Are you looking to start a business? To run a business, you need to choose a legal form of incorporation. Individual entrepreneurs and LLCs are the most common. Each form has its own advantages and disadvantages.
IP advantages
If we talk about IP, then this is the simplest form. For registration, you do not need to draw up a decision on creation or other constituent documents. It is easy to register an individual entrepreneur, the registration cost is low. The state duty for registration of an individual entrepreneur is only 800 rubles. In addition, when compared with an LLC, an individual entrepreneur does not need to create and pay for the authorized capital upon registration. When organizing an individual entrepreneur, you do not have to think about a legal address. You can use the address of registration as it.
It is known that bookkeeping takes a lot of time. For individual entrepreneurs, accounting is simpler. If in the future you no longer go to engage in entrepreneurial activity, it is much easier to terminate the activity of an individual entrepreneur than an LLC. If we talk about administrative offenses, fines are imposed on individual entrepreneurs in a smaller amount.
Remember, by registering an individual entrepreneur, you will not be able to engage in retail trade in alcohol. There is no such restriction for LLC. The individual entrepreneur bears property responsibility for its obligations. You can act on behalf of an individual entrepreneur only if you have a power of attorney certified by a notary. This is another difference between an individual entrepreneur and an LLC. If you want to take part in tenders, remember that individual entrepreneurs cannot always do this.
You will not be able to sell your business or buy a new one if it is an individual entrepreneur. Keep in mind that many clients prefer to work with an LLC, rather than an individual entrepreneur. LLC, from the point of view of psychological perception, is considered by many to be a more solid and reliable organization.
LLC advantages
If we talk about LLC, then a legal entity can be engaged in insurance and banking activities, the supply of electricity, retail trade and the supply of alcoholic beverages. The range of entrepreneurial activities is wider.
To organize an LLC, an authorized capital of 10,000 rubles is required. The participants of the LLC are jointly and severally liable, moreover, in the amount of the shares that they own. If the registration of an individual entrepreneur is carried out at the place of registration, then you can open an LLC in any region of the country. A power of attorney issued by a legal entity does not need to be certified by a notary.
Legal entities and individuals can take part in the creation of an LLC. In addition, LLCs are often jointly established. Foreign persons can take part in this process. Registration of an LLC is more expensive than registration of an individual entrepreneur. You will need more documents to open a company. Closing an LLC is more difficult than closing a sole proprietorship. It is best to sell or reorganize the business.
