What is PE, what is an LLC?

When organizing your business, many of its founders often ask themselves: what legal and organizational form to choose? In this article we will try to understand what is an emergency, what is an LLC, what is their difference and what are the advantages.

What is LLC

LLC is an abbreviation, which stands for: "Limited liability company". This is the most common organizational and legal form of enterprises to date, as well as PE. What is the state of emergency and what is different from LLC, we will consider later in this article. LLC is a company that can be established by one or more people.
At the same time, founders can be not only physical, but also legal entities.
When creating an LLC, for its full functioning, it will be necessary to perform the following steps:

1. Determine the name of the enterprise.
2. Determine location - legal address.
3. Choose the head - the sole executive body.
4. Select activities for the enterprise.
5. Prepare documents for registration.
6. Pay the statutory capital by any available means.
7. To pass the procedure of state registration.
8. To make a seal and stamps.
9. Open a bank account.
10. To inform about opening of the enterprise in the off-budget organizations.
11. Select the taxation regime.
12. Employ employees.

The number of employees in the company is not limited in any way. Persons working in such an enterprise shall be subject to all provisions of the current labor legislation.

What is PE

PE is an abbreviation for "Private entrepreneur". Speaking about the state of emergency, the meaning of which implies an individual, one should be represented by a citizen of the Russian Federation who expressed a desire to engage in entrepreneurial activities and passed state registration in due course.

To date, the concept of "private entrepreneur" as such is no longer there. Therefore it is useless to seek an answer to the question about what is an emergency situation? At the legislative level, it was replaced by the "Individual Entrepreneur".
And yet, answering the question about whether a private enterprise is a private entrepreneur or an enterprise, you can definitely answer that it is an entrepreneur.
In order to obtain the PI status, you must perform the following actions:

1. Identify the desired activities.
2. Prepare registration documents. The address of the physical person's residence will be indicated as the IP address.
3. To pass the procedure of state registration.
4. For full-fledged operation, there is no need to print and open a settlement account.

IP can employ any number of people. As well as LLC, the IP is obliged to conduct work books and make all necessary deductions, including to the Pension Fund and the Social Insurance Department. PI workers are covered by absolutely all types of guarantees established by labor legislation.

Registration procedure for LLC

In order to open an LLC, the following list of documents must be submitted to the registration authority:

1. Decision on the establishment of LLC or the minutes of the meeting of founders (in the event that there are several founders).
2. Agreement on the establishment of LLC - if several founders.
3. Charter of LLC.
4. Application for registration under Form P 11001. It should be noted that this declaration must be certified by a notary public, the duty for performing notarial acts is paid.
5. A guarantee letter from the owner of the premises where the state registration is made, or copies of title documents.
6. To pay a state fee of 4 thousand rubles and 400 rubles for the issuance of a certified copy of the Charter.
7. If necessary, submit a statement on the transition to a simplified taxation system.
8. Power of Attorney, if the registration documents will be provided by another person. In this case, it is issued on behalf of all the founders who certified their signature in the application for registration.

Within 5 working days, the relevant body will issue a certificate of state registration, an extract from the Unified State Register of Legal Entities, a copy of the Charter, a certificate of tax registration (or a reasoned refusal to register an LLC).

The order of creation of IP

It is not difficult to register an IP personally. To do this, you must perform the following actions:

1. Select activities, or OKVED, for small businesses.
2. Independently fill out the application form P 21001. This application can be filled out either by hand or in print. But it should be remembered that the printed version can not be corrected, corrected or corrected.
3. Since 2011, there is no need to certify this application from a notary if the future IP provides documents for registration in person. If the documents are submitted through a representative or by mail, in this case it is necessary to attach to the package of documents:

- a copy of the passport of the IP;
- a notarized application for registration under Form P 21001;
- power of attorney for an authorized person.

It should be taken into account that the ready documents can not always be received from the tax representative.

4. Prepare an application for transition to a simplified taxation system.

Advantages and disadvantages of LLC

Any form of doing business has a number of advantages and disadvantages. Some of them we will find from OOO:

1. Responsibility for LLC may be limited by the size of the authorized capital, for the founder - in the amount of its contribution. The size of penalties for businesses is quite large.
2. Sufficient anonymity of the exhibitors.
3. Litigation between LLCs is always subject to review by the Arbitration Courts.
4. For the limited liability company, there are a number of restrictions with regard to cash management. For example, for one transaction, the cost of obtaining cash is limited to 60 thousand rubles. LLC is required to comply with the cash discipline and maintain appropriate accountability.
5. LLC is required to open bank accounts and report this to the tax authority.
6. When distributing profits, after paying all taxes and contributions, the founders are obliged to pay personal income tax at the rate of 9% from the received dividends. The right to receive dividends arises no more often than once a quarter.
7. Modern enterprises have developed a more trustful attitude towards LLC as a form of business, since this form of organization presupposes a more serious cash and material responsibility.

Disadvantages and advantages of IP

Consider the pros and cons of IP:
1. When creating an IP, a natural person will incur less expenses for payment of state duties (payment to a notary, state registration fee, payment of authorized capital), rather than when creating an LLC.
2. For its debts, the IP responds with all its assets - as an individual. Criminal responsibility may be imposed on IP. At the same time, the amount of fines is much lower.
3. Litigation by the IP, in case of appeal against normative acts of bodies of state bodies, are subject to consideration in the Arbitration Courts. In other cases, disputes are referred for permission to the courts of general jurisdiction.
4. An IP can carry out licensed activities in accordance with the requirements for candidates. The exception is the ban on the sale of alcohol products.
5. If an individual entrepreneur opens an account as an individual, there is no need to report this to the tax authority. In all other cases, the message is required.
6. The cash discipline of the PI is simplified.
7. Information about IP is available at least because they make their way on checks.
8. IP has the right to use the proceeds immediately after its receipt and does not pay any taxes on it.
9. Individual tax privileges are established for the IP, and the state very often helps in the development of entrepreneurship, establishing various types of subsidies.
Unequivocally answer the question that it is better to choose - PE (IP) or LLC, it is difficult to answer. In order to determine the form of running your own business, you need to weigh all possible pros and cons specifically for yourself, as well as to calculate all the attendant risks.