The legal status of an individual entrepreneur is whether the entrepreneur is a legal entity. Is the IP an individual or a legal entity? Individual entrepreneur

The Civil Code of the Russian Federation and other legislative acts give a clear definition of the concepts of a legal entity and an individual entrepreneur. They have their own characteristics.

Main similarities and differences

To understand the difference between the concepts of an individual entrepreneur and a legal entity, you need to understand the legal nature of these definitions.

Under IP means an individual who carries out his activities independently and on his own behalf, as well as duly registered.

Entity- an organization that has separate property and is independently responsible for its obligations.

These two concepts are united only by the fact that both conduct business activities, but they are different in the registration procedure, structure, taxation and other legal aspects.

Individual entrepreneurs are registered under the full name and at the place of residence, and the legal entity also has a legal address, which is indicated during the registration process.

The main difference between an individual entrepreneur and a legal entity is that the latter has the Constituent documents or the Charter, within the framework of which it operates. Any changes must be made without fail. An individual entrepreneur, on the other hand, has a freer form of business, changing which does not require a procedure for revising the Charter.

The disadvantages of the IP business system in comparison with the legal entity include:

• limited types of activities (license), for example, the first one cannot be engaged in both retail and wholesale sales of alcoholic beverages, medicines, etc.;
• personal participation of an individual is required; no one has the right to represent the interests of an individual entrepreneur.

The status of a legal entity implies the presence of an executive body that is actually involved in the management and activities of the organization. A sole proprietorship is managed by the individual who created it.

The address (place) of location of a legal entity is recognized legal address specified in the registration documents(often occurs when the specified address does not match the real location of the company). Registration of the location of an individual entrepreneur is carried out at the place of residence of an individual or at the place of his stay.

The reorganization of the business of an individual entrepreneur in comparison with a legal entity also has a range of benefits. To change the necessary data, you must provide an application and a document (its copy) confirming their change.

Rights of a legal entity

Any participant in legal relations has a set of rights and obligations. Legal entities have civil rights that correspond to the goals of their activities. This set of rights is spelled out in the Charter document. Restriction in legal capacity can only be by law.

Status of an individual

A natural person is a citizen who has the corresponding rights and obligations. He acquires them from the moment of birth and uses them all his life. One of these rights is, after which laws are applied to the citizen regarding the activities of an individual entrepreneur, as well as any others relating to individuals separately.

Why there is confusion in terms

Firstly, from the definition of an individual entrepreneur it is already clear that this is an individual who is responsible for his obligations on his own. That is, everything is assigned to a certain person, which cannot be said about a legal entity, where the firm bears all responsibility. The confusion is due to the fact that the IP has the same attributes as a legal entity, namely, a seal, a current account, etc.

Cases when an individual entrepreneur acts as a legal entity

Despite the obvious differences between the two concepts, there are options in which the actions of an individual entrepreneur are similar to a legal entity. Such cases include:

1. Hiring workers.
2. Opening bank accounts and using them for business purposes.
3. The use of seals to authenticate documents.

Pros and cons

The advantage of an LLC is that none of the founders bears the full liability for the company's obligations. For example, compensation for losses is determined in the amount of the share contributed by the founder to the authorized capital of the company.

If the LLC is declared bankrupt, the recovery of debt obligations is applied only to the property contributed by the founder to the fund of the company.

Sole Proprietor as a person directly engaged in business, fully responsible for all debts formed during the working period. At the same time, debt collections are levied on all property belonging to the individual entrepreneur, with the exception of property that is not subject to arrest and circulation to pay off the debt.

In addition to all of the above, an individual has the right to bequeath all his property to another person.

In daily activities, individual entrepreneurs and LLCs can use various tax regimes. First of all, this is a general taxation system, which is mainly used by enterprises due to the large turnover. Also, individual entrepreneurs use other special taxation regimes: simplified, imputed, patent.

Any of the above systems implies taxation on profits received as a result of economic activity.

In addition, businesses are required to pay other additional taxes and fees depending on the type of activity. Among them are:

• gambling tax;
• tax related to excisable goods;
• fee for the use of subsoil;
• fee for the use of objects of flora and fauna, etc.

Enterprises pay additional taxes and insurance premiums from the wages of employees.

A tax withheld from an employee's wages is income tax. For citizens of the Russian Federation, the rate is 13%, for foreigners - 30%.

Insurance premiums are divided into the following types:

• pension fund (PFR);
• compulsory medical insurance fund (FMS);
• social insurance fund (FSS).

The contribution rate is 22%, 5.1% and 2.9% respectively.

An individual, when using the general taxation system, pays:

• business income tax;
• property tax if it is used in business;
• value added tax.

Also, an individual pays other mandatory contributions: health insurance, pension fund, insurance fund.

The legislative framework

At the legislative level, registration is regulated by the Federal Law "On State Registration of Legal Entities and Individual Entrepreneurs", the Civil Code, decrees of the Government of the Russian Federation, and other regulatory legal acts.

Learn more about LLC and IP in this video.

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, those who planned to become a businessman have a huge number of 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 these are foreign analogues of a 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 a high level of popularity in the business sector. 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 types perform different functions and provide different capabilities. 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 not with the differences in the application of various regulatory documents that regulate the activities of an individual entrepreneur or any legal entity (LLC, JSC), but with 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 opportunity 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 the general director. 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. As a rule, most of the tax and financial benefits of individual entrepreneurs, 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 the general system (OSNO - 20% for LLCs and 13% for individual entrepreneurs), as well as in 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. His entrepreneur is unlikely to 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 large companies that are "Endees" (as they say in certain circles) can be difficult for those who do not allocate value added tax and are not registered as its payers.

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 accustomed statements of Internet experts by no means give a general picture. Study the equipment before making a decision.

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

• Question: Why do many people 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 reach a larger number of potential buyers, 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. In a 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, an individual entrepreneur, as an ordinary 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 household plots, summer cottages or in personal subsidiary plots. To do this, you only need a certificate from the administration of the gardening 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 customers;
• 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 engage in 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 of economic activity by individual entrepreneurs and firms are punishable, but fines for individual entrepreneurs are less than for legal entities.

What is the difference between different types of commercial activities?

Table comparing the characteristics of FL and YL.

Individual entrepreneur

The legislative definition of the concept of "individual entrepreneur" singles out in IP 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 the formation of 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.

Conducting entrepreneurial activities by a person who has not passed state registration is prohibited in Russia. But before choosing the organizational and legal form of a business, it is worthwhile to figure out - is an individual entrepreneur an individual or a legal entity?

What is the difference between individuals and legal entities?

The procedure for registering individuals and legal entities doing business varies significantly. To understand whether an individual entrepreneur is a legal entity, one must understand the definitions given by the legislation.

• Citizens (individuals) and legal entities acquire and exercise their civil rights of their own free will and in their own interest (Article 1 of the Civil Code of the Russian Federation).
• A citizen has the right to engage in entrepreneurial activities without forming a legal entity from the moment of state registration as an individual entrepreneur (Article 23 of the Civil Code of the Russian Federation).
• Upon state registration of an individual as an individual entrepreneur ... (Article 22.1 of the Law of 08.08.2001 No. 129-FZ).
• A legal entity is an organization that has separate property and is liable to them for its obligations (Article 48 of the Civil Code of the Russian Federation).

From these provisions it is absolutely clear that the question of whether an individual entrepreneur is a legal entity should not even arise.

An entrepreneur is an individual, and an individual is a citizen or a person with a certain legal and legal capacity. After this, an individual can independently engage in business and dispose of the income received from it. Moreover, this business exists as long as a citizen is registered as an entrepreneur. After the individual entrepreneur is removed from tax records, the business entity ceases to exist.

A legal entity or organization does not depend on its founders, whose composition may change completely. Shares in the authorized capital of a legal entity are sold, inherited, donated or pledged. An organization can be fully redeemed as a property complex and continue to exist without its original creators.

And yet, there is some confusion in the concepts of an individual and a legal entity. It was caused by Article 23 of the Civil Code, which states that the rules governing the activities of legal entities are applied to the entrepreneurial activities of citizens. Thus, although an individual entrepreneur is undoubtedly an individual, the same rules can apply to him as to commercial legal entities.

Administrative responsibility of an individual entrepreneur

It is especially important to understand whether an individual entrepreneur is a legal entity within the framework of administrative responsibility. Why is this so special?

If you open the Code of Administrative Offenses, then in many articles you can see that fines for organizations are several times higher than for individuals. Take for example a typical violation - the sale of goods or the provision of services in cases where this is established by law.

Article 14.5 of the Code of Administrative Offenses of the Russian Federation specifies the following sanctions:

• for citizens - from 1,500 to 2,000 rubles;
• for officials - from 3,000 to 4,000 rubles;
• for legal entities - from 30,000 to 40,000 rubles.

Who in this case is an individual entrepreneur - is it a legal entity or an individual (citizen)? Neither one nor the other, because the status of an individual entrepreneur in administrative legal relations is an official, equal in responsibility to the head of the organization.

An indication of this is spelled out in article 2.4 of the Code of Administrative Offenses of the Russian Federation. However, a reservation is also made here that the entrepreneur is equated with an official, unless otherwise provided by the Code. And indeed, there are such norms where special responsibility is provided for individual entrepreneurs.

For example, in article 14.1.2, the fines for carrying out entrepreneurial activities in the field of transport without a license are:

• for citizens and officials - 50,000 rubles;
• for individual entrepreneurs - 100,000 rubles;
• for legal entities - 400,000 rubles.

Thus, answering the question - is an individual entrepreneur a legal entity in administrative legal relations, we can say a firm "no".

Features of the IP employer

Not so long ago, the question of whether an individual entrepreneur is a legal entity was not of interest to future businessmen, but to employees. The fact is that individual entrepreneurs received the right to conclude employment contracts and draw up work books only in 2006. Accordingly, employment in organizations gave employees more rights than employment with individual entrepreneurs.

Interestingly, the Labor Code still contains additional obligations for employers-legal entities, as more solvent business entities. So, article 178 of the Labor Code of the Russian Federation obliges to pay severance pay to employees upon dismissal due to staff reductions only for organizations. It turns out that although an individual entrepreneur basically bears the same obligations as a legal entity, there are still some indulgences for him.

Entrepreneur in tax law

Tax legislation treats individuals and legal entities more fairly, calling everyone equally taxpayers. If we talk about the amount of fines for tax offenses, then they are the same for individual entrepreneurs and for organizations.

And yet, there are certain privileges for entrepreneurs here too. In particular, individual entrepreneurs do not keep accounting records, which means they can do without an accountant. In addition, there is a special preferential tax regime (PST), which is available only to individuals. And, finally, tax holidays with the possibility of not paying taxes for two years are also provided only to individual entrepreneurs.

Summing up

1. Despite the fact that in some situations the law equates the rights and obligations of individual entrepreneurs to commercial organizations, the answer to the question: “Is an individual entrepreneur a legal entity?” - negative.
2. An individual entrepreneur is an individual who has been registered with the IFTS and has received the right to run his own business.
3. An individual is an ordinary citizen, so his entrepreneurial activity continues until he is removed from the tax register. It is impossible to sell or donate an individual entrepreneur as a legal entity.
4. In administrative legal relations, when collecting fines, an individual entrepreneur has the status of an official, unless certain articles of the Code of Administrative Offenses of the Russian Federation indicate otherwise. As a rule, fines for individual entrepreneurs are several times less than for legal entities.
5. As an employer, an individual entrepreneur is not much different from a legal entity, however, organizations have more responsibilities to employees.
6. The Tax Code practically equalizes taxpayers of legal entities and individuals, however, it must be admitted that organizations fall under tax control more often than entrepreneurs. In addition, individuals, when doing business, enjoy additional tax benefits that are not available to legal entities.

IP - is it a legal entity or an individual? What is known about the status of an individual entrepreneur? The Civil Code of the Russian Federation (Article 23, paragraph 1) allows a citizen to conduct entrepreneurial activities without forming a legal entity. Upon passing state registration, an individual becomes the owner of the business, but not a legal entity.

Is the individual entrepreneur an individual or a legal entity?

As was Pyotr Sergeevich Bochkin, he remained. No JSC, LLC, CJSC and other companies did not arise, but IP Petr Sergeevich Bochkin appeared. And just a couple of lines later (Article 23, paragraph 3), the same Civil Code of the Russian Federation practically equates a citizen to a legal entity in terms of the rules binding on commercial organizations.

True, there is a clause "unless otherwise follows from laws or other legal acts." It is in this reservation that the meaning of the question under consideration is contained. If specifically for individual entrepreneurs, legislators came up with and adopted a certain law, then a difference from “firms” immediately appeared. And, I must say, they have already come up with a lot! But first things first.

Sole proprietor - individual who has the right to conduct business activities, and at the same time bears responsibility in accordance with the laws adopted for him. It cannot be equated with a legal entity, for which the norms and rules are their own. Sometimes these norms may coincide, but you still need to be guided by regulations that clearly establish the link “for individual entrepreneurs”.

To begin with, let's figure out how our new Petr Sergeyevich differs from his former self? He was an individual - and he remained. Only before that he could not sell goods in his store, offer taxi services, shoemaker, renovate apartments and do much more on a commercial basis. It would be .

The Civil Code gave a clear definition of entrepreneurship: it is an independent activity carried out at one's own risk, aimed at systematic profit.

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Two points are important: consistency and profit. As an individual, it is not forbidden for a person to install air conditioners for everyone at least every day, but for free. Or once a year, "help a neighbor" for some reward. Then there will be no complaints from the regulatory authorities. But if you install air conditioners and take “money” (or other remuneration) for this, then registration as an entrepreneur is required in order to register with the tax service and insurance funds, keep records, pay taxes and contributions, etc.

Now let's talk about the rights and obligations of an individual in comparison with the rights and obligations of an LLC: what do they have in common, what are the differences, in what.

What is the difference between an individual and a legal entity?

Similarity of natural and legal persons:

1. Obliged to pay taxes and insurance premiums.
2. Maintain records and report to relevant authorities.
3. An individual entrepreneur, like an LLC, has the right to hire employees. He draws up employees according to the Labor Code, pays wages, and observes the rules of labor discipline.
4. An individual as an individual entrepreneur has the right to open a current account. Organizations must open a bank account.
5. An individual entrepreneur can have a seal with the necessary attributes, just like a society.
6. Penalties are provided for violations for both organizational and legal forms. For the same offense, an individual entrepreneur will be fined less than an LLC, but you still have to pay.

Differences between an individual and a legal entity:

1. LLC is a legal entity that is independent from the moment of its registration. The founders may not interfere further in the firms, the company then acts only in accordance with the instructions of the director. In case of problems of the LLC, the founders are liable only in the amount of their share in the authorized capital (sometimes they are held liable, but rarely). Otherwise, the company is responsible for its obligations only with its own assets (money in the current account, property, etc.).

An individual entrepreneur is responsible to creditors, the state and other interested structures with all his property. And what is used for business, and what is his personal property, in no way connected with the business. Of course, the only housing will not be taken away to pay off debts, but he risks not only shop windows and carts for buyers, but his own car for trips to the country.

2. A limited liability company is registered. A rented office, owned premises, personal living space ... IP is registered only at the place of residence. You can conduct activities anywhere, but registration is only in the IFTS that corresponds to the registration. incomparably simpler: no need for authorized capital, legal address. , passport, and in three days there will be more for one businessman.

3. For individuals, the law also provides for a special tax regime - a patent. A legal entity cannot, the PSN is not applicable to it. The patent facilitated accounting and reporting.

4. An individual entrepreneur, even if he works alone, without employees, is obliged to pay. These contributions are fixed. Companies pay contributions only for employees. But there is a consolation: in some tax regimes, it is possible to reduce the tax due to the paid insurance premiums. The main thing is to approach the issue carefully and responsibly.

5. For an individual, while a legal entity can do almost everything. For example, you can’t produce alcohol and sell it (), while the LLC quietly acquires a license and works.

6. What is really good about an individual entrepreneur is that he can freely dispose of all the money received from the business! When , it is enough to indicate “income of an individual entrepreneur” in the purpose of the payment. At the same time, no bank will refuse this transaction. But it is not so easy for the director of a legal entity to withdraw money: either for the expenses of the company (documented), or for salaries, or for dividends. Accounting is very strict, and the bank does not always satisfy the requests of the manager.

7. Individuals do not submit financial statements, and the terrible word "balance" is unknown to them. At the same time, tax reporting, cash discipline rules and reporting for employees are common, whether you are a legal entity or an individual entrepreneur.

8. If the idea to “sell the business” arises, then it is enough for the LLC to change one founder for another. You cannot sell individual entrepreneurship, you have to.

9. An individual entrepreneur may have two different bank accounts: an account of an individual and a current account. According to the first, transactions related to personal needs are carried out, and according to the second, only transactions related to entrepreneurial activity. For an LLC, such a situation is impossible in principle.

If it’s simpler and without a lot of letters, here is a short but informative video:

Now you know, what is the difference between an individual and a legal entity, and that an individual entrepreneur is an individual authorized to conduct business. We also wrote a separate article. If you still have questions, ask them in the comments - we do not delay with an answer!