Is the IP a legal entity?

Often when registering your business, many newly-minted entrepreneurs ask themselves about choosing the most convenient organizational legal form for their future business. Some also care if the IP is a legal entity. Undoubtedly, for a medium-sized business, an LLC is best suited for a large company or an open joint-stock company, and for a small business, an IP is the best option.

Individual entrepreneurship is an economic activity that aims to systematically obtain income (profit) when using assets, performing services or selling goods. Such a business is conducted at its own risk and risk, it does not require specific knowledge and experience in the implementation of this type of activity.

Is the IP a legal entity?

Entrepreneurship can be any individual who is registered with the state territorial inspection of the tax service and will conduct business without forming a legal entity.

Due to the fact that the IP does not have the status of a legal entity, its activities fall under the Civil Code regulations. Still, IP is equal to legal entities, as it conducts business, has the right to open a settlement account and choose an acceptable system of taxation. In addition, he has the right to conclude contracts on his own behalf, print on them and hire employees.

Answering the question whether the IP is a legal entity, it can be said that any registered adult who has reached adulthood can register as an IP, provided that consent is given to parents, trustees or guardians for this activity, or if the minor has joined marriage. This right is also enjoyed by foreign citizens or stateless persons permanently residing in the territory of Russia.

It is necessary to know that municipal and state employees can not become entrepreneurs. Also, regardless of whether the IP is a legal entity or not, in the case where it conducts business activities without registration, falls under administrative responsibility, and this citizen may be fined. After that, he must finish illegal business activities.

Benefits of IP

In the activities of IP there are some advantages that legal entities can not have. This is a simplified management, registration and liquidation of business activities, saving on costs, which are associated with the registration of the status of IP. An entrepreneur does not need to create a statutory fund: a person can start a business even without initial investment. To create a PI, no legal address is required: it can be located at the place of residence. No need to pay rent, look for a room. Due to the simplified taxation system , an individual entrepreneur is not required to pay VAT, he can apply a single tax depending on the mode of the activity being carried out.

IP does not need to hire an accountant and a director, it can conduct accounting, carry out clerical work and provide reporting in a simplified manner, single-handedly manage and own income. For IP, all earned money is considered his personal income, and in order to receive them from the account, he does not have to pay taxes on dividends, which are deducted by the founders of legal entities. In addition, the activities of an entrepreneur are counted in the period of employment.

Summing up, we can say that registration of IP is a great way to start a business. With minimal expenses, you can earn money while doing what you like.