in decoding it means an individual entrepreneur. But who is he and what is his mandate?
Everything is quite simple, an individual entrepreneur is an individual who carries out some kind of entrepreneurial activity, but does not have a legal education.
Initially, other concepts were also used in the Russian Federation, such as: “entrepreneur without forming a legal entity” or “private entrepreneur”. Now there is one thing enshrined in the law - individual entrepreneurs. So, is it possible to register an individual entrepreneur for two?
Why is it worth opening an individual entrepreneur?
The status of an individual entrepreneur has its advantages compared to registering an enterprise, for example:
- It will be easier for you to open or, on the contrary, close the business you started
- All proceeds will be entirely at your disposal
- There are no taxes on property that will be used in business
- for individual entrepreneurs to keep a record of business activities
- Also, private individuals engaged in entrepreneurial activities do not keep minutes or meetings, and accordingly, the decision-making process is greatly simplified
- There is an opportunity to fully use the money earned without additional duties
Read more about opening an individual entrepreneur on your own here, and find out how to open an individual entrepreneur through the employment center in this material.
Option 3. Formation of LLC
In many cases, registering an LLC will be the best option for running a joint business.
Firstly, only LLCs have the right to carry out certain types of activities (for example, selling alcohol).
Secondly, registering an LLC allows you to register in the constituent documents the share of each founder in the authorized capital and the distribution of profits between them, which means it will protect each participant from a legal point of view.
Thirdly, LLC participants are liable for the company’s obligations only to the extent of their share in the authorized capital . The procedure for registering an LLC is somewhat more complicated than registering an individual entrepreneur and includes the mandatory preparation of constituent documents and a decision on the creation of an LLC; it is also necessary to open a current account and make a seal. However, for participants in a joint business, such an organizational and legal form is still more attractive and safer.
Opening an LLC will not be much more expensive than registering an individual entrepreneur. And in an LLC you can save on taxes, on a bank account, and at the same time get a safer and more reputable organization.
Doing business as an individual entrepreneur is profitable only if the entrepreneur is truly “individual”, that is, he conducts his business independently at his own peril and risk.
Open an individual entrepreneur for only one participant
It’s worth mentioning right away that this path is fraught with many risks, and not only for the person whose name is not included in the documents. If you want to minimize the amount of tax and enjoy the privileges of individual entrepreneurship together, then you can open an individual entrepreneur for only one person.
At the same time, the second participant in the business will only be an unofficial co-owner of your institution. This path is usually chosen by close relatives or best friends who have no reason to doubt each other.
However, no matter how prosaic it may sound, when it comes to profits or finding out who has invested more effort, time and money in a business, “friendship may turn out to be friendship, but money may be apart.” Therefore, a person whose rights are not legally enshrined in official documents can very easily be left with nothing if it comes to a quarrel. To prevent this, you should draw up a loan agreement between two equal individuals every time an unregistered participant invests his money in the development of your common business.
If your relationship becomes strained, saved loan receipts will help return the invested money to the unofficial co-owner. Yes, this is not a panacea in case of a quarrel. this owner will not receive a fair half of the business or that part. which he claimed, but the return of material costs is at least something. Unfortunately, this is the best. what the law offers for such individual entrepreneurs.
We invite you to read information about illegal entrepreneurship, about the individual entrepreneur’s agreement with the LLC, about statistical codes, about opening a current account and withdrawing money from it, about making a seal for the individual entrepreneur and about its registration, as well as about the PBOLE, an extract from the Unified State Register of Individual Entrepreneurs.
Can an individual entrepreneur have a director?
Of course, a businessman, having registered as an individual entrepreneur, represents his business independently. But if necessary, another person can conduct business. For example, it happens that for personal reasons: illness, difficult family situation, running another business in parallel, an entrepreneur is forced to leave his business under the supervision of an employee.
An individual entrepreneur may have a director. In this case, the employee signs an order of his appointment, reads the job descriptions, performs specific duties and receives a salary as agreed. As a rule, the director of an individual entrepreneur is simply a manager of a certain area of activity (for example, the director of a store).
General Director is a position that cannot be offered to an employee. The main decisions remain with the person on whom the business is registered, that is, with the individual entrepreneur. But some options for leadership positions for hired personnel are possible: commercial director, executive director, manager, personnel director, director of a certain direction, etc. You can find a suitable position in the Unified Qualification Directory.
General Director is a position that cannot be offered to an employee.
According to Article 413 of the Civil Code of the Russian Federation, the law cannot consider any obligations if the creditor and the debtor are the same person. Therefore, an individual entrepreneur cannot appoint himself as a director, since civil obligations in this case do not make sense. Also, an entrepreneur cannot pay his own salary or enter into an employment contract with himself. The status of an individual implies that the individual entrepreneur performs his social functions directly, unlike a legal entity, where personification is simply necessary, that is, in order to express its will, the company needs a manager appointed for this.
The order for appointment as a director is signed by both parties, and if the employee requests, he is given a copy. The date in the order is considered the day of taking office.
To avoid further disagreements, accompany this appointment with two more documents:
- Job description.
- A standard employment contract, which specifies all the duties of the appointee, his areas of responsibility, work schedule and functions.
Don't forget to provide your employee with a power of attorney to perform certain functions, this will make things easier for both of you. And so that there are no problems with payment at the bank (so that your director’s signature on payment documents does not cause disputes), you together draw up a card with sample signatures at the bank.
Don't forget to provide your employee with a power of attorney to perform certain functions, this will make things easier for both of you.
Here is a sample of each of the necessary documents: an order for hiring, an order for taking on the position of director, a job description for a commercial director.
So, you can perform the duties of a director yourself, but you do not have the right to appoint yourself as one. Or you can hire a director for an individual entrepreneur as a manager or executive director. Think for yourself whether you need a person who will share with you all the power.
Who is responsible if a business collapses?
But not everything is so smooth with a person registered as an individual entrepreneur. It is he who will be “answerable” before the law. if the business turns out to be unprofitable. According to Russian legislation, it is the owner of the individual entrepreneur who bears financial responsibility if the business “burns out”.
And this liability is not limited to the property associated with your company, as is the case with an LLC, but extends to the personal movable and immovable property of the entrepreneur. In other words, if the business turns out to be unprofitable, then it is the owner who can describe the car, apartment and other property, and the co-owner will get away with it as a person not indicated anywhere in the documents.
Therefore, if you choose this option for doing business, you must be one hundred, or better yet, one hundred to ten percent confident in your partner. And this applies to both sides.
Simple partnership
If you decide to run a business together, but want to get certain guarantees for yourself, we will tell you how to register an individual entrepreneur for two with less risk. The simplest legal way is to create a simple partnership. You will not need to register any legal entity; you just need both co-owners of the business to have individual entrepreneur status. By forming a simple partnership, you will protect yourself from many risks without additional registrations and expenses.
To legally regulate the relationship, the co-owners must draw up a simple partnership agreement. It sets out the rules for doing business, the rights and obligations of both parties, the distribution of income and other points.
What if it's unofficial?
In practice, you can encounter situations in which several people (two, three or more) unite to conduct a joint business. However, only one of them formalizes the status of an individual entrepreneur in a regulated manner, officially signs the necessary documentation, pays taxes and submits reports. Others work with him in the absence of a contractual relationship or as employees.
But this is a very risky option for everyone involved. The individual entrepreneur himself is registered within the framework of existing procedures in this capacity, and assumes responsibility, including property, for the legality of actions in connection with the implementation of business activities. His secret comrades risk being left without profit, the distribution of which depends on the official entrepreneur. In addition, given that the entrepreneur does not legally formalize the payment of income to other partners and makes it without withholding taxes, the partners have a risk of being brought to administrative liability.
However, in order to minimize taxation or for other reasons, such situations of organizing a business for two (three), based on trust, friendship or family relationships, periodically occur.
To legalize the income and deposits of unofficial participants (one, two, three), it is recommended that they draw up loan agreements with the individual entrepreneur, which to some extent guarantee legal protection for the participants in such joint activities. However, this option does not always suit an individual entrepreneur; he may be left without a business and in debt. Its risks are increasing.
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| Chanterelle |
| Good afternoon There is an LLC, one of the founders is the director of the Organization. Now the director (aka IP) wants to register trust management of the Organization for the IP and become its manager. In my opinion, he cannot draw up such an agreement for his own individual entrepreneur, p.ch. in accordance with Part 3 of Art. 898 of the Civil Code “A trustee cannot be a beneficiary under a property trust management agreement.” In turn, “the beneficiary is an individual or legal entity, resident or non-resident, indicated by the principal, in whose interests the trust management of the principal’s funds is carried out;” (in accordance with the Resolution of the Board of the National Bank of the Republic of Belarus dated December 28, 2006 N 227 “On approval of the Instructions on the procedure for trust management of funds by banks and non-bank financial institutions”). That. the director (he is also one of the founders of the LLC, he is also an individual entrepreneur) is a beneficiary under the Trust Management Agreement, respectively, because receives dividends from the activities of a legal entity. Do you think I'm thinking correctly? The auditor insists that there will be no violation here, but I cannot agree with him due to the provisions of the law. Help resolve the situation!! |
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| I have very simple tastes. The best always suits me... Oscar Wilde. |
| Sergey Ivanovich [email hidden] Slonim Wrote 1744 messages Write a private message Reputation: 761 | #2[420907] July 5, 2013, 9:54 am |
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| Chanterelle [email hidden] Republic of Belarus, Minsk Wrote 54 messages Write a private message Reputation: | #3[420930] July 5, 2013, 11:44 |
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I have very simple tastes. The best always suits me... Oscar Wilde.| el_express [email hidden] Minsk Wrote 90 messages Write a private message Reputation: | #4[476949] January 20, 2020, 12:55 |
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| Tatiana L. [email hidden] Republic of Belarus, Minsk Wrote 1112 messages Write a private message Reputation: | #5[476966] January 20, 2020, 1:38 pm |
el_express wrote:
Founder of a Private Enterprise – Individual Entrepreneur Manager? Hello, please tell me, we have such a situation that the director plans to register an individual entrepreneur and become an individual entrepreneur. Who has encountered this situation, because It is not clear who will be responsible for fire and electrical safety (previously the director of the enterprise). Who has the right to sign documents? And is it possible for the founder of a private enterprise to be an individual entrepreneur at this enterprise? Share your thoughts. Thank you.
Yes, it is permissible for the founder of a private enterprise to be an individual entrepreneur at this enterprise.
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Everything is possible! The impossible simply takes longer. Dan Brown| el_express [email hidden] Minsk Wrote 90 messages Write a private message Reputation: | #6[476970] January 20, 2020, 2:11 pm |
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| Tatiana L. [email hidden] Republic of Belarus, Minsk Wrote 1112 messages Write a private message Reputation: | #7[476971] January 20, 2020, 2:35 pm |
el_express wrote:
Thank you. What's the procedure?
1. Amendments to the Charter, where you prescribe the possibility of assigning the powers of the executive body to the manager 2. Registration of individual entrepreneurs. 3. Minutes of the extraordinary meeting of participants on the termination of the contract with the director and the conclusion of a management agreement with the individual entrepreneur. 4. Management agreement with individual entrepreneur. 5. Notification of the executive committee, FSZN, Belgosstrakh about the change of director.
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Everything is possible! The impossible simply takes longer. Dan Brown| el_express [email hidden] Minsk Wrote 90 messages Write a private message Reputation: | #8[476975] January 20, 2020, 2:44 pm |
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