Even if there is a time of hyperinflation in the country,ambitious people will not disappear from this. And even in the harshest conditions of the market, they will come up with ways to create, maintain and register their own businesses. And for sure in the future, as well as now, there will be a problem with such a difficult question, which is better - LLC or IP, pluses and minuses of organizations.
What is IP and LLC?
In the world of big business there are many organizations,the main specificity of which is entrepreneurial activity. But before turning into a big corporation, entrepreneurs start small - registering a PI or LLC.
IP, or an individual entrepreneur, is an entity that is registered as a participant in entrepreneurial activity, but does not form a legal entity, but has all its powers.
LLC is a legal entity, a limited liability company. Can act as a firm, company or corporation. All members of this company are responsible for the authorized capital.
IP and LLC have their advantages and disadvantages. Basically, they are related to obligations and the level of responsibility, but before deciding on what to begin with, it is worth exploring in detail the pros and cons.
Pros and Cons of IP and LLC
The table estimates the PIs and LLCs according tocriteria: registration procedure, taxation, reporting, accounting, use of profits, the risks of the founder, restriction of activities and the possibility of expansion.
A large package of documents and a settlement account are required
The procedure is less expensive and short-term
Taxation (minimum payout)
6% of profit
Types of reporting
Tax, statistical, accounting
The need for accounting
Use of profit
According to the order of conducting cash transactions
Debt obligations (material risks of the founder)
Entrepreneur risks only authorized capital, the amount of which is 10,000 rubles
Entrepreneur risks all property that will go to pay debts
Activities (restrictions by types)
There are no restrictions, the main thing is to get a license
Some activities are closed for IP
The possibility of expanding
These are the main differences. Next, consider more subtle nuances. Pros and cons of LLC and IP always attracted a lot of public attention, so it makes sense to consider them in more detail.
Registration and liquidation
Pros and cons of LLC and IP can be seen already inregistration time. The cost of the state duty for a limited liability company will be about 4000 rubles. With all this you need to have a solid package of documents, create a bank account and wait a few months. IP registration is much faster, easier and cheaper. Minimum of documents, 800 rubles. state duty and several weeks of expectations.
The same is true of liquidationenterprise. In order to liquidate a PI, it is necessary to write an application to the appropriate authorities and provide a receipt for payment of the state duty (the amount will be about 200 rubles). A few weeks later, a notification will come that the IP is excluded from the Single Registry. The organization of the case is more complicated, sometimes the liquidation process may take several months. Here one statement is indispensable. It is necessary to place an ad in a special magazine, pay employee benefits, fully pay off debts and provide liquidation and interim balances to the instances.
Taxes and profits
In general, the profit tax is the same, the pluses andThe disadvantages of LLC and IP begin with profit. An entrepreneur can freely dispose of all proceeds. To save, invest or spend at your own discretion.
Members of the LLC can not bypass the cashier and take backrevenue. In fact, all the profits that are received by the organization are spent on the internal needs of the enterprise, and payments are certified by protocols. Some entrepreneurs also have an IP to the LLC to be able to withdraw funds.
Accounting and reports
All legal entities must maintain an accountingreport. Without special knowledge, this can not be understood. If a person wishes to conduct his own bookkeeping independently, he should register the FE, as his participants are exempted from the obligation to maintain financial statements. In LLC, all the documentation must be correctly drawn up. This concerns not only the accounting report, but also the tax departments.
What is the risk of the founder?
Because of the unstable economic situation, enterprises can not always stay afloat, sometimes they lose their ability to conduct business and are forcibly disbanded.
Most LLCs or IPs are now startingDevelop through loans or private investment. In the event that an enterprise forcibly suspends its activities, the founder must pay all existing debts. Pros and cons of LLC and IP are hidden in material risks. LLC risks only property that belongs to the firm. Often these are goods, equipment or furniture. Moreover, LLC has authorized capital, which covers almost all debts.
With an individual entrepreneur such a trick is notwill work. According to the documentation, his property is not divided into "things for business" and "things for life", so if something unexpected happens, an individual businessman can take off his last shirt.
Still pluses-minuses between Open Company and IP disappear insuch a concept as development. Ltd. has the opportunity to expand. Hire more people, try yourself in a new market segment. The only condition is to legislate everything. In this regard, individual entrepreneurs are somewhat embarrassed. In some activities, only legal entities can take part. For example, a license to trade in alcohol IP can not be obtained. If the IP has found a person who wants to lead a joint business and participate in equity policy, he needs to re-register his business in LLC. A companion for an individual entrepreneur will not have equal rights with him unless he is also registered as an IP.
Starting your own business is always a risk, especially the opening of an LLC. Pros and cons of this procedure are as follows.
Pluses of registration LLC:
- Responsibility for obligations does not go beyond the authorized capital.
- A member of an LLC may withdraw from the firm if he sells or transfers his share to someone.
- Such a legal entity can be bought or sold.
- Specialists can conduct flexible tax planning, which will increase profits.
- Interests LLC represents both the director and the person entrusted to them.
Registration Minuses LLC:
- The registration and liquidation procedure takes a long time.
- Obligatory accounting and tax reports are required.
- The authorized capital must be at least 10 000 rubles.
- You need to have a seal.
- It is difficult to deduce the profit "past the cash register".
- If violations were observed in the activities of the enterprise, then the penalties will be higher than for the IP.
However, despite the frightening disadvantages, an increasing number ofthe number of IP passes to LLC. Someone opens organizations themselves, someone is looking for reliable partners, and someone buys limited liability companies.
Purchase of LLC
Often, organizations with limitedresponsibility is bought by those who value their own time and energy. Pros and cons of the purchase of LLC can be identified as follows. To positive factors it is customary to include such moments:
- The registration of the company will not need to waste time.
- LLC is already known in the market, which will help to achieve the location of customers.
- There are employees, production is adjusted, which means that the profit will be available from the first month.
- You do not need to spend too much effort on preparing the company for work, as there is everything you need.
Priorities for the acquisition of LLC are obvious, but there are also negative aspects:
- In case the firm showed itself from the worst side, it will take a lot of time, money and energy to regain a good reputation.
- It is often enough to encounter a problem withemployees. As practice shows, they may not be competent enough or accept new guidelines and simply leave. And to find them a good replacement, you have to spend a lot of time.
- There may be a problem with the equipment, which will result in new attachments.
It does not matter, LLC or IP, the pros and cons will alwaysto accompany any kind of entrepreneurial activity. A private entrepreneur is responsible for his personal property for debt obligations, an organization with limited liability - only authorized capital. This is the main difference between LLC and IP. Advantages and disadvantages can be found in registration and liquidation procedures, taxation, withdrawal of profit or documentation. Every entrepreneur should understand that there is a difference between these enterprises. LLC and IP? Pros and cons can be searched for a long time, and most importantly - to find. But, stepping on the path of business, the entrepreneur must first determine his own goals and opportunities and only then choose who to become - LLC or IP.