The simplest form of creating a legal entity in our time is a limited liability company. However, in some cases, it may be necessary to change the legal form of an enterprise to an even simpler one, without the formation of a legal entity, that is, registration as an individual entrepreneur. And the logical question arises, how to transfer LLC to IP, can this be done?
Advantages of IP and possible reasons for the conversion from LLC
Most people prefer individual entrepreneurs, as such enterprises have fewer requirements and attention from fiscal services. Registration of the IP itself costs almost a “penny” - about 800 rubles. Form of entrepreneurship allows you to work on a simplified taxation system, draw up a minimum amount of accounting documentation.
In addition, the businessman may not plan further development of the business, which exists in the form of LLC, but does not want to close it. In this case, the question may also arise, how can I switch from LLC to IP.
What is LLC
A limited liability company is a commercial enterprise with the formation of a legal entity and with the main goal of making a profit. Compared to the same individual entrepreneur, the LLC has a much higher status, and partners have more confidence in such a legal form.
One company can also create a company, this is not prohibited by applicable law. Although for the opening of a legal entity will have to draw up many documents, including the charter. The state registration fee is approximately 4 thousand rubles. The founder of the LLC will have to take care of accounting and tax accounting. In addition, it is necessary to form and pay the authorized capital, which should not be less than 10 thousand rubles. The upper bar is not limited and is determined by the statutory documents. The minimum amount of capital will have to pay in cash. At the time of registration, the authorized capital must be filled with a minimum of ¾. Capital is a guarantee for third parties that in the event of bankruptcy or liquidation, the LLC will be able to settle its debt obligations.
Legal requirements
At the level of legislation, there is no possibility of transferring directly from LLC to individual entrepreneurs. A limited liability company may be reorganized exclusively into another legal entity. An individual entrepreneur is an individual, therefore reorganization is not possible.
Options for solving the problem
The question arises whether it is possible to switch to LLC with an IP if a procedure at the level of legislation is not provided. In fact, if you act according to certain rules, you can carry out the so-called reorganization, without even attracting special attention from the regulatory authorities.
How to transfer LLC to IP - procedure:
- The founder is registered as an individual entrepreneur. Why do you just need to submit an application in form P26001 and a passport with the tax number of the applicant. Pay the state fee and after 5 working days get on hand the confirmation of registration as an individual entrepreneur.
- Dismiss or transfer staff from LLC.
- Renew property.
- Liquidate a legal entity.
Staff reduction
If the transfer of LLC employees is not planned in the IP, then the staff must be reduced.When deciding how to switch from an LLC to an individual entrepreneur, one cannot do without it, and so that penalties are not imposed, the entire procedure should be followed.
The Labor Code obliges the management of the enterprise to notify all staff about the forthcoming release before the reduction in two months. To do this, you will have to draw up written notifications and transfer them to all employees for signature. The reason for the reduction in this case is the liquidation of the enterprise.
In parallel with informing employees, it will be necessary to notify the employment service. After a two-month period, personnel are dismissed according to the standard procedure with the issuance of a work book and the full calculation of wages.
It should be remembered that with the simultaneous release of more than 15 employees, the reduction will be regarded as massive. In this case, the notification period is extended by another 1 month.
With the liquidation of the enterprise, you can dismiss everyone, even those on sick leave or on vacation.
And the most interesting thing is that the reduction procedure also implies the possibility of paying staff for 2 months after they quit, if the employees were not employed.
Transfer of employees to IP
In this case, normative acts do not provide for the ability to directly transfer personnel, which must be taken into account before moving from an LLC to an individual entrepreneur. To begin with, employees quit the company and the next day they are accepted by an individual entrepreneur. The procedure is standard and does not require additional explanation.
The main thing to keep in mind so as not to attract the attention of regulatory authorities is not to transfer all the staff on the same day, especially if there are more than 15 employees.
Property Transfer
Perhaps this is the most sensitive part of the question of how to switch from LLC to IP. The easiest way, of course, if the founder is one, and there are no claims of creditors, just go through the liquidation procedure and get all the property as an individual.
Another option is to sell or donate the most liquid property to an individual entrepreneur.
Sale LLC
Alternatively, you can sell the business. Naturally, it will first be necessary to withdraw all assets and transfer them to the benefit of an individual entrepreneur or an individual. If there is staff, then you will have to say goodbye to him, if necessary, take in an open IP. Now you can put up for sale LLC, more precisely, transfer corporate rights to a third party for payment or cede it on a free basis. The only thing is that no activity should be carried out at the LLC, and the balance should be empty, that is, in fact, the company will have to be prepared in advance for sale. By the way, a company with a “zero balance” can be closed at the initiative of the tax authorities, but provided that the absence of economic activity lasts at least 12 months.
Reverse situation
Along with how to switch from LLC to IP, many people are interested in the opposite question.
If we consider the terms, then an individual entrepreneur is an individual. LLC is a legal form with the formation of a legal entity, therefore, there is no possibility of reorganization.
The transition from LLC to IP and vice versa is not provided for by applicable law, but there is always a way out, and not even one:
- close the IP and create a legal entity;
- enter a participant into an existing LLC;
- without closing your IP, open an LLC and become its sole participant.
Common problems with renewal
The biggest problem that most people forget before converting an LLC into an IP is that they have borrowed funds or other debts. But the liquidation procedure provides for a clear line for the satisfaction of claims.
Debt repayment sequence:
- all claims to individuals that have arisen against the background of causing harm to their health or life are paid off;
- all wage arrears are paid;
- repayment of debts to the state;
- meeting the requirements of all other creditors.
Most importantly, until the requirements of one line are fully paid, payments will not be made to other creditors. The only exception is if the debt is secured by a pledge, then borrowers have a preemptive right to pay off debts, with the exception of persons in the first and second priority.
Another common problem is the availability of funds in the hands of the founders, which were taken from the company under the report or as a loan. What to do in such a situation, is it possible not to return the funds? It is possible, but only in this case will have to pay income tax on these funds, and if it comes to a large amount?