What is the difference between an LLC and an individual entrepreneur - which is better to choose for business. Advantages and disadvantages. Possibility of hiring employees

Before opening own business future entrepreneurs often wonder what organizational and legal form of activity to choose, what is better: LLC or individual entrepreneur?

In order to clearly make a choice, it is necessary to analyze the advantages, disadvantages and differences of each of these two organizational and legal forms.

In our publication today, we will consider not only the pros and cons, how an individual entrepreneur differs from an LLC, but we will also touch on the question of which organizational and legal form is suitable for such areas of activity as construction, online store, beauty salon and trade.

LLC and individual entrepreneur: defining the concepts

Before moving on to the advantages and disadvantages of an individual entrepreneur and a limited liability company, it would be a good idea to familiarize yourself with the definition of these terms.

An individual entrepreneur (IP) is a person who is engaged in activities for the purpose of making a profit without education legal entity. At the same time, the individual entrepreneur still has some legal rights. faces.

It is important to understand that an entrepreneur is liable with his property (including those not involved in business activities) even after the liquidation of the individual entrepreneur.

A limited liability company (LLC) is a legal entity that can be organized as a firm, company, or enterprise. An LLC is subject to liability within the authorized capital.

Now we propose to consider the differences between an LLC and an individual entrepreneur in the form of listing the pros and cons of both organizational and legal forms.

What are the advantages and disadvantages of IP?

The advantages of IP are:

simple procedure for registering an individual entrepreneur in tax office;
lower state duty for registering an individual entrepreneur than for an LLC (for an individual entrepreneur - 800 rubles);
absence legal address;
lack of authorized capital;
the possibility of using the patent tax system - one of the most loyal tax regimes;
availability of benefits on insurance premiums (fixed contributions that are not tied to income level, like for legal entities);
reduced tariffs for hired workers;
no need to maintain full-scale accounting (it is enough to keep a Book of Income and Expenses - KUDiR);
less reporting to tax authorities;
lower fines for the same violations compared to legal entities.

In addition to the above advantages, IP also has a number of disadvantages.

The disadvantages of IP are as follows:

restrictions on certain types of activities ( retail alcohol or banking);
Difficulties when it is necessary to expand a business - problems with counterparties, investors, loans;
low level of investment attractiveness;
liability with own property;
there is no possibility to sell (re-register) the individual entrepreneur;
the entrepreneur runs his own business;
the need to pay contributions to the Pension Fund, even in case of losses.

What are the advantages and disadvantages of an LLC?

When figuring out what is better to open: an LLC or an individual entrepreneur, one cannot help but consider the pros and cons of an LLC.

The advantages of an LLC include:

high level of protection of property rights (liability for debts is determined solely by the share in the authorized capital of the LLC);
the ability to create a business management body in accordance with the characteristics of a particular company;
the ability to expand the company by attracting investors (as new founders);
monitoring the degree of influence on production processes by increasing (decreasing) shares;
besides money, in charter capital You can also invest intangible assets;
the size of the authorized capital has no restrictions;
the possibility of attracting foreign investors;
at any time there is the possibility of leaving the list of founders (within 4 months - receiving your share);
the right to appoint a director to manage the LLC who is not its founder;
distribution of profits in any way (possibly disproportionate to the size of shares);
the ability to include in the charter a ban on the sale or pledge of shares (for persons who are not participants);
opportunity to sell (re-register) the enterprise.

Like an individual entrepreneur, an LLC has some disadvantages

The main disadvantages of LLC:

the number of founders cannot be more than 50 people;
complex business registration procedure;
a large amount of state duty for registering an LLC (4,000 rubles);
when the composition of the founders changes, the need arises to make appropriate changes;
mandatory maintenance cash discipline, tax and accounting;
dividends can be paid no more than once every three months;
recording of all business decisions made;
difficult financial situation due to the withdrawal of a participant;
liability for obligations (not personal property);
on OSNO - the need to pay tax on property used in the activity;
difficult and lengthy closing process compared to individual entrepreneurs.

Comparative table of LLC and individual entrepreneur

The difference between LLC and individual entrepreneur is clearly visible from the following table:

Comparison criterion
1. Opening (creation) procedure	Complex (notarized application, state fee, minutes of the meeting of participants, etc.)	Simple (application and state fee)
2. Constituent documents	Charter (a complex document that requires special knowledge when drafting)	Not required
	Required	Not required
4. Solutions	If there are several founders - accepted by a meeting of all participants	Accepted by the entrepreneur himself
5. Authorized capital	Needed (at least 10,000 rubles)
6. Responsibility	Determined by the size of the share in the authorized capital	Bears responsibility for its property even after liquidation
7. Use of proceeds	Distributed by the general meeting of participants	At your own discretion
8. Attracting investors	Loan agreements, simple partnership agreements and bills of exchange, sale of shares in the authorized capital and bonds	Loan agreements, simple partnership agreements and promissory notes
9. Joint conduct of activities	A maximum of 50 people can participate in one LLC	Association with other individual entrepreneurs on the basis of simple partnership agreements (joint activity agreements)
10. Restrictions on types of activities	There are practically no restrictions	Does not have the right to carry out certain types of licensed activities
11. Business expansion	Opening branches (subsidiaries) or merging with other companies	Increase in sales volumes
12. Selling a business	In any way using a notarial transaction (you can sell a share in the authorized capital)	By selling technology or trademark
13. Liquidation (closing) procedure	Takes from 4 to 6 months	Simple (required: application, state duty, certificate from the Pension Fund) within 5 days

And now we suggest you figure out what to choose: LLC or individual entrepreneur, depending on the intended types of activity.

Construction: LLC or individual entrepreneur?

When choosing an organizational and legal form for work in construction, you should pay attention to the specific area of activity in this direction. For example, if you plan to engage in capital construction, then would be better suited LLC, due to the fact that a lot of hired workers and equipment will be required.

For small repairs with a small number of workers, an individual entrepreneur will be more suitable. And if you want to work with several investors, then it is better to choose a closed joint stock company - investors do not often trust each other.

Beauty salon: LLC or individual entrepreneur?

What is more profitable: LLC or individual entrepreneur for opening a beauty salon? A beauty salon is a fairly broad concept that can include both a small hairdressing salon and an enterprise that provides a wide range of services (massage, fitness or solarium).

Individual entrepreneur is suitable for a small hairdresser (with several hairdressers). This establishment offers haircuts and hair coloring. If other services are added to the list of services (for example, a beauty salon) and the sale of products, this changes things significantly.

Thus, if the list of salon services includes a solarium and physiotherapy, then this is not subject to UTII, since it relates to health procedures. The sale of related products requires a license and then it is advisable to form an LLC, even if the beauty salon has one owner.

Online store: LLC or individual entrepreneur?

As a rule, when opening an online store, you choose the individual entrepreneur form. The taxation system is simplified tax system, if the activity does not require an office and many employees. Registration takes place at the place of residence. It is imperative to open an individual entrepreneur’s current account with a bank to make payments to customers.

In a situation where several people open one online store, it is better to give preference to an LLC. A legal address can be purchased if an office is not required. In any case, before opening an online store, you need to carefully consider all the advantages and disadvantages of LLCs and individual entrepreneurs.

Retail trade: LLC or individual entrepreneur?

For retail trade in small volumes, an individual entrepreneur is best suited. You will have to keep accounting records in any case. You also need to control the movement of goods and maintain a cash register.

When trading tobacco, cosmetics, perfumes and other licensed goods, the use of a cash register is mandatory. A cash register will be needed when selling any group of goods for cash.

In general, retail trade falls under UTII, provided that the area point of sale- less than 150 m². In this case, there is no need to pay VAT.

Let's sum it up

Thus, it is quite difficult to determine which is better - an LLC or an individual entrepreneur. The choice in favor of one of the organizational and legal forms must be made by the future entrepreneur himself, based on individual characteristics your business and prospects for its development.

In our article, we presented the advantages and disadvantages of LLCs and individual entrepreneurs, however, we can conclude that for a large form of business with subsequent business expansion, a Limited Liability Company is more suitable, and for a small-scale business, individual entrepreneurship.

In any case, before going to the tax office to register, think and slowly weigh the pros and cons for each of the legal forms. A successful start of a business is half of its success!

Starting your own business is considered a serious matter that requires making thoughtful decisions. One of the questions that newcomers to this business ask is what is better to open when creating a business: an individual entrepreneur or an LLC to provide services?

Businessmen make the main choice between these 2 forms of entrepreneurial activity. After all, other forms are either too complex (OJSC) or are not yet common everywhere (partnerships).

Therefore, entrepreneurs choose 1 of 2 options: Individual entrepreneurship or Limited Liability Company. The result of further business directly depends on this choice.

What is better to open when providing services: individual entrepreneur or LLC?

When opening a small business, many citizens of the Russian Federation wonder what is better to do - open an LLC or individual entrepreneur, what advantages and disadvantages such forms of ownership have.

Advantages of IP

The main advantages of this form of ownership are the following:

availability of a small number of reports. The reporting of an individual entrepreneur is less than that of a limited liability company;
You can write off all the fees that a businessman pays for himself. If a businessman works alone, then the financial authorities of the Russian Federation pay his personal contributions.

If an entrepreneur wants to provide certain services, then the amount of UTII (Unified Tax on Imputed Income), tax on the simplified tax system (Simplified Tax System) and OSNO (General Tax System) is 0;

you can apply the patent tax system (PTS). Only an individual entrepreneur can use PSN;
the entrepreneur uses a reduced rate of personal income tax (personal income tax) on the General tax system.

In the general tax system, an entrepreneur pays personal income tax at a rate of 13%, and a limited liability company - 20%;

the amount of penalties for an individual entrepreneur is much less than for such a Company;
low cost of registration. The state registration fee is 800 rubles;
package of documents upon registration. The list of business papers for registration includes a small number of documents that do not need to be notarized.

Besides, individual entrepreneur can independently manage the income received - use the proceeds for personal needs.
However, in an LLC, the organization’s income can only be spent on justified purposes. In this case, the businessman, being the founder of this organization, can receive dividends.

The head of the organization can pay himself dividends once a quarter - upon receipt of net profit according to accounting information. The entrepreneur pays 13% personal income tax on dividends.

This form of ownership has several disadvantages:

image losses. Although an individual entrepreneur has all the rights of a legal entity, enterprises try not to sign contracts with him.

It is believed that it is more reliable to cooperate with an LLC. After all, a Limited Liability Company is created when conducting a large business;

property risks. A businessman can legally lose all his property. For example, if he becomes bankrupt, then bailiffs can confiscate his car, garage building, TV, etc.

Doing business in most cases involves great risks. When bailiffs come to a businessman, he laments that he did not create a Limited Liability Company in a timely manner.

Advantages of LLC

A limited liability company has the following advantages:

image. Currently, various companies prefer to enter into transactions not with an individual entrepreneur, but with such an organization;
property risk and loss of authorized capital. At the same time, in some situations, a businessman, in addition to such capital, may lose his own property.

However, the share capital of the Limited Liability Company is 10,000 rubles, and this organization has no property. In this case, a businessman can only lose funds from the authorized capital during bankruptcy;

there are many founders. When creating such a Company, a partnership agreement is signed by several people. They have a certain share in the business and have equal rights in it. At the same time, none of the partners can deceive the other, which ensures the protection of the legal rights of each member of the organization.

An individual entrepreneur also has such legal protection, but his partners do not have all the rights.

Disadvantages of a Limited Liability Company

Such an organization has the following disadvantages:

a large number of reports. There are more reports maintained by such Societies than by individual entrepreneurs.

In most cases, when opening a Limited Liability Company, an entrepreneur is forced to hire an economist-accountant, because the director does not physically have time to keep all the reports. At the same time, the organization incurs many additional costs;

registration cost. The state registration fee is 4,000 rubles;
number of documents. The package of business papers upon registration of such a Company is significantly larger than that of an individual entrepreneur. The application for registration must be notarized, which leads to additional costs;
the amount of share capital established upon registration. When registering a Limited Liability Company, you must contribute 10,000 rubles to the authorized capital of the organization;
amount of fines. Penalties for a limited liability company are greater than for an individual entrepreneur. Moreover, penalties are also imposed on the head of the organization.

Different consequences

Any business, regardless of what form of ownership it has, closes over time. And not always because of bankruptcy, but for example, when opening a new business. To do this, it is necessary to close the Individual Entrepreneurship or liquidate the Limited Liability Company.

These procedures are essentially the same, however, the liquidation of a Limited Liability Company is longer than the closure of an individual entrepreneur. However, the presence of debts among individual entrepreneurs increases the period of closure of the organization.

The emergence of debt and the beginning of bankruptcy proceedings leads to the fact that when paying debts to creditors, the Limited Liability Company and the individual entrepreneur expose their property.

However, the entrepreneur loses not only the property of the enterprise, but also his own - a microwave, TV and other luxury items.

It is because of this factor that many newcomers to doing business are wondering how to close an individual business and create a Limited Liability Company. It is better to solve this problem in a short time.

As an individual entrepreneur, a businessman can create a Limited Liability Company. In the future, the businessman may close his status.

The business is also divided into several types of activities:

provision of services. If a businessman decides to provide services, then he must immediately register an individual entrepreneur;
conducting trade. If a novice entrepreneur wants to engage in retail trade in a store, then it is better for him to open an individual entrepreneurship.

However, if in addition to working in the store, the businessman will make deliveries of goods for various organizations, take part in tenders, it is better to open a Limited Liability Company.

Individual entrepreneurship is the start of a small business. In this case, a businessman is considered an individual, but has all the functions of a legal entity.

If a businessman wants to provide services to individuals, then it is better for him to become an individual entrepreneur, and he can easily conduct business. In particular, in order to engage in the sale of alcoholic beverages, during registration you can only indicate the permanent registration address of the businessman.

However, LLC managers need to indicate the real legal address. In addition, a Limited Liability Company must have its own seal.

A businessman can close or open an individual entrepreneur within 5 days. But for an LLC this procedure takes many months.

Restrictions on certain types of activities

Individual entrepreneurs do not have the right to engage in the following types of activities:

production and sales alcoholic drinks(except for beer drinks);
provide banking services;
work as a tour operator;
manufacturing of medicines, etc.

At the same time, by registering a Limited Liability Company, a businessman can conduct any business.

As a result, a businessman can choose either an LLC or an individual entrepreneur.

It is not possible to say unequivocally which of these 2 forms of ownership is better to choose when providing services.

Each businessman makes a choice of the most acceptable option for himself, which will better reflect all the specifics of doing business.

It is better for a newcomer to business to independently choose one of the 2 forms of ownership listed above, because in the future he will need to make difficult and responsible decisions.

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It is better to open an LLC or individual entrepreneur - perhaps this is the first question that everyone who starts their own business asks themselves. Each of these two forms of enterprise organization has its own strengths and weak sides for an entrepreneur, and for each it is different, it all depends on the specific conditions and on what goals and objectives the entrepreneur sets for himself and his business.

The whole mass of differences, pros and cons, to understand better than LLC or individual entrepreneur, we will divide into three groups: organizational differences, economic and a group of differences based on legal consequences. An entrepreneur makes a choice after carefully assessing all the differences, pros and cons of each form.

Organizational differences between individual entrepreneurs and LLCs

State registration fee

Individual entrepreneur – 800 rubles, LLC – 4000 rubles. The difference between an LLC and an individual entrepreneur is more than significant - opening an LLC is five times more expensive! An entrepreneur should immediately bear in mind that when working in the form of an LLC, he may have to face the need to make changes to constituent documents. There can be many reasons for this - a change in the number of founders, a change in legal address, the opening and closing of branches, etc. So, each such change must be registered with the tax service (registration and registration is carried out by the Federal Tax Service) and each time it will be necessary to pay the state duty - another 800 rubles.

Preparation of documents

When registering an individual entrepreneur, it is enough to write an application and present your passport. That's it - the IP is ready. Opening an LLC is somewhat more difficult. It is necessary to hold a meeting of LLC participants regarding its creation, prepare minutes of this meeting, and prepare a charter. If any property is contributed as authorized capital, prepare an assessment report for this property. All this must be submitted to the tax office upon registration. Of course, you can use the services of a law firm that deals with LLC registration: they will prepare everything for you. But you will have to pay for this - these are additional costs.

Stamp and bank account

An LLC must have a seal and a bank account. Making a seal and opening a current account – additional expenses. Although they are insignificant, at the stage of starting a business, this difference between an LLC and an individual entrepreneur can affect the choice of an entrepreneur. It is not necessary for an individual entrepreneur to create these business attributes. Although, of course, today it is difficult to imagine an entrepreneur working only with “cash”.

Authorized capital

It is not needed for IP. For an LLC you need at least 10,000 rubles. Although it is possible to contribute property to the authorized capital of an LLC, which will then be used in business. Moreover, this does not necessarily have to be some kind of industrial equipment: it could be a computer, cellular telephone etc. When contributing property to the authorized capital, you need to prepare a statement of its valuation, in which it will be written approximately as follows: “We, the founders of the LLC, are contributing a laptop to the authorized capital of the LLC and estimate its value at 10,000 rubles.”

Legal address

Individual entrepreneur is registered at the place of residence of the entrepreneur. IN LLC charter The legal address must be recorded. It can be a rented office, or you can use the address of one of the founders of the LLC.

Number of founders

An individual entrepreneur is the sole owner of a business. An LLC, unlike an individual entrepreneur, can be owned by several people, up to 50 (more - this will require registering a joint stock company). Moreover, the number of LLC founders may increase and decrease, but this will not affect the work of the company in any way.

Economic differences between individual entrepreneurs and LLCs

This is the largest group of characteristics in terms of quantity and the most significant in terms of consequences, based mainly on which the entrepreneur will choose: individual entrepreneur or LLC.

Activities

LLCs are not limited to this. An individual entrepreneur cannot engage in the production and sale of alcohol (beer and beer drinks can be produced and sold both wholesale and retail). An individual entrepreneur will not be able to organize a bank, an insurance company, an investment firm, nor will he be able to open a non-state pension fund or a pawnshop. An individual entrepreneur cannot be a tour operator (you can be a travel agent). To engage in the production of aviation equipment, pyrotechnics and weapons, as well as some other types of activities, you will also have to register something other than an individual entrepreneur.

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Withdrawal of money from business

For example, to spend on personal needs. If suddenly an entrepreneur wants to buy himself new car, apartment or go on vacation abroad, then, being an individual entrepreneur, he can easily take the required amount from the cash register or withdraw it from his current account and spend it as he pleases. The only limitation: the main thing is that there is no debt on taxes and mandatory fees, for example, to a pension fund. You can't do that in an LLC. It may seem that if the LLC belongs to the entrepreneur, then the money, accordingly, belongs to him, but in fact, all this money is the property of the company and can only be used for the purposes for which this LLC was created. The founder can use the LLC's money and spend it on any personal needs in two ways: 1. Receive it as dividends. But firstly, dividends are net profit LLC, accordingly, it is obtained only after paying income tax (20%). And secondly, dividends can be paid no more than once a quarter. 2. The founder can appoint himself as a director of the LLC and assign himself any salary, receive it and spend it. But he must pay part of the salary in the amount of 13% to the budget in the form of personal income tax, and also pay all social taxes for the entire amount of the salary (about 30%).

Attracting investments and loans

If a business needs additional financial resources for development, then individual entrepreneurs are very limited in this compared to LLCs. In fact, this is one of the important differences that you will have to pay attention to when choosing: individual entrepreneur or LLC. An individual entrepreneur can rely mainly only on his own funds, for example, on the money that a person saved before he decided to start his own business. For potential investors, individual entrepreneurs are, as a rule, not attractive. For development, an individual entrepreneur can, for example, borrow money from friends. Either use limited opportunities lending from banks: most likely it will be a small loan, for example, a consumer loan. Since individual entrepreneurs most often do not keep accounting records, banks will not be able to assess the financial position of individual entrepreneurs in the same way as they do in the case of an LLC: assessment financial condition, calculation financial indicators produced according to reports such as balance sheet, profit and loss statement, and cash flow statement Money and others that are in an LLC and not in an individual entrepreneur. Accordingly, individual entrepreneurs cannot count on serious financial support (investments and loans), but LLCs can. LLCs can also attract foreign investment, which is practically impossible for individual entrepreneurs.

Participation in tenders and government procurement

Providing services and supplying goods for government needs is for many companies good opportunity for development and a virtually guaranteed stable income. But for individual entrepreneurs, the opportunities to become a supplier to the state are very limited. Firstly, experience in similar work will almost always be required. Secondly, again reports: balance sheets, profit and loss statements and others, which in the vast majority of cases individual entrepreneurs do not have.

Tax system

Individual entrepreneurs and LLCs can choose any - regular, with payment of all the usual taxes, simplified, or pay UTII. The only difference here is that only individual entrepreneurs can switch to the patent system. Considering this difference between individual entrepreneurs and LLCs, it is necessary to remember that purchasing a patent is most suitable not even for small businesses, but rather for micro-businesses, which are mainly carried out by individual entrepreneurs.

Mandatory insurance contributions

IN Pension Fund and Foundation social insurance. For hired employees, individual entrepreneurs and LLCs pay these contributions only when there are employees and they are paid a salary (an individual entrepreneur can work alone, and an LLC may not pay wages at some periods for various reasons). However, the individual entrepreneur is obliged to make these payments at all times, even when he works alone and even when the individual entrepreneur does not work.

Branches and representative offices

An individual entrepreneur can work in any region of the country, he does not have to open a branch. But for an LLC, if you need to organize activities in another region, you will have to open a branch or representative office there and register with the tax service of that region. And this is, at a minimum, additional costs, albeit insignificant.

Cash discipline

LLCs are obliged to comply with it in full. Individual entrepreneurs do not need to comply with most of these rules. For example, individual entrepreneurs working under a patent may not apply cash machine. If in this case the buyer needs a document confirming the payment of money, the individual entrepreneur can issue him any receipt at his discretion.

Liability and fines

If an individual entrepreneur or LLC is fined for something (for violating the rules of cash discipline, for example, or for violating the deadlines for submitting a tax return), then they will be fined differently: individual entrepreneurs, as individual, and LLC, as a legal entity. For an LLC, the amount of the fine will be 10 times greater.

Legal differences between individual entrepreneurs and LLCs

Prestige and reputation

There is such a stereotype: they say that a legal entity, LLC, is more prestigious than a simple individual entrepreneur, that serious structures prefer to work with legal entities and do not like individual entrepreneurs. If we are talking about small and medium-sized businesses, then in general there is practically no difference. If we talk about a more serious scale, then it will be easier for legal entities, including LLCs. Government structures, foreign companies Indeed, they often prefer to work with legal entities. In fact, it all depends on the specific circumstances.

Property liability of the founder

In business, as in any area of life, at one moment something can go wrong: the business may go bankrupt, the finances invested in the business, including borrowed money from others, may not be returned. And from the point of view of property liability to other persons (counterparties, business partners, banks, investors, etc.), an LLC is more attractive compared to an individual entrepreneur. The fact is that an individual entrepreneur is liable for his obligations with all his property, regardless of whether this property is used in business activities or not. Moreover, the individual entrepreneur continues to be liable for its obligations with all its property even after the individual entrepreneur has ceased to exist: after closure, an apartment (except for the only one for living) can be taken away from the individual entrepreneur for debts, a car, money, valuables and everything else, due to which debts can be covered. The liability of the founder or founders of an LLC is limited by the size of the authorized capital; this stems from the very nature of the LLC - a limited liability company. The LLC is responsible to creditors only for what it earned and is on the LLC’s balance sheet: money, equipment, securities, etc. The founders are not responsible to creditors for anything except the contributed authorized capital. Most often, this liability is limited to a minimum amount of 10,000 rubles. But if suddenly the LLC goes bankrupt, and its money and authorized capital are not enough to pay all the debts, then the founder may have a subsidiary (additional) liability to pay off these debts, including at the expense of his personal property. But this can only happen when the founder gave the management of the LLC some instructions on commercial activities, which ultimately led to bankruptcy. That is, if the LLC went bankrupt due to the fault of the founder, and not due to ordinary commercial risks.

Selling a business

The founder of an LLC can sell his business to another person. To do this, changes will need to be made to the charter. For natural reasons, an individual entrepreneur cannot do this. LLC, as a business as a whole, can serve as collateral for bank loans. For the same natural reasons, an individual entrepreneur cannot be mortgaged to a bank.

Closing and liquidation

To close an individual entrepreneur, it is enough to pay the state fee and write an application to the tax office. The procedure for liquidating an LLC is much more cumbersome: you need to hold a meeting of the founders and prepare a decision on liquidation, issue an order to create a liquidation commission, appoint its head and members, who will deal with the liquidation. It will be necessary to publish an advertisement in a special publication “Bulletin” state registration» that the LLC is being liquidated. You will need to notify all creditors in writing that the LLC is in liquidation. Then an on-site tax audit will follow, when employees tax service at the LLC office they will study all tax documents. After this, you will need to submit not one, but two balance sheets to the tax office: an interim liquidation balance sheet and a simple liquidation balance sheet. Depending on the size of the LLC and the volume of its activities, its liquidation may take months.

Differences between LLC and individual entrepreneur in one table

To make it easier to decide whether an LLC or an individual entrepreneur is better, we will present all the differences in a convenient comparative table.

Signs and differences	IP	OOO
Organizational differences
State registration fee	800 rubles	4000 rubles
Documents for registration	Statement	Package of documents
Seal	Not necessary	Necessarily
Bank account	Not necessary	Necessarily
Authorized capital	No	Minimum 10,000 rubles
Legal address	Not required, individual entrepreneur at the place of residence	Required
Number of founders	1	Up to 50
Economic differences
Activities	Limited	Not limited
Withdrawal of money from business	Is not limited	IN pure form impossible
Investments and loans	Severely limited options	Wide opportunities for attracting
Participation in tenders and government procurement	Almost impossible	Maybe
Tax system	Any	Anything except patents
Mandatory insurance contributions	Yes: the individual entrepreneur always pays himself	No: if wages are not paid to staff
Branches and representative offices	You don't have to register	It is necessary to register
Cash discipline	You may not comply	Must comply
Fines	As for an individual	10 times more
Legal differences
Prestige and reputation	In the areas of big business they suffer	Do not suffer in all areas of business
Property liability of the founder	Not limited	Limited authorized capital
Selling a business, pledging it	Impossible	Possible
Closing, liquidation	Simple	Labor-intensive

In order to understand whether an LLC or an individual entrepreneur is better, an entrepreneur will have to carefully study all the above comparative characteristics, “try on” each of them for your future business. And the more carefully he does, the greater the likelihood of successful development. One is small, but true advice, which will help you choose whether an LLC or an individual entrepreneur is better: if an entrepreneur plans to start a small commercial activities in a small or medium-sized business, to earn money in order to provide for himself, his family, to be financially and not only financially independent, then he should pay attention to individual entrepreneurs. If the entrepreneur has more ambitious plans and the corresponding confidence, register an LLC.

“You shouldn’t delay with this, because a legal entity when doing business is not only about compliance with the law, but also about reputation,” says serial entrepreneur Artem Subbotin. He himself was involved in “business” from the age of 14: he was always buying and reselling something, but at some point he realized that it had ceased to be “hack work,” so he decided to register an individual entrepreneur. Now the entrepreneur has a stake in several LLCs, but Subbotin has already closed the individual entrepreneur.

But many are faced with a choice: to register as an LLC or an individual entrepreneur?

Key differences between individual entrepreneurs and LLCs

The main difference between these two forms of business registration is that an individual entrepreneur is liable for debts and obligations to creditors and counterparties with his personal property, and an LLC is only liable with its authorized capital. An LLC can be registered by several people who act as partners in a new enterprise, in contrast to an individual entrepreneur, where only one private person is the owner. The share in the business is distributed among the partners in proportion to the share of participation in the authorized capital of the organization. Let's say, if this amount is 110,000 rubles, and two of the partners contributed 50,000 each, and the third - 10,000, respectively, the first two will share 45.45%, and the third will receive the remaining 9%.

What role does the share in the authorized capital play? Firstly, it is the percentage of participation in an LLC that plays a decisive role in regulating the relationships of partners: for example, when making decisions on general meeting of the founders of the LLC, when voting, the founder has a percentage of total number votes equal to the size of his share. Secondly, the distribution of dividends, which is prescribed in the company’s charter, also depends on the size of the share.

Easy registration

To become an individual entrepreneur, you only need an application for state registration, a copy of your passport, a receipt for payment of the state duty in the amount of 800 rubles, and a certificate of registration of an individual with the tax authority. Typically, the entire process takes 5 days. Within a week after registration, the entrepreneur is obliged to independently register for tax purposes and present the relevant documents to the Pension Fund. In addition, an individual entrepreneur can work anywhere in Russia, even without an official seal and current account. But at the same time, he will be registered with the tax office exclusively at the place of registration, except in cases where the imputed tax scheme (UTII) is applied.

If you decide to create an LLC, you will have to tinker. Many people prefer to turn to third-party specialists for help, but the entire package of documents can be collected independently. Minimum size authorized capital - 10,000 rubles, but instead of “live” money it is quite possible to use securities and other property. However, for this it is necessary to attract an independent appraiser (the monetary value of non-monetary funds contributed to the authorized capital of the organization cannot be higher than that established by an independent expert), and also to obtain the approval of the remaining participants of the LLC. In other words, if you decide to contribute a laptop valued at 30,000 rubles as a share in the authorized capital of an organization, you cannot count on a share equivalent to 40,000 rubles, even if your partners agree with a higher valuation.

In addition to participation in the authorized capital, you will need to pay a state fee for registering a legal entity in the amount of 4,000 rubles, as well as prepare documents containing complete information about the location of the new enterprise (legal address), the number of founders (passport details of all participants), the amount of authorized capital and its distribution by shares between the founders. It is necessary to decide in advance on the types economic activity OKVED (what the LLC will do), choose a taxation system, and also take care of the presence of a seal and open a current account. The process can take from several days to a month: the preparation of documents must be approached with the utmost care and precision, since the tax office and the Pension Fund may return the documents if there is an error. However, today there are semi-automated services that, for a reasonable price, will help you prepare documents that comply with the standards when opening a legal entity.

“Opening an LLC is, of course, a chore: you need to prepare much more documents than when registering an individual entrepreneur,” Maxim Lagutin, founder of the B152 company, shares his experience. “Although with the advent of services such as Document Manager, the process has become simpler.”

What is more profitable - individual entrepreneur or LLC?

Any individual entrepreneur, even with zero reporting, pays an amount fixed by law to the pension fund. If back in 2012 it was 17,208.25 rubles, then in 2013 the amount increased to 35,664.66 rubles. For an LLC, accounting is required, which will most likely require the involvement of a specialist, which will result in additional costs.

In case of tax or administrative violations, the fine for an LLC will be many times higher than for an individual entrepreneur. Violation cash transactions, for example, will cost an individual entrepreneur 5,000 rubles, while an LLC mistake will cost a fine of up to 80,000 rubles. By the way, in addition to recovery from the company, recovery from the manager is also applied.

Taxes for individual entrepreneurs and LLCs

For individual entrepreneurs there are no restrictions on income and the cost of fixed assets under the simplified tax system. But for an LLC, the simplified tax system form is available only if the enterprise’s income does not exceed 60 million rubles. per year, the number of employees is no more than 100 people, and the residual value of fixed assets is less than 100 million rubles. But these numbers can change every year.

An individual entrepreneur can easily function without employees. In this case, he pays only tax on income from his business activities and fixed payments to the Pension Fund and the Federal Compulsory Compulsory Medical Insurance Fund.

But the activities of an LLC presuppose the presence of employees, which entails, in addition to taxes on income received, insurance contributions to extra-budgetary funds (PFR, FFOMS, Social Insurance Fund) from the amount accrued wages(a total of about 34%).

If you operate under the regular taxation system (OSNO), then the LLC can cover losses from previous years with current year profits and thus reduce income taxes. Individual entrepreneurs cannot take into account losses from previous years when calculating personal income tax.

Restrictions

An individual entrepreneur cannot engage in certain types of business: produce and sell alcohol, act as an insurer, operate pawn shops and be a tour operator. If your business is in one of the above areas, you should open an LLC.

On the other hand, an LLC, unlike an individual entrepreneur, cannot “take money out of the cash register” at any time. Despite the fact that since last year, individual entrepreneurs, like LLCs, have been required to keep records of cash transactions, individual entrepreneurs can withdraw all proceeds - cash and non-cash - without any reporting. But in the case of an LLC, this is much more complicated, because these are the company’s income, and they should be spent only on necessary needs that can be documented. Therefore, businessmen often set up an individual entrepreneur in addition to an LLC so that they can withdraw money from the account through it if necessary.

Prestige and reputation

An important factor when doing business is the name of the company and its reputation. “Many people still trust non-IP more,” says Maxim Lagutin. “Therefore, if you want to look more respectable in the eyes of clients, it is better to spend more time and create an LLC.” This is especially true if your customers are medium and large companies. From a rational point of view, this is not entirely justified, because dealing with an LLC whose authorized capital is only 10,000 is not the same as running a business as an individual entrepreneur, who is liable with all his property in case of failure to fulfill his obligations.

The fact remains: if your counterparties are large companies, it is better to choose an LLC.

In addition, an individual entrepreneur manages the business himself, while an LLC may have a director.

Ease of disposal

Closing an individual entrepreneur, as well as opening one, is much simpler: the entrepreneur simply submits an application for liquidation and a receipt for payment of the state duty (160 rubles) and a week later receives a decision on exclusion from the Unified State Register of Individual Entrepreneurs. True, an audit by the tax authorities is possible. But the liquidation of an LLC may take more than six months. The process is not only long, but also costly: it is necessary to submit an advertisement in a special magazine, pay off creditors, pay severance pay employees, submit interim and liquidation balance sheets. However, the amount of the state duty is the same as for an individual entrepreneur.

And more about LLC

Distribution of dividends in an LLC is possible at least once a quarter. These payments are subject to tax at 9%.

In addition, the LLC has the opportunity to sell its share. Thus, a founder who has participated in the LLC since its inception may decide to leave the business. In this case, he can sell his share to another person who will have the status of a participant, but with rights equal to the rights of the founders (corresponding to the share).

Total

“If you are a freelancer and your clients are small companies, then it is definitely easier and more profitable for you to register an individual entrepreneur,” explains Artem Subbotin. “There are virtually no risks, since you don’t take out a lot of loans, order volumes are rarely in the millions, and the documentation is extremely simple.” However, in the case of other types of business, such as small retail trade, provision of services, the entrepreneur also advises starting with an individual entrepreneur, because you can always open an LLC, but closing an illiquid enterprise is long and expensive. However, if you decide to immediately log into “ Big game“and invest significant funds in creating a serious business that you plan to scale, you must immediately opt for an LLC. However, the final choice is yours.

At the beginning of my entrepreneurial activity, I was faced with the question: which is better to open as an individual entrepreneur or an LLC? And I am glad that I made the right choice at the time.

In Russia it is impossible to just take it and get busy entrepreneurial activity. If you act without appropriate preparation, you risk coming to the attention of the omnipresent “competent authorities.”

What happens if you don't comply with state requirements and register? At a minimum, you will pay a fine of five hundred to two thousand rubles. But if your business is successful and the total amount of money passed through you exceeds one and a half million rubles, then you will face an article of the criminal code for illegal entrepreneurship.

To understand that registering to do business is not as difficult as it might seem at first, let’s consider ways of doing business in two options - by organizing a limited liability company and becoming an individual entrepreneur.

Individual entrepreneur or LLC, which is better to open, their main differences

become individual entrepreneur(IP), having received permission to engage in business, which is issued to him as an individual;
register a legal entity, namely – limited liability company(LLC), that is, a certain “virtual personality” on behalf of which he will do business. A legal entity has entrepreneurial status “by default”.

So, the main difference between an individual entrepreneur and an LLC is their legal status. – this is an individual, a person registered with the tax office as an entrepreneur; An LLC is a separate legal entity that has its own property, its own rights and its own obligations.

Here we will consider only the main differences between LLC and individual entrepreneur taxation.

Insurance premiums

Individual entrepreneurs must transfer funds to extra-budgetary funds (PFR, MHIF), i.e. contributions for health insurance and your future pension.

RUB 19,356.48 to the Pension Fund
and 3,796.85 rubles. to the Compulsory Health Insurance Fund.

The LLC does not pay these contributions, but makes similar contributions to the same funds for each employee.

Taxes

The amount of taxes paid does not entirely depend on the organizational or legal form, but on the chosen tax regime.

general taxation system (GTS);
simplified taxation system (STS);
unified tax on imputed income (UTII);
single agricultural tax (USAT);
patent tax system (PTS).

the patent system is not available to LLCs, only individual entrepreneurs can use it;
on the simplified system, single agricultural tax and single tax on imputed income, the rates are the same for all forms;
when working on common system There are differences in taxation - the income tax for individual entrepreneurs is 13%, and the income tax that replaces it for LLCs is 20%.

Payments for employees

Taxes and payments for their employees for individual entrepreneurs and LLCs are completely the same; the legislation of the Russian Federation does not distinguish between these organizational and legal forms.

Registration of individual entrepreneurs and LLCs, which is easier?

To assess which form to choose, consider the main differences between individual entrepreneurs and LLCs at the stage of creation and registration.

Documents required for registration

application for registration;
a copy of his passport;
receipt of payment of 800 rubles of state duty.

application for registration;
minutes of the meeting of founders, if there were several of them, or the decision on creation, if the founder is one person;
constituent agreement and charter of the LLC;
copies of the founders’ passports;
receipt of payment of 4,000 rubles of state duty.

In addition, after registering an LLC, you will need to deposit the authorized capital within 4 months - at least 10,000 rubles. Authorized capital for individual entrepreneurs is not required.

Legal address

renting or purchasing office space;
use of the apartment, i.e. home address of the founder;
purchasing a legal address at an entrepreneur support center or a specialized organization.

The choice of one method or another depends both on the financial capabilities of the founders and on the type of activity of the LLC.

If you are going to register an LLC, which requires the mandatory presence of premises, for example, you will be renovating household appliances or provide hairdressing services, it is better to use the first method. However, it should be taken into account that if a forced change of office occurs, changes will have to be made to the statutory documents.

If you are planning to provide advisory services and you do not need a special room, then the second and third options are quite suitable.

An individual entrepreneur is registered only at his place of registration. If a future individual entrepreneur has been working for a long time and lives in another city, then he will have to apply to the tax office using his registration. Such registration does not impose any restrictions on where the individual entrepreneur will work. Without any additional notifications or permits, he can provide his services in any region of Russia, but he will have to submit reports at the place of registration. However, with the help of Internet services this is now easy to do.

Features of hiring workers for individual entrepreneurs and LLCs

An individual entrepreneur can conduct his business without employees. If there is a need to hire employees, then it is easier to conclude with them not employment agreements, but contract agreements, paying a fixed amount and giving them the opportunity to pay all the necessary payments to the tax office themselves. If an individual entrepreneur still needs to recruit staff, he only needs to register with the tax office as an employer.

The LLC is registered as an employer immediately upon registration, because at least one employee must be present in it - its director. In the future, the responsibilities of employers for LLCs and individual entrepreneurs are the same.

Property liability of individual entrepreneurs and LLC participants

When choosing an LLC as an organizational and legal form, you must clearly understand that a legal entity has much more responsibility than an individual entrepreneur. In addition, according to the provisions of the Code of Administrative Offences, a fine can be imposed not only on the organization, but also on the responsible persons of the organization - the chief accountant and director.

But on the other hand, an LLC can only be liable for its obligations with its authorized capital and its property; its founders do not risk anything except the loss of this particular LLC. But an individual entrepreneur is always forced to answer with his own property, up to a car and an apartment.

Thus, it is impossible to say unequivocally what is better, an individual entrepreneur or an LLC. Each time the choice is unique, and you will have to choose the best option for yourself, which reflects both the characteristics of the business and the character of the businessman himself. In any case, when choosing an organizational form, only one piece of advice is effective: a novice businessman must decide for himself which form to choose, since only he will have to regularly make responsible decisions.