What is the difference between LLC from IP

Business entrepreneurial activities provide for mandatory state registration in a certain organizational and legal form. The most common are IP and Ltd., between which there are significant differences that are determined by the disadvantages or benefits for each wishing to conduct entrepreneurship.

An individual entrepreneur is an individual, and a limited liability company has the status of a legal entity. The PI is a simplified form for doing business, while only one individual can be its owner. LLC provides for a greater number of founders (up to 50), which form the authorized capital, this form of organization has controls. Based on these signs, the main differences between IP and LLC related to registration and liquidation, accounting and tax accounting, responsibility, the possibility of reorganization, taxation, etc.

REGISTRATION The IP occurs in a simplified form, the relevant authorities request only a certified application for registration, a passport of a citizen of the Russian Federation, as well as receipts for payment of state duty. Registration term - up to 5 days. The registration fee for LLC significantly exceeds the fees of the IP. The package of documents depends on who is the founder:

necessarily - a statement, protocol of the assembly of all founders and the charter, a memorandum of association, reflecting the share participation, and the processes associated with the introduction and purchase of the processes, documents for real estate (lease agreement, ownership), etc.;
individual - copies of passport and INN;
individual - the entrepreneur additionally provides a certificate of registration;
the legal entity is all the right-pointing documents, copies of the passports of the Director and the Chief Accountant, the certificates of accounting in the tax service authorities, etc.

Accounting and tax accounting for the IP is simplified, moreover, activities are subject to only one type of tax (tax on individuals or a single tax), but revenue taxes should be paid within 30 days from the date of receipt. In addition, the legislation provides for the payment of value added tax, if the IP revenues will be higher than 3000 minimum wages. For LLC, there is a larger list of taxes, and the amount is much higher. In addition to the conduct of accounting and tax accounting, LLC is obliged to submit reports to statistical authorities. However, if there were no commercial activities during a certain period of LLC, it is getting rid of taxes.

Each founder of LLC is responsible in the framework of the share in the share capital, and the IP provides for personal responsibility that takes into account the personal property of the entrepreneur not engaged in business. But in turn, the IP independently disposes of the entire profitable part.

LLC provides for the possibility of reorganization, changes in the form of ownership, mergers with other organizations, also legislatively enshrined the right to create representative offices in other regions or countries. Ltd. can be sold, and IP - no. The closing process of the PP occurs in a week, and the liquidation of LLC can last several months.

IP and LLC are fundamentally different organizational and legal forms that have both positive and negative sides. But the legislation is not prohibited simultaneously to be a member of the IP and LLC, which can give the physical person certain advantages when doing business.