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What is more profitable to open to the developer: IP or LLC? Small Check Sheet


The traditional question of freelance developers in the expansion (legalization) of their activities - what to choose between PI and LLC? Recognizing the importance of the topic, I want to say that despite the peculiarities of these organizational and legal forms, they cannot be called key to achieve the desired result. The main thing in any business is still the value that you create for consumers, and the ability to convey it.


Why does the developer need to create an LLC or register as an IP?
If you work as a freelancer, then a meticulous serious customer will enter into a contract, and not limited to the TK, dropped by mail. The contract, by the way, protects your interests, first of all, guaranteeing the payment of your earnings. Of course, the customer can enter into a contract of services or a contract with an ordinary individual (not an individual entrepreneur), but this option is not beneficial to him or to the freelancer.


  1. The executor under such a contract is an insured person, therefore the customer is obliged to charge insurance contributions to the PFR and MHIF in the amount of remuneration, only 27.1%.
  2. The amount received for services will be less by 13% than specified in the contract. This is an income tax that the customer withholds from remuneration, transferring to the contractor only 87% of the cost of services.

If we go beyond the personal provision of services, then product development requires the involvement of resources, partners, performers and, accordingly, business registration. It is here that we propose to talk about the significant differences between the IP and LLC, which you should know on the coast. Go!


Financial risks


Business is started with the intention to earn money, so potential entrepreneurs are first and foremost asked about financial risks. In principle, financial risks, as such, are not the prerogative of business alone. An ordinary person can arrange an extreme for himself by taking a couple of other consumer loans or mortgages. Here you can add civilian risks (car owners or neighbors in a high-rise building) and labor risks, in the form of liability for damage caused to an employer.


And yet, it must be admitted that “getting into the money” is easier for a businessman than for an ordinary average citizen. The list of specific business risks can include:



What to do if the business will bring some losses? How to rewind the tape back and get out of it with minimal losses?


Well, firstly, many "horror stories" and remain only in the imagination. To bring the business to ruin, you must still be able to (unless you do it intentionally). Secondly, not all business expenses can be recovered from the business owner.


The individual entrepreneur in this sense risks more — debt collection is possible at the expense of all his personal property, including that which was not used in the activity. As for the LLC, there is a well-established conviction: the founders are responsible only within their share in the authorized capital. This is not entirely true, because the practice of attracting founders to the subsidiary one , i.e. to unlimited additional liability, growing every year.


But (!) If you magically managed to liquidate an LLC with debts (you don’t have any interest for creditors or they didn’t have time to state the requirements), then after the liquidation of the company, the founders can no longer be held subsidiary. But property claims to the IP are still possible after it is removed from tax accounting.


Total: founders of LLC with their money risk less, because the procedure for bringing them to justice is more complicated than with respect to the PI.


Business scale


If you are dreaming about a corporation, then of course, you need to register a company. The same, if you can not imagine a business without partners. Potentially, the amount of income is not limited to either PI or LLC. Work, and you will benefit, regardless of the legal form. But if you want to attract investments, sell / donate / transfer your share in the authorized capital to the heirs, and just at some point retire, then this is possible only when registering an LLC.


Total: SP is worth discovering if you just want to legalize your personal business. In the presence of corporate ambitions, partners and / or investors, LLC is the only possible option.


Tax burden on LLC and IP


The tax burden is not only business taxes, but also contributions to the funds (for employees and individual entrepreneurs for themselves). In principle, it is necessary to decide which organizational and legal form for your business is more profitable, after individual calculation of the tax burden. There are few general recommendations here, so a quick overview is as follows:


  1. In Russia, you can work on one of the five tax systems: one main (OSNO) and four preferential, with a reduced tax burden (USN, UTII, UAT, PSN). Each system has its own procedure for calculating tax and reporting. There are also regional features of taxation, due to which the tax on UTII or PSN with equal introductory can differ many times even in neighboring cities (see our article on Habré “ How much does a programmer earn in Moscow according to the Federal Tax Service ”).
  2. Insurance premiums to the funds (in 2016 the minimum amount is 23 thousand rubles) are paid by all the individual entrepreneurs, even if they do not conduct a real business or officially work somewhere. The founder of the company, if he manages an LLC without an employment contract, does not pay contributions for himself. That is, in the case of business downtime and the absence of taxable property, an LLC costs less than an IP .
  3. Individual entrepreneurs, registered for the first time after the adoption of the regional law on tax holidays , provided that they have chosen certain types of activities, may not pay tax for two years in the USN or PSN regimes. By the way, only SP can use PSN, which often turns out to be the best taxation option.

Total: it is difficult to say unequivocally that it is more profitable to open in terms of taxes - IP or LLC. Too many factors matter: business scope, region of activity, number of employees. In each case, it is necessary to separately count what is more profitable for you. If you do nothing and do not declare the transition to a preferential mode immediately after registration (or even during the registration process), you will have to work in a general mode - the most expensive and difficult to report.


Tax on business income


But what is absolutely clear, is that when obtaining income from a business, the founder of an LLC pays an additional tax on personal income from dividends . It turns out that first the company pays taxes on its income, and then dividends are also subject to personal income tax. The tax code of the Russian Federation does not consider such an approach a double taxation, because the LLC and its founder are different taxpayers. Formally, the way it is, but it is rather difficult to treat the income received from investing personal funds in your company as something outside.


If you are still a supporter of the creation of an LLC, then this article “ 6 legal ways and 1 dubious withdrawal of money from business founders ” will be useful to you.


The entrepreneur in this regard has no problems: everything that comes to the cashier or to the current account can be withdrawn in cash or transferred to your card for personal use. These operations are not subject to tax. The maximum you can lose in your bank is from 0% to 2% for withdrawal (to the delight of IPeshnik many banks now offer 0% when withdrawing amounts up to 500 thousand rubles a month, which is not bad).


Total: the receipt of income from a business in the LLC format is 13% less than that for individual entrepreneurs. An additional advantage of an individual entrepreneur is the possibility at any time to transfer money from the current account of the individual entrepreneur to your personal account and use it without any restrictions.


Administrative load


What is meant here is how much time, effort, and resources will be needed to properly register all business transactions and management procedures in a business. LLC in this sense has two drawbacks:


  1. Duty to keep accounts. For some time, LLC on special regimes (USN and UTII) could not keep accounting, but since 2013 everything has returned. Today, all organizations are required to maintain tax and accounting . PI - only tax. The responsibility for ensuring accounting in the company lies personally with the manager, for him it is a permanent control zone. In principle, in the absence of activities or operations of the same type, you can cope with the accounting of your company on your own with the help of specialized online services. Another option is full or partial accounting outsourcing , which often costs less than its accountant or team of accountants.
  2. Maintaining internal corporate documentation. Any LLC is a state in a state. He has his own Constitution (charter), his King (General) and court etiquette. All more or less significant events (distribution of dividends, member's entry / exit, change in share capital, operations with shares, etc.) should be recorded in the minutes of the general meeting or by decision of a single participant. And it is also necessary each time to notarize the application forms P13001 and P14001 at the notary, which are submitted to the inspectorate for reporting changes to the Unified State Register.

Total: freelance without workers easier to do business as an IP. But if you are the sole founder of an LLC (in this case, corporate procedures can be minimized) and ensured accounting, the difference in the comfort of doing business is not that great.


Fines


Here is just an inexplicable situation, worthy of appeal to the Constitutional Court. The size of administrative sanctions for the LLC for the same violations is many times greater than for the PI. In addition, the manager himself is fined as an official. For example, if an individual entrepreneur opened a shop and hung up outdoor advertising without coordination with the local administration, then he will get off with a fine of up to 5 thousand rubles. If the store is owned by the company, then the fine will be more than 100 (!) Times higher - from 500 thousand to 1 million rubles (Article 14.37 of the Administrative Code). Well, the director will hang from 3 to 5 thousand more.


There are several types of such “especially for legal entities” fines, and all of them are provided for administrative violations (according to the Code on Administrative Offenses of the Russian Federation). The tax code does not make any differences in the amount of sanctions for individual entrepreneurs and limited liability companies, justly and equally calling all taxpayers.


In July 2016, a new article 4.1.1 was introduced into the Code on Administrative Offenses of the Russian Federation, which states that for the first administrative violation there is not a fine, but a warning. However, if you get a closer look into the text of the article in more detail, then we will find a large list of reservations, when for violation it is fined immediately, for example, for unfair competition. That is, in fact, to defend their right to a warning will have to fight with the bureaucratic machine, because fines are direct revenues to the budget.


Total: the interest of inspectors to an LLC is higher than to an individual entrepreneur, because the amounts of fines, as well as the situations when they are imposed, are greater for legal entities . You should not rely too much on supervisory vacations (the ban on inspections in the first three years after registration). The ban restricts only non-tax checks and only those that are included in the plan . Unscheduled, at a signal from a government agency or upon a consumer complaint, may come at any time. But tax audits are not limited at all, and this is unlikely to happen once.


Registration moments


In order of importance when choosing between IP and LLC, this question takes the last place. What SP, LLC that register with the tax office in just three working days. But there is a significant difference in the package of documents. Compare yourself:



If the registration of the LLC is not carried out to the address of the manager or one of the founders, then the lease / purchase of the legal address is also required. And this is an additional cost. The entrepreneur is always registered at the place of registration in the passport.


The price of the question (we take into account that this is a one-time cost) is also not significantly different:



The authorized capital (minimum size - 10 000 rubles, and it is contributed only in cash, and not stools) must be made within four months after the establishment of the LLC. Plus or minus month does not matter, because no responsibility for violation of this period has been established.


However, when the business is terminated, there are more nuances. You can close the IE, even with debts, within five working days, by submitting an application and paying 160 rubles of state duty. Liquidation of an LLC is more similar to a quest, both in duration (about 4 months) and in complexity. But, in general, if you don’t owe anyone, and with a reporting order, you can eliminate an LLC yourself without any particular problems.


Total: the procedure for registration of IP and LLC is about the same. It is much more difficult to liquidate a firm than to close an IP.


Below, for those who have doubts, we have made a selection of cases, when it is better to register individual entrepreneurs, and when - LLC


4 examples of when it is better to register IP:



4 examples when it is definitely worth registering an LLC:



Outcome totals:



PS And those who have not decided on the choice, can register both the PI and the LLC for maximum results.


For those who are interested in the registration issue


Other articles from our blog on Habré:



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Source: https://habr.com/ru/post/316888/

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