Individual Private Enterprise (PPI): registration, advantages and disadvantages

Entering a fascinating economic game called “small business”, novice businessmen are primarily interested in such a form of entrepreneurship as an individual private enterprise.

Let's see what such a company is, what types of activities it can engage in, what its advantages and disadvantages are. Consider also the procedure for registering an IPP: how to open it, what important points to take into account.

According to the Civil Code

Previously, such a legal form of the company as an “individual private enterprise” was enshrined in law.

The business of this variety could belong to one person or family members. The name was required to contain the name of the owner.

Currently, every eligible citizen of Russia has the right to open a private company, having registered with the tax authorities as an individual entrepreneur.

With this form of business, its owner alone makes any decision, disposes of the property and makes a profit. He also bears full responsibility for the obligations of the company.

It’s easiest to start a small business by registering IP

Despite the fact that small business is the basis of the economy of any country, it is the owners of tiny shops, stalls, miniature ateliers, shoe repair shops and food outlets that are the most difficult. Often, the tax and inspection authorities make the same demands on them as on the owners of large “factories, newspapers, ships”.

Desiring to reduce the risk of losing their own property (apartment or car), some novice businessmen seek to register a limited liability company immediately. Such a step is not always justified in terms of time and financial costs.

Before starting a new business, it is important to carefully analyze all the pros and cons of an individual private enterprise.

Let's talk about the merits

Even when “eyes are afraid,” hands will do exactly what is required. The advantages of a private individual enterprise begin with the fact that it is very easy to open. To do this, you do not need to get a higher legal education or contact expensive specialists.

So, we list the main advantages of this particular form of business:

1. Registration of an individual entrepreneur is very simple. To implement this procedure, it is enough to prepare a passport, fill out an application and pay the state fee. After 3 working days you can get your personal small business under management.
2. To start a business in the form of IP, you do not need to have funds to contribute to the authorized capital. It is also not required to register the legal address of the company: the business is located at the place of registration of its owner.
3. The owner of the PPI receives, as a rule, preferential services and discounts at banks. To open a current account, a minimum package of documents is provided, including: passport, certificate of registration, TIN, extract from the unified registry, certificate of codes from statistical authorities.
4. An individual entrepreneur who has installed cash registers at retail outlets is not required to spend money on making a seal. Here, however, it is important to make a reservation that a name stamp will still be needed if you plan to hire employees or work on government orders.
5. In some cases, an individual private enterprise can do without cash registers.
6. A great advantage is the ability to use special, economical tax regimes.
7. An entrepreneur is not required to report to third parties (except for state bodies, in accordance with the law) on the status of his affairs. An individual private enterprise differs from a joint-stock company in that it does not need to publish publicly available information on profit and loss, the value of property, and loans and credits received. All this information is a trade secret.

disadvantages

Despite the apparent ease of maintenance business, small business It is associated with a number of serious risks and inconveniences:

1. The owner of the PPI is personally responsible for all the obligations of the company. Even if the company is liquidated, its owner is obliged to repay debts to partners, to pay loans and loans that the company received.
2. Family members (spouse and adult children) are also liable for the obligations of an individual entrepreneur. They will be required to repay the debt even if they themselves did not participate in the business. The court may decide on the sale of any property of the family to repay debts.
3. An individual private enterprise cannot be bought, sold, donated.
4. It is difficult to apply to IP general taxation system: due to the loss of the previous year, one cannot “understate” the profit of the current period.
5. Most legal entities are not too comfortable working with entrepreneurs and purchasing goods from them, due to the inability to receive invoices for VAT refunds.
6. Regardless of the fact of doing business, an individual private enterprise is required to pay contributions to the Pension Fund.

Which companies are usually registered in the form of an "entrepreneur"?

Such a business organization system is convenient for small enterprises engaged in trade or in the provision of services to the public.

The overwhelming majority of shops, catering outlets, small wholesale bases, construction and finishing companies, and farms are registered in the form of individual entrepreneurs.

Entrepreneurs also become freelancers and homeworkers: nannies, taxi drivers, hairdressers, tailors, repair and decoration specialists. By registering a business, they come out of the shadows, pay taxes and social contributions, due to which they receive seniority and the right to receive a pension.

Some companies have adopted a system for registering employees to work in the form of concluding a service agreement. In order to receive remuneration, an individual must register as an individual entrepreneur. The employer, accordingly, does not bear such obligations to the partner as to the employee: it does not provide holidays, it does not list benefits.

Thus, for example, many truckers on their own transport are decorated. Small business works only for one corporate client or for several companies of a consolidated group.

Not registering is an offense

An individual is legally entitled to do business only after state registration as an individual entrepreneur. If a Russian citizen concludes transactions and extracts income from them secretly, he bears a double responsibility:

1. Because he did not pay taxes and did not inform the government about the fact of opening a business
2. For failure to fulfill its obligations as an individual entrepreneur.

Business Registration

Let's see how to open an individual private enterprise.

The application procedure is described in detail on the official website of the tax service.

It is necessary to prepare the following documents:

1. The original passport and a copy (preferably 2 or 3) of all pages.
2. Application for registration in the form No. P21001.
3. The document on the payment of the fee for registration of IP. Currently, its size is 800 rubles.A receipt with the details of the payment of the fee can also be generated on the website of the MRI FTS.

In the event that it is not the future entrepreneur who intends to submit the registration documents, but a third party, a copy of the passport and the signature on the application must be certified by a notary.

Documents should be submitted to the tax authority at the place of registration.

You can also bring the formed package to a multifunctional center or send it by mail, having formed a letter with declared value and a list of attachments.

It is also acceptable to send an application in electronic form through the website of the MRI of the Federal Tax Service or the portal of public services. But for this it will be necessary to purchase a digital signature key certificate from a registrar company. However, this key will come in handy later to send reports to MRI FTS, pension and social funds.

The inspection will issue a receipt that the documents have been accepted.

Within three working days, an individual entrepreneur will be registered. On hand will issue a certificate and a record sheet in a single register.

Of course, when planning activities as an individual entrepreneur, it will also be necessary to obtain an individual taxpayer number from MRI FTS.

Ready documents can be accepted personally or entrust this task to a third party by issuing a notarized power of attorney.

Alteration

If your name, surname and address of registration have become different, it is not required to notify the tax authorities of new data. The passport office itself will do the job. But when changing the type of economic activity from one to another, “news” must be reported to state authorities. To do this, you must submit an application in the form of P24001 and copies of documents on the basis of which changes are made. After 5 working days, you can get a sheet of "fresh" entries in the state registry.

What types of activities can engage in IP

What is an individual private enterprise all the same? The examples are obvious. Walking around the city, pay attention to the signs of enterprises engaged in:

• trade
• small-scale production
• real estate for rent,
• creativity
• services (consulting, training, legal, accounting),
• advertising
• publishing activities
• by printing.

Most of these enterprises are registered in the form of an individual entrepreneur.

When do I need a license

If poor performance by your company of obligations may entail risk, a threat to the life, health, and well-being of citizens, then the business will be subject to mandatory licensing.

A full list of activities for which official permission is required is given in Art. 12 of Federal Law No. 99-FZ.

These include, but are not limited to:

1. services for the carriage of passengers (with the number of equipped seats in transport more than 8),
2. medical, pharmaceutical, activities,
3. educational services,
4. construction works,
5. the provision of employment services,
6. private detective work,
7. industrial safety expertise.

What types of activities can not carry out IP

According to Russian laws, an entrepreneur can engage in any business, with the exception of that which, in accordance with regulatory documents, must be registered in the form of a company.

In particular, banks, insurance companies, enterprises whose activities are related to the production or storage of weapons and narcotic drugs cannot be issued as IP. Do not register as individual entrepreneurs the company managing the apartment building.

What taxes does an individual entrepreneur pay?

Until 2013, it was permissible to open a private enterprise and, in the absence of income, hand over zero declarations.

Now, without even carrying out any business operations, the company is obliged to pay pension contributions and, if necessary, a minimum single tax.Potential financial losses are quite large, may amount to several tens of thousands of rubles per year.

Therefore, be careful to open an IP if you do not yet know when you can take orders and serve customers. And as soon as you stop doing business, close the company as soon as possible.

Conclusion

Owning an individual private enterprise means having a special status as a business person. Starting for the first time in business management, you will learn a lot and broaden your horizons. In the business world, it’s important not to give up and not be afraid of difficulties.

Suppose that in a difficult situation you are always supported by the idea that small business is always the path to victory and a way to get a great life experience.