Definition of IP: legal or natural person. IP - an individual or a legal entity? Is the IP a legal entity?

An individual entrepreneur is a legal entity or an individual? Answer unambiguously the question “Is an individual entrepreneur a legal entity or an individual?” difficult - at least for the understanding of a simple man in the street. If the answer to this question is unknown to you, but you need to deal with it, the article will help you.

Who is an individual entrepreneur, and why is it important to choose the right form of doing business

An individual entrepreneur is a person who, wishing to engage in entrepreneurial activity, registered with the tax office as an individual entrepreneur and received the appropriate right.

Understanding, physical or legal entity is an individual entrepreneur, it is necessary to understand the differences between individuals and legal entities.

A legal entity is an independent company that has the right to acquire rights and obligations on its own behalf. For example, when buying a product, it does not become the property of the founders of the legal entity, but the property of the company, i.e. the organization independently acquires the rights to property on its own behalf. Speaking of obligations, we can give a simple example - the obligation to pay taxes. Taxes should be paid by the organization, not its founders. Sole Proprietor Income Tax is paid by the Sole Proprietor.

We emphasize: the organization acquires rights and obligations not on behalf of the persons who established (organized) this legal entity. person, namely from his own.

An individual, in turn, has personal rights and obligations, bears independent responsibility - receives ownership of the assets he acquires, bears personal responsibility for paying taxes, etc.

Let's explain in simple words why it is necessary to distinguish the organizational and legal form. The fact is that a lot depends on the right choice - the procedure for registering as a legal entity or individual entrepreneur, the procedure for paying taxes, the ability to engage in one or another activity (for example, individual entrepreneurs cannot sell strong alcohol, but LLCs can), the procedure for submitting reports and accounting, and much more. Accordingly, when choosing a legal form, you proceed from the tasks of the future business and answer the question - is it possible with one form or another of doing business to succeed in the chosen direction of entrepreneurial activity.

Is an individual entrepreneur a legal entity

Is an individual entrepreneur a legal entity? The answer is unequivocal - no.

When considering this situation, it is necessary to pay attention to similar signs of IP and legal entities. persons:

• the obligation to conduct accounting, personnel records management (if there are employees), payment of taxes related to the conduct of entrepreneurial activities;
• the presence of mandatory registration in the tax office, the ability to have a seal;
• increased (in comparison with a natural person) responsibility for administrative offenses.

However, there are even more differences:

• An individual entrepreneur, unlike the founders of a legal entity, is liable for debts with all his property.
• one individual entrepreneur cannot be registered by 2 or more persons, but one organization can.
• An individual entrepreneur does not submit as many reports as an LLC, it maintains simplified accounting.
• Individual entrepreneurs have the right to choose a patent taxation regime, while LLC does not.

What do sole proprietors have in common with individuals

For ease of understanding, it can be argued: IP is individual, which is registered with the tax office and can legally conduct business.

• like an individual, an individual entrepreneur pays taxes, but he has more of them, because. he also pays income tax.
• just like an individual, an individual entrepreneur is liable for debts with all acquired property, including a personal car, an apartment, a summer house, etc.
• An individual entrepreneur can file for bankruptcy just like an individual.
• An individual entrepreneur, like an individual, can be a citizen of Russia, a foreigner and a stateless person.
• An individual entrepreneur, like an individual, can defend his interests in court, but business-related issues are considered not by courts of general jurisdiction, but by arbitration courts.

conclusions

So, we figured out the question of whether an individual entrepreneur is a legal entity or an individual. By virtue of the law, an individual entrepreneur is an individual, however, endowed with a special status and the ability to exercise entrepreneurial activity. There are many pros and cons of doing business. You can read about them in our article: "What is more profitable and easier to open an individual entrepreneur or LLC". Some types of business can not be run by an individual entrepreneur in principle, and this is a significant limitation. However, if the business is small, then IP is an excellent alternative to legal entities.

An individual entrepreneur (IP) can be considered the starting point of a business. According to statistics, more than 80% of people who have their own business or enterprise today went through the IP stage. This status is considered one of the simplest in terms of many factors, from registration to reporting. That is why he is chosen to start.

However, the one who planned to become a businessman has great amount questions. They are interested in the legal side, the features of the status of an individual entrepreneur, its differences from an individual and a company such as LLC.

Who is a sole trader?

The legislation says that an individual entrepreneur is “an individual registered in the manner prescribed by law and carrying out entrepreneurial activities without forming a legal entity”. If translated into an accessible language, then an individual entrepreneur is a special status of an ordinary adult and capable person, which gives the right to engage in permitted commercial activities.

The term has replaced the abbreviations PBOYUL (entrepreneur without forming a legal entity) and PE (private entrepreneur), which were previously in force. Today IP is the only name denoting this status.

Is the IP a legal entity?

No is not. In everyday life, it is widely believed that all structures engaged in business (or, in other words, permitted commercial activities) for the purpose of obtaining benefits are legal entities. Although logic dictates that a farmer who brought to the market a couple of buckets of apples collected in his own garden clearly falls out of this category. Like a shoemaker who repairs shoes with his own hands in a small kiosk, reminiscent of the size of a doghouse.

That is, we understand that not only a legal entity, but also an individual can legally engage in commerce. It is the individual entrepreneur (special status) that gives him the opportunity and authority to conduct business.

This phenomenon is widespread - sole proprietorship in the USA, autónomo in Spain, sole trader in Australia - all this foreign analogues Russian IP, allowing a person to conduct commercial activities for the purpose of obtaining benefits without creating a legal entity.

It is believed that IP has a number of advantages, due to which it enjoys high level popularity in business. Although it is worth noting separately that an individual entrepreneur is not a legal entity, therefore there are a number of functions of a “firm” that are not available to him.

Comparative table of individual entrepreneurs and legal entities

The first and main difference is that an individual entrepreneur is an individual, while a legal entity implies the use of completely different organizational and legal forms.

Advice: if you ask yourself at the start what is better, an individual entrepreneur or an LLC (as an example of the simplest legal entity), then understand one thing. To put the question in this way is to essentially compare sandals and winter boots. That is, both - shoes in which you can walk. However, these two species perform different functions and provide different possibilities. So it is in business. IP and LLC allow you to conduct commercial activities, but differ significantly in details. Therefore, before making a decision, carefully and carefully analyze which type of business entity is suitable for your purposes. At the same time, consider not only the current moment or the coming months, but also the distant future, as well as options for the development of your project.

Often on the Internet you can find information that IP is preferable, especially at the beginning, that it is easier. Let's try to understand the issue, based on our realities. Actually, we are more concerned about the wrong differences in the use of different normative documents, which regulate the activities of an individual entrepreneur or any legal entity (LLC, JSC), and those practical features that will affect our business.

So, let's compare individual entrepreneurs and LLCs (as the most common legal entity serving as an alternative) with all their pluses and minuses. At the same time, several common myths will be debunked along the way.

1. extremely simple, and opening an LLC is associated with a lot of difficulties.

There is some truth in every statement. However, the facts show that:

• registration period is the same (5 days);
• the set of documents required to open an LLC is only three pieces of paper more, and, rather, their templates are freely available;
• it is possible only if there is one participant, as well as when organizing an IP;
• the state duty for an LLC is more (no one argues), in addition, it will be necessary to contribute the authorized capital (there is a period of 4 months, as well as the ability to make it equivalent - materials, equipment, goods), which is not required in case of creating an IP;
• closing an IP is easier and much cheaper, but claims can be brought against its former owner, who has been “eleven” years old as a non-entrepreneur, which is impossible after the liquidation of a legal entity.

Separately, it is worth mentioning the need for an LLC to have a legal address, which is not needed by an individual entrepreneur. There are also a bunch of pitfalls here. You can get a legal address without much difficulty, it can even be a non-residential premises or a business center that rents office-storage rooms with an area of ​​6 squares. And IP has a strict binding to registration. That is, business in Tomsk for an Omsk citizen will be complicated by the need for mandatory registration, reporting and payment of taxes in his native Omsk.

Important: there are no restrictions in the legislation on registering an LLC with a legal address at the place of residence (registration) of the founder, one of them or CEO. The tax authorities who refuse to do this act according to their own rules, which, in fact, violate the law.

1. The biggest “scarecrow” for individual entrepreneurs and a plus for LLC is property liability. In the first option - with all their property, in the second - only with what is contributed to the authorized capital.

And again, there is only a fraction of the truth here:

• Indeed, an individual entrepreneur is liable with all his property, even with what was received before the start of activity. However, there is a list (clause 1 of article 446 of the Code of Civil Procedure of the Russian Federation), which indicates the property of an individual entrepreneur, which is never collected for debts, for example, the only housing or land.
• For an LLC, which is liable only for part of its property, this is a kind of bonus. That is, the personal property of the founders is, as it were, protected. And this is considered a huge advantage of this format. Although if you delve deeper, it becomes clear that this is, to put it mildly, a fiction. If the LLC is declared bankrupt in court, then the principle of subsidiary liability will come into force, where the founders will have to pay off debts with their own property.

Important: that is, the biggest plus of LLC (such a security of personal, unbearably acquired) in case of troubles with the company is not at all so reinforced concrete. And the IP has an inviolable minimum that allows you to stay at least in your pants, albeit without socks.

1. Money, reporting and taxes - for individual entrepreneurs, the withdrawal of the former is easier, the latter is less, and there are more benefits. Usually, most of the privileges of individual entrepreneurs in tax and financial terms, when thoroughly studied, turn out to be either far-fetched or not so tempting. Similarly with reporting:
   • The content of employees for both organizational and legal forms is the same, and LLCs are almost identical.
   • In most tax regimes, the rates are also identical. Differences exist in common system(OSNO - 20% for LLC and 13% for individual entrepreneurs), as well as the ability of individual entrepreneurs to apply PSN (patent system).
   • Insurance is considered the main disadvantage of IP. But these funds form a medical insurance and a future pension for the owner, that is, they are by no means a waste of money. And an LLC cannot do without payroll, even if its only employee (he is required) is the general director. And here, too, there will be deductions to all funds. Cherry on the cake - IP has the right to reduce the accrued tax amount by 100% of fixed payments, LLC - only by 50.
   • What is really attractive in terms of IP is the withdrawal of earnings. There are no restrictions - take as much as you need, the main thing is that it remains for mandatory payments, the rest is at the disposal of the owner. An LLC has a number of restrictions, its owner (s) cannot easily withdraw a couple of millions from their current account to buy a yacht. Everything has to be done right here.
   • Individual entrepreneurs have many times less document flow, simpler reporting, easier communication with the tax ... The statement is not entirely true because reporting on employees is the same for individual entrepreneurs and LLCs, as well as tax returns. The type and complexity of the latter depends on the applied system, and not on the legal form.

As a conclusion, savings on insurance premiums and taxes depend not so much on the format, but on certain conditions and the literacy of the accountant, as well as the ability to get funds at your own disposal.

Here it should also be taken into account that the tax liability for violations for individual entrepreneurs and LLCs in most cases is almost the same, which cannot be said about administrative and criminal ones. Much more lenient measures are applied to violators-individual entrepreneurs both in monetary terms and in punishments in accordance with the Criminal Code of the Russian Federation.

1. Prospects and opportunities for business development - in this matter, everyone agrees that an LLC is more profitable. This format has a bit more potential:
   • The first and main plus is that the LLC has a much wider list of activities. It is unlikely that his entrepreneur will be able to put in the details of the contract for the sale of alcohol, as well as the production of it and medicines. An individual entrepreneur cannot be engaged in banking and insurance activities, be a tour operator, holder of pawnshops and investment funds.
   • Another advantage of an LLC is that this format is more attractive for investors, that is, investors in a business project. Although the competent conduct of one's own business by an individual entrepreneur can be of interest to many, from the immediate environment of an individual to a bank, and all of them can give money.
   • VAT and nuances. This moment is maximally untwisted in the discussion “for” and “against” IP. Although both an individual entrepreneur and an LLC can be a VAT payer, it's all about the applied taxation system. That is, cooperation with big companies, who are "Endeesniks" (as they say in certain circles), can be difficult for those who do not allocate value added tax and are not registered as its payer.

Important: if you plan to develop your business by attracting investments or focus on working with large companies, then the success of these two areas will depend not so much on the chosen legal form, but on the taxation system. Moreover, it can be changed during operation.

For clarity, all the information is combined in a short table:

To give preference to an LLC or an individual entrepreneur - this question must be answered comprehensively and taking into account all the nuances. But the familiar statements of Internet experts by no means give overall picture. Study the equipment before making a decision.

Frequently asked questions and a little more about what is rarely voiced:

• Question: Why do many recommend starting an independent swim in the business world with registering the status of an individual entrepreneur, although from a comparison of an individual entrepreneur and an LLC as business units, it can be seen that the advantages of each of them are not so great?
• Answer: IP can be closed at any time, it is easy to do, the procedure is much simpler than in the case of an LLC.
• Question: What is the main difference between IP and other organizational and legal forms?
• Answer: Only the status of an individual entrepreneur allows an individual to engage in commercial activities. All other organizational and legal forms that are involved in business processes involve the creation of a legal entity.
• Question: Why not bring the business environment into uniformity by removing, for example, individual entrepreneurs and leaving only legal entities?
• Answer: IP activities can be reduced to the simplest business processes. An individual entrepreneur can facilitate all stages as much as possible, from creation to liquidation. He has the right to choose the least complex taxation system, work without VAT, independently, without employees, and keep simplified accounting. In addition, only an individual entrepreneur can apply PSN, a special taxation system that provides for the acquisition of a patent.
• Question Q: Do I need a checking account?
• Answer: Legally, no. An individual entrepreneur has the right to conduct commercial activities without opening and using a bank account.

Advice: if by the nature of your activity you will need to provide services, sell goods to individuals, then it is worth considering that today a plastic card as a payment instrument is already much more popular than cash in your pocket. By opening a bank account, you can cover more potential customers by improving the service for them.

• Question: Do you need IP printing?
• Answer: At the legislative level, the obligation to print is not fixed. This moment is at the mercy of the businessman himself. Although it adds a kind of weight to the written documents.

And a little more about the details. AT professional environment(among tax specialists, financiers, lawyers) you can find such slang names as a physicist and ... no, not a lyricist, but a yurik. The first are individual entrepreneurs, the second are all legal entities. In addition, in almost every service, from tax to various funds, as a rule, there is a division into departments. In some, individual entrepreneurs are served, in others - legal entities.

Can a sole proprietorship be converted into a legal entity?

Actually, the law does not provide for an algorithm for the direct conversion of an IP into a legal entity. And in fact, this is not possible, because an individual entrepreneur is the status of an individual, although he is not a restrictor of the rights and freedoms of a citizen. That is, a sole trader a common person can become a founder or co-founder of any of the legal entities (LLC, JSC).

At the same time, the law does not oblige when registering a legal entity to indicate this status in any of the documents. The founders (individual citizens) here act exclusively as individuals. The rule does not apply to founders-legal entities.

Can an individual do business without registering an individual entrepreneur?

Yes and no. Everything rests on what a person understands by the term "business". If he, in his opinion, consists in selling the cucumber crop grown on his personal plot or in providing the services of a tutor, then this is one thing. If the plans are to open a permanent outlet or a shoe repair shop, then this is completely different.

In many cases, it can several times exceed the amount required for registering an individual entrepreneur and fixed payments to funds.

Although there are a number of exceptions where the IP is not needed or optional:

• For the sale of agricultural products of a plant nature grown in a household, summer cottages or in private households. For this, only a certificate from the administration is needed. garden partnership or an extract from the business book. Relevant for 2018, next year the rules of the game are planned to be changed.
• For those who make a profit from transactions no more than twice a year, and the amount of turnover on them (indicated in documents confirming payments) does not exceed 200 thousand rubles.
• For those who work under civil contracts and declare their income, it is not necessary to become an individual entrepreneur. The list of permitted agreements can include any agreements of a specified nature for the provision of services, contracts, purchase and sale, royalties, and a number of others. They (contracts) can be one-time or focused on a long period. The main thing in these cases is a report on their income and payment of taxes due as an individual.
• For those who are careful about dropshipping.
• Those who perform intermediary functions.

The last two points have a lot of similar points that nullify all the charms of business outside of forms and statuses:

• you need to look for partners, suppliers and buyers who will agree to a certain scheme, where the intermediary (dropshipper) does not participate as a unit in the chain of documents;
• since such systems do not involve the responsibility of an intermediary or dropshipper, you need to be absolutely sure of the quality of the product, the ability of suppliers or sellers to resolve conflict situations with clients;
• a person working under such schemes without an individual entrepreneur or legal entity is always dependent on his partners, their business methods, and also on how they will make calculations.

As a result, in most situations, agency or intermediary, due to all the costs of paying taxes, may turn out to be less than when using IP for the same transactions. Also, if you help someone with the housework, work as a nurse, sell your crafts or knitted hats via the Internet, then you absolutely do not need the IP status.

Summing up

• individual entrepreneur (IE) - a special status of an individual, giving him the opportunity to engage in commercial activities and not restricting other declared rights (for example, the same person can become a member of an LLC);
• they show reasonable interest in individual entrepreneurs both at the start of entrepreneurial activity and in the future, this status has a diversity in the possibilities for applying the taxation system, VAT allocation, simplified accounting and the like;
• the ease of closing an IP is a kind of bonus for those who are not confident in their business endeavors;
• IP has many advantages for mini-projects that are designed for small profits, turnovers and deadlines.

Registering an individual entrepreneur or LLC is your choice. The main thing is that the idea that was born and promises profit does not remain dead. Do it! It may not be a grandiose multi-million dollar project, but it will bring joy from small results and confidence in the future.

Starting businessmen, when registering their activities, are trying to figure out: an individual entrepreneur (individual entrepreneur), is it an individual or is it still a legal entity (LE)?

It is necessary to understand the terminology of the definitions of legal and natural persons (FL).

Entity

To understand whether an individual entrepreneur is a legal entity, one should understand the meaning of the last term. In the description of a legal entity, we are always talking about an organization that owns property and assumes obligations. She is responsible for them with all her property, according to the constituent documents. An organization can be a plaintiff or a defendant in litigation and have property or non-property rights.

A legal entity is an exclusive form of a registered group of people who have common interests, goals and objectives. The main characteristic of a legal entity is organizational unity.

Its essence lies in the creation of their own management systems with administrative bodies and a clear hierarchy. A legal entity has other important features:

• isolation by property;
• individual name;
• property liability.

Isolation by property is the presence of property in the company that does not belong to other people, including members of the organization or its founders. Ownership is secured on a different legal platform. Liability for property in legal entities occurs only within the funds amounting to the amount of the authorized capital.

Organizations must have a seal and a current account. The transfer of cash to other companies is limited for them. The amount cannot exceed 100,000 rubles. Also, legal entities are required to draw up a charter - constituent documentation describing individual powers and work procedures.

A legal entity has a large state responsibility in mandatory reporting for its activities, therefore many aspiring entrepreneurs prefer to limit themselves to the status of an individual entrepreneur at the first steps of business development.

Only a stable financial situation leads an individual entrepreneur to transform into an LLC or other suitable forms.

The essence of an individual

An individual is a person with a certain range of rights and obligations. One of the prerogatives of an ordinary citizen is economic activity. In this sphere, a person is equal in rights with other participants. Thus, the activities of an individual may be associated with:

• transport;
• trade;
• production;
• work on the stock exchange, etc.

An ordinary person can do business transactions, the conclusion of transactions, contracts and agreements. An individual can interact with legal entities. For this, it is not necessary to create organizations and enterprises.

Similarities and differences

Future merchants are usually concerned about the question: is an individual entrepreneur a legal entity? Consider the differences and similarities between LE and FL.

Common features:

• The need to pay dues and taxes.
• Accountability to a number of instances and the obligation to keep records of their activities.
• The ability to hire employees, with mandatory registration in accordance with labor legislation and the payment of wages with all necessary contributions to state funds.
• An individual entrepreneur has the right to open a current account. For an LLC that is a legal entity, this is mandatory.
• Both a company and an individual may have a seal to certify documentation.
• Violations economic activity individual entrepreneurs and firms are punishable, but the fines for individual entrepreneurs are less than for legal entities.

What is the difference between different types commercial activities?

Table comparing the characteristics of FL and YL.

Individual entrepreneur

The legislative definition of the concept of "individual entrepreneur" distinguishes in individual entrepreneurs individuals who are officially registered with the tax authority for doing business without specialized education of individual organizations and firms.

Russian law uses synonymous concepts: “private” or “without forming a legal entity”, but an active entrepreneur who has not formed a separate organization is an individual entrepreneur.

A simple conclusion can be drawn: an individual entrepreneur is not a legal entity. The rights and obligations of individual entrepreneurs are controversial, in order to make a decision on the registration of their activities, it is necessary to carefully study all the pros and cons of the statuses adopted.

The practical side shows that successful entrepreneurs always transform the activities of individual entrepreneurs into legal entities. This is justified in the application of taxation schemes, as well as in cases of certain encumbrances and liability for the activities carried out.

The status of an entrepreneur often raises a question, an individual entrepreneur is an individual or a legal entity, including entrepreneurs themselves who are going to “sell an individual entrepreneur” or “buy an individual entrepreneur” and take other actions that can only be done if the business is run by a legal entity. face.

Registration as an entrepreneur

That is, registration as an entrepreneur means for a citizen not only the right to engage in entrepreneurial activity, but also the presence of many duties that a non-entrepreneur citizen does not have. However, if a citizen decides to conduct entrepreneurial activity, then it is necessary either to establish a legal entity, usually an LLC, or to register as an entrepreneur himself.

The status of an individual entrepreneur in comparison with an LLC is attractive in that:

• it is easier and cheaper to register as an individual entrepreneur and terminate the activity;
• there are a number of advantages in terms of taxation;
• no need to keep accounting;
• business income is the income of an individual;
• penalties for administrative violations are often lower.

But the status of an individual entrepreneur has one significant disadvantage in comparison with an LLC. A citizen is liable with all his property (Article 24 of the Civil Code of the Russian Federation). And since the answer to the question, whether an individual entrepreneur is an individual or a legal entity, is unambiguous, then a citizen is also responsible for entrepreneurial activity with all his property.

This means that even after the completion of business activities, claims can be made against an individual, including by tax authorities.

All these points must be considered by an individual before he decides to register.

Advantages of IP status for taxation and income generation

What is the interest of registering as an individual entrepreneur? From the point of view of taxation, there is a definite plus - only entrepreneurs can apply the patent taxation system, which is characterized by the fact that only with a patent it is not necessary to submit reports and calculate the tax on their own. This will be indicated in the patent - the amount of tax and the due date. But the main thing is that you can find out the amount of tax in advance by calculating it on the website of the Federal Tax Service https://patent.nalog.ru/info/, and often the tax on a patent is lower than on a different taxation system.

Another significant difference when considering whether an individual entrepreneur is a legal entity is the right to dispose of business income. In an LLC, funds are the income of a legal entity, the founder can receive them only in the form of dividends, which can be distributed when making a profit. In addition, income tax must be withheld from dividends.

An entrepreneur, unlike a legal entity, does not have to report on the distribution of income received. All income from entrepreneurial activity is his personal income, which he has the right to transfer from the current account to his personal account and spend at his own discretion. Of course, it is necessary to pay tax on the income received according to the chosen taxation system. But, for example, if an individual entrepreneur applies a patent and fulfills all the requirements established by Art. 346.43 of the Tax Code of the Russian Federation, then he knows the amount of tax in advance and can immediately pay it. All income that will go to the account of the individual entrepreneur will be at his disposal and no additional actions will be required to formalize and distribute it.

Disadvantages of IP status

In addition to the mentioned liability with all property, registration as an individual entrepreneur entails the need to pay insurance premiums. Due to the fact that the individual entrepreneur pays for himself, low income, loss or lack of activity does not exempt from paying contributions in a fixed amount, which is at least 27,990 rubles in 2017.

In addition, it is impossible to buy or sell an IP business. If we talk about whether an entrepreneur is an individual or a legal entity, then unlike an LLC, where you can sell a 100% share in the company and the business will be transferred to another person, you can only sell the property of an individual entrepreneur, precisely because the entrepreneur himself is an individual .

According to the civil code of R.F. An individual entrepreneur is an individual who has the right to engage in commercial activities. The entrepreneur is liable for his obligations with all his property.

What form of business is sole proprietorship?

Many cannot figure out the organizational and legal affiliation of an individual entrepreneur: is it an individual or a legal entity? Answer to this question marked in Art. 23 of the Civil Code of the Russian Federation, according to which any citizen has the right to engage in labor activity as an individual entrepreneur without forming a legal entity.

The concept of a legal entity is interpreted differently: it is a registered organization (LLC) that has founders and authorized capital. Sole proprietorship conducts entrepreneurial activity without such.

It is worth noting that in many cases an individual entrepreneur is endowed with the same powers as an LLC. For example, he can also open a current account, enter into contracts and carry out almost the same activities, with the exception of some of them.

What is the difference?

Thus, each of the legal forms has its pros and cons, and any existing individual entrepreneur can register an LLC by contacting the Federal Tax Service with documents, but taxes and fees will have to be paid for all forms of activity.

Example: a citizen, being the founder of an LLC engaged in the manufacture building materials, decides to sell clothes through an online store. To do this, he has the right to separately open an individual entrepreneur, but he is obliged to pay taxes to the Federal Tax Service, contributions to the Pension Fund of the Russian Federation and OMS for both organizations.

In this case, asking the question - IP - this is a legal entity. face or ordinary physical. face? - it is necessary to proceed precisely from the form of business that a citizen conducts. When resolving litigation, filling out documents, filing reports from an LLC, it will be a legal entity, and from an individual entrepreneur - an individual.

Consideration of disputes in court

In accordance with the Arbitration Procedure Code of the Russian Federation, the Arbitration Court has the right to accept applications from organizations and individual entrepreneurs in the event of the following disputes:

• Economic: for example, about debts.
• Administrative: when conducting a business that is not legally registered.
• Organizational: bankruptcy of LLC.
• Tax: failure to pay advance payments on time.
• Corporate: when causing losses caused by co-founders, founders and participants to a legal entity.
• International economic: in case of default by a company registered in the territory of the Russian Federation, in relation to foreign citizen, or vice versa.

When issuing a decision on the imposition of penalties, the court has the right to be guided by data on the personal property of an individual entrepreneur. If a fine is imposed on an LLC, then arbitration can take into account only the authorized capital of the organization.

Due to the fact that an individual entrepreneur is a natural person, or an organization is a legal entity, then all conflicts and disputes between them fall within the competence Arbitration Court and are only permitted by the courts.

Addition

Do you still have questions about the nuances of the legal status of an individual entrepreneur or do you need a detailed expert consultation on another legal issue? The moneymaker factory recommends using the Lawyer online service to get professional advice from an experienced lawyer. (Getting the first response within 15 minutes after its publication).