A variety of forms of doing business allows Russian citizens to choose the most convenient option for organizing their own business. But for this it is necessary to understand how an individual entrepreneur (individual entrepreneur) differs from an LLC (limited liability company), what advantages this or that choice gives.
The most serious difference between an individual entrepreneur and an LLC is the degree of responsibility of their organizers to potential creditors. So, an individual entrepreneur is liable for his obligations with all his property. In case of unsuccessful work, he can lose everything he has. The founders of an LLC, unlike an individual entrepreneur, risk only their authorized capital, the minimum amount of which is 10,000 rubles. Their property is not subject to penalties, so the founders of the LLC can be calm about their houses, cars, etc. Another difference is the different degree of administrative responsibility for these forms of doing business. Administrative responsibility for an LLC is usually higher than for an individual entrepreneur. Consequently, the possible penalties for LLC will be higher. The next difference lies in the place of registration of LLC and individual entrepreneur. A limited liability company must have a legal address: in order to obtain it, it is necessary to select non-residential premises - the office of the future company. You cannot indicate a residential building or an apartment as the legal address of an LLC. As for an individual entrepreneur, he can be registered only at the place of his registration, that is, in an apartment or private house. It is at this address that it will be registered with the tax office. At the same time, he can engage in entrepreneurial activity in any region of the country, regardless of the place of registration. One of the obvious disadvantages of individual entrepreneurship as a form of entrepreneurial activity is the lack of anonymity. The name of the entrepreneur is always well known, it is indicated in all documents, it is present on his seal. Whereas information about the founders of the LLC is not necessary to disclose: a person can be a co-owner of one or several companies, but a very limited circle of people will know about this. All activities of the LLC are carried out on behalf of the general director chosen by the founders, it is his name that appears in all documents. LLC registration is more expensive than sole proprietorship. Filling out accounting documents and keeping records for a limited liability company is more difficult than for an individual entrepreneur. LLC can be reorganized by way of affiliation, merger, division, as well as transformation into other forms of business. Reorganization of an individual entrepreneur into any other form of activity is not provided for by law. A person can be an individual entrepreneur and at the same time - a co-founder of an LLC.
