Individual entrepreneurial activity of citizens is the basis of the economic system, and the entrepreneur himself acts as the central figure in the economic and social life of the whole society. With few exceptions, all well-known politicians and scientists agree with this. Relations associated with entrepreneurship are represented by a special specific area of public life, which makes such relations an object of regulation on the basis of law. The special relations in the field of entrepreneurship may be evidenced by the fact that legal regulation covers all relations in this field. These are tax, labor, property, social relations. The individual entrepreneurial activity of a citizen is based on the desire to make a profit, while satisfying the social needs for the goods he produces, the services provided, and the work performed.
What is understood as individual entrepreneurial activity
Entrepreneurial law uses the concept of entrepreneurial activity, where the individual entrepreneurial activity of a citizen and collective activity are treated in the same way. That is, the interpretation for individuals and legal entities in this case is the same. Today, this very concept and its content are defined in the Civil Code of the Russian Federation (Article 2, Clause 1, Paragraph 3). The entrepreneurial activities of a citizen, the Civil Code of the Russian Federation (Article 23, Clause 3, etc.) are inextricably linked, since it is in the code that the equal conditions of legal relations for individuals and legal entities in the field of entrepreneurship are defined in accordance with the interpretation.
An entrepreneurial activity of a citizen is an activity carried out independently, at your own risk, the main purpose of which is to constantly receive income from various kinds of actions. Such actions include the use of property, the sale of goods, the performance of various works and the provision of services by citizens who are registered as entrepreneurs in the manner established by laws and regulations.
Since in the Civil Code of the Russian Federation (Article 23) the subjectivity of entrepreneurship is defined for citizens and legal entities, and the content of such a thing as entrepreneurial activity of a citizen of the Russian Federation is given but not disclosed, individual entrepreneurial activity of a citizen is considered to be the same entrepreneurship, but carried out exclusively individually.
The final definition will look like this:
- Individual entrepreneurial activity of citizens as individuals is an activity carried out independently, at your own risk and directly by a citizen who is registered as an individual entrepreneur without creation of a legal entity, in the manner prescribed by laws and regulations, and is aimed at the constant receipt of income from such actions as the use of property, sale of goods, the implementation of various works and the provision of services.
It should be noted that in accordance with Russian law the right of citizens to engage in entrepreneurial activity is defined, but the term citizen refers to any individual who is a subject in civil law.Accordingly, the entrepreneurial activity of foreign citizens also falls within the definition of individual entrepreneurial activity of a citizen.
Legal capacity of an individual entrepreneur
Legal capacity together with legal capacity determines the legal personality that is necessary for a citizen to carry out entrepreneurial activity.
The legal capacity of a citizen is his ability to have rights and bear responsibility, while fulfilling duties in civil society.
Legal capacity is automatically recognized by all citizens equally. It arises from the moment when a person is born, and ceases with his death. Legal capacity is general and is limited only in the manner established by the Civil Code of the Russian Federation (Article 22.1). General exercise of civil rights may be limited by the limits of permitted behavior established in the Civil Code. Certain actions aimed at causing harm to other citizens and all kinds of abuse of the law are not allowed. Using civil rights, competition cannot be limited, and abuses can be carried out using the dominant position in the market.
Any citizen with legal capacity can engage in entrepreneurship, but not every citizen can exercise this right. To exercise this right, a citizen must be legally capable.
Entrepreneurial capacity
The concept of citizen's legal capacity is given in the Civil Code of the Russian Federation (Article 21):
- The capacity of a citizen is his ability to exercise civil rights through his own actions, which is also manifested in the creation and execution of civil duties.
The main elements of legal capacity include:
- Dealability - the ability of a citizen to independently conclude transactions.
- Tort - the possibility of bearing independent property responsibility.
The citizen’s legal capacity comes after reaching the age of majority at the age of 18 years or after passing through the procedure of emancipation on the basis of the Civil Code of the Russian Federation (Article 27) from 16 years.
From the above it follows that individual entrepreneurial activity of citizens without the formation of a legal entity can only be carried out by capable citizens.
Capacity limitation can be used in cases where a citizen is abusing alcohol or taking drugs. Also, the restriction can be applied to minors, if there is no permission of the parents to engage in individual entrepreneurship, and to citizens with limited legal capacity.
Direct implementation of individual entrepreneurship
An individual entrepreneur in the Russian Federation can be either a citizen of Russia, a citizen of another state, or persons without citizenship. All actions carried out by an individual entrepreneur can be carried out only by him directly on his own behalf. In this regard, an individual entrepreneur must be registered with state bodies. In his activities, he uses exclusively his own labor.
Differences between individual entrepreneur and entrepreneur citizen
In accordance with the Civil Code of the Russian Federation, a citizen-entrepreneur can be both an individual and a legal entity, and an individual entrepreneur can only be an individual acting independently and not using hired labor.
Forms of individual entrepreneurship
Forms of entrepreneurial activity of a citizen are determined in a single individual form.
In an individual form, a sole citizen enterprise may be organized which acts as the owner of such an enterprise.Both the owner himself and his family can take part in the activities of such an enterprise, but in this case the functions of the owner and individual entrepreneur are combined in one entity, namely in the entrepreneur himself. Typically, a citizen's entrepreneurial activity in an individual form is applied where quick decisions are required. Most often, this is trade, where capital turns around the fastest. The individual form of entrepreneurial activity, due to the fact that all activities are carried out by the entrepreneur independently, requires a high level of professional training in various fields.
State registration of individual entrepreneurship
The citizen's right to engage in entrepreneurial activity must be confirmed by registration with state bodies. The sequence of actions is as follows:
- Appeal to the registration authority submitted by the Federal Tax Service of Russia.
- Obtaining a certificate of state registration.
- Obtaining licenses for certain types of activities subject to licensing in accordance with the law.
- Registration in funds that are extrabudgetary.
- Opening bank accounts.
Documents required for registration
An individual who wishes to become an individual entrepreneur provides the following documents to the registration authority:
- An application for state registration filled out and signed personally by a citizen. The application form is approved by the Government of the Russian Federation.
- Copy of the identity document of the main document.
- If the main ID document does not contain the date and place of birth, it is necessary to provide a birth certificate.
- A copy of the document giving the right to permanent residence in the Russian Federation for citizens of other states and stateless persons.
- Copy or original of a document confirming the citizen's place of residence.
- Notarized parental consent document for registration of minors.
- State duty receipt.
What can an individual entrepreneur do
An individual entrepreneur is allowed to engage in various types of activities that are not prohibited by law. Certain activities require a license or special permits. There are activities that are closed to individual entrepreneurship. All these issues are specified in the framework of the current Russian legislation and appropriate advice can be obtained during the registration of individual entrepreneurship.
Responsibility of an individual entrepreneur
In carrying out individual entrepreneurial activities without forming a legal entity, a citizen may be given civil, tax or even criminal liability. A citizen can be held liable when committing unlawful acts with intent or by negligence. The measure of responsibility is determined in accordance with the current Russian legislation, namely the Civil Code of the Russian Federation, the Tax Code, the Criminal Code, the Code of Administrative Offenses.
In what cases can an individual entrepreneur lose his status
The entrepreneurial activity of a citizen of an individual may at any time be stopped by him in accordance with applicable law for the following reasons:
- Decision-making about the termination of activity.
- The death of an entrepreneur.
- Judgment of an individual entrepreneur insolvent.
- The activity was stopped forcibly by a court decision.
- A court verdict prohibiting a citizen from carrying out individual entrepreneurial activity entered into force.
To terminate the activity, he must draw up an appropriate application at the registration authority at the place of registration and pay the state duty, as well as provide data on the termination of activity to the Pension Fund of the Russian Federation.
The role of individual entrepreneurship is highly appreciated throughout the world community in connection with its functionality and efficiency, the ability to instantly respond to the emerging demand for all kinds of goods, works and services.
