To find the difference between these two subjects of legal relations should be deepened and understand what a physical-face, and that is a legal entity.

Natural person entrepreneur

Physical person entrepreneur is the sole entities, he’s the director. An entity may have any desired branched structure, employees, accountants, lots of equipment, however, is responsible for everything an individual entrepreneur, and meets all of their property, and even of the cottage in the suburbs, which is written on it. What it means to meet all of the property? This means that if you took out a bank loan, he did not give up, the bank has the right to dispose of property from an individual entrepreneur to complete the full amount of the debt. That is all that is written on the FLP likely go under arrest on sale until completely extinguish the debt. This is a minus of this legal entity.

Pluses exceed the minuses. The biggest plus is the ease in accounting, and if you are on a simplified system of taxation, and even plus everything you do not have employees, to FLP generally not a problem even the FLP. Not only simplifies the management of taxes, reduced tax base and also, roughly speaking, take all your income and subtract the 5% or 3% if you work with VAT. Pay monthly 34.7% of the minimum wage as ERU (single social contribution), and sleep soundly.

FLP delivers reports or quarterly (3-4 groups) or once a year (1-2 groups). It is also necessary to place the report on ERUs, as the tax once a year. At this bookkeeping for FLP (Business entity) ends.

Limited Liability Company

Another thing is a legal entity – a limited liability company. A large tax burden, however if you are on a simplified taxation system reduces the amount of taxes, but not reports (statistics, tax, pension fund, unemployment … and it’s not a complete list), you have to go to a tax inspector once a month, and it whatever you have in your cash flow or not. Course to one entity does not work, you need to hire a professional accountant, or you can dig in, and then disentangle the problem when you can concentrate fully on building a business.

We conclude a legal entity created not for small firms, but at least for medium-sized businesses, where there is a large quantity of goods which is necessary to conduct the remains, debit / credit, where there are tangible or intangible assets. But if you’re going to start a big fight, that entity is just for you. Since only the most important advantage is the fact that a limited liability company is liable only for its authorized capital, which was adopted by the board of directors. It can be range from 800 USD and above.

Conclusion

If you are a small company and you want to have your own business, and not trample thresholds government agencies, your choice of FLP (Business entity). Reduced tax burden, ease of bookkeeping, lack of checks on government agencies for at least 3 years. Well, if you have planned a big deal, involving a large borrowed capital, the approval of the charter, you can not do without a legal entity.