so-called sub-agency agreement).

Commission agreement and commission agreement

Another way of earning for an individual can be a type of agency agreement - commission agreement or commission agreement . You can learn more about it and download it. The commission agent concludes transactions with third parties, and the customer of the service (committent) pays the commission agent (executor) a cash payment for this. This type of contract is analogous to an agency contract. Often, this type of contract is used to conclude sales transactions.

Treaties of the same type include and . The application of this agreement is possible in cases where the personal participation of the principal is impossible, for example, due to illness, business trips, lack of special knowledge, and the like.

Such an agreement is concluded for the provision of legal assistance , representation in court, customs authorities, Rosreestr authorities (registration of rights to real estate) and other state institutions , as well as when concluding transactions on behalf of another person. This type of contract is accompanied by the issuance of a power of attorney to the guarantor.

Unlike an agency agreement, an agency agreement has a short term, a period for the performance of entrusted legal actions. In order for this transaction to be executed successfully, the correct execution of the contract is necessary. To avoid misunderstanding, it is necessary to agree on all clauses of the contract. The contract is drawn up in two copies. The transfer of funds under this agreement may be accompanied by a receipt.

You may operate under this agreement as a realtor, lawyer or other person carrying out any transactions on behalf of your customer.

How should proceeds be accepted under an agreement between two individuals?

If the services are unlicensed, then the following method can be applied. Its essence is that one individual is engaged in the independent conclusion of an agreement and the personal provision of services (works). After receiving payment for the service rendered (work performed), an individual issues a corresponding receipt (that he received the money).

If you use this method, it is worth considering a number of nuances:

• In order for it to be successfully implemented, it is necessary to carry out the correct drafting of the contract itself. In any type of contract, all conditions must be clearly spelled out.
• You can take money in hand only after signing two copies of the contract by the client. One of them must be kept by you. Also, the client must pick up a receipt that the money has been received. The receipt must also be in duplicate - just in case.

For the sale of goods

If you are engaged in the sale of goods, then an agency agreement and a commission agreement may also suit you. You can also enter into a contract of sale. But in this case, it will also be necessary to provide documents for the goods from the manufacturer in order to confirm its compliance and the invoice, if there are several goods.

Upon completion of the transaction, you also pay 13% personal income tax. In this case, this is not profitable, because not all goods have a large margin, and paying 13% of the transaction amount is a lot. It's easier to pay! Therefore, in this case, it is better to register as an individual entrepreneur if the activity is carried out and there are incomes. Moreover, when selling inexpensive goods at retail, you will not enter into an agreement with each buyer, this is stupid. Basically, a sales contract is used for wholesale lots, for the sale of equipment, cars, real estate, land and other expensive objects.

Some private traders work without registration and do not pay taxes, but this is before the first complaint from a client or competitor.

Conclusion

Thus, if the reimbursable transactions made by a citizen do not have a systematic nature of making a profit, then you can use the above types of contracts. Otherwise, if you decide to put your activity on stream, then, in order to avoid it, you should register as an individual entrepreneur or legal entity.

And now in simple terms

In general, if you want to provide any services, you can enter into contracts with clients that we talked about above and receive income legally on their basis without registering an individual entrepreneur or LLC. Mostly they use a work contract and a contract for the provision of services, and the rest in rare cases.

This is how a lot of private companies work. Most do not even pay personal income tax for themselves if they work with individuals and live in peace. But there is a risk here. If they are caught and proved that they carried out many such transactions and did not pay taxes, they cannot do without a fine. The fines are not large, so many people work like that. But I do not recommend doing this, because you can pay taxes and sleep peacefully.

If you have questions, objections or additions, please write in the comments!

For those starting their own business , at first there are a lot of questions about the design of their activities. While there is no income or they are very modest, I want to save on expenses and not spend too much. I will try to highlight some issues here.

Do I need to register an IP

Citizens of Russia can engage in any business activity, except those prohibited by law (manufacturing and selling weapons, drugs, etc.).

Entrepreneurship is the independent activity of citizens aimed at making a profit. Not all paid activities will be such. If you repaired a neighbor's TV and received 100 rubles for it, this is not entrepreneurship. But when you systematically provide repair services for household appliances and electronics to everyone for a fee, then you need to register an individual entrepreneur.

Signs of entrepreneurship:
- activities are carried out at your own peril and risk (personal responsibility);
- activities are carried out systematically (transactions are made more than once a year);
- the activity is aimed at making a profit (receiving income).

Do I need to pay corporate taxes

Of course, you need to pay taxes for IP. Now let's figure out when and what. After registration, the entrepreneur is registered with the Pension Fund. From that day on, he must pay insurance premiums to the Pension Fund of the Russian Federation and FFOMS "for himself", calculated from the cost of the insurance year . Contributions are paid regardless of the ongoing activity or its absence until the day of liquidation of the IP. In 2012, the amount of the fixed payment amounted to 17,208.25 rubles per year.

If an individual entrepreneur hires workers, he must accrue and pay them wages , transfer the withheld income tax to the budget and pay insurance premiums to the Pension Fund and the Social Insurance Fund in the amount of 30% of the wage fund.

An entrepreneur on the OSNO or STS who does not carry out activities (does not receive income) does not pay a single tax, but submits a zero declaration. A simplified taxation system for individual entrepreneurs without employees and with employees is discussed in the heading "Taxes"

In any case, the entrepreneur pays a single tax on imputed income (regardless of the conduct of activities), since it is calculated from the value of physical indicators. In order not to pay tax, submit to the tax authority a notice of termination of UTII activities.

Do I need a checking account

According to the law, an entrepreneur can work without opening a current account. All payments should be made in cash and purchased with cash registers. The use of a personal plastic card for business purposes is not provided for by the instruction of the Central Bank of the Russian Federation of September 14, 2006 N 28-I. You can pay taxes and contributions through the payment terminal in the bank.

A current account is needed for settlements with suppliers, as many counterparties prefer to work without cash. and how to prepare can be read on the site.

Do you need an IP seal?

The law allows entrepreneurs to work without a seal, banks accept payment orders only with the signature of an individual entrepreneur. But printing is an additional protection for your documents, and a contract or invoice without a seal looks undignified.

Printing is inexpensive (from 150 rubles), but if you start using it, then you will need to put it everywhere. When submitting reports in electronic form, it will be necessary to give a power of attorney to send the declaration via communication channels, and a seal will be required.

In addition, entries in the work book of employees must be certified by the signature and seal of the entrepreneur. By law, you can not put a seal, but it is not known how the employees of the Pension Fund will look at this during the further registration of a pension.

Learn more and print requirements.

Do you need an IP license?

The requirement for a license depends on the type of business activity. Every year legislators reduce the list of licensed occupations. Licensing of activities is considered in a separate article.

If you have any other questions about this topic, ask them in the comments and be sure to get an answer.

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