Is it possible to open an individual entrepreneur if you are officially employed? How to properly open your own individual entrepreneur.
Many people have thoughts about earning extra money, even though they have a permanent job. Often they open their own business for this purpose. But in order not to break the law, business activities must be registered. One option is to register as an individual entrepreneur. Such people are interested in whether it is possible to open an individual entrepreneur if they are officially employed. There are some prohibitions in this matter.
Restrictions
To answer the question of whether it is possible to open an individual entrepreneur if you are officially employed, you should focus on legal norms. An individual entrepreneur, compared to an LLC or OJSC, is not an organizational and legal form. This is the status of an individual. And he has the same rights to employment regardless of whether it is a business or not.
There are several conditions for registering an individual entrepreneur:
- age from 18 years;
- capacity;
- Russian citizenship;
- no restrictions on business.
Considering these requirements, is it possible to open an individual entrepreneur if you are officially employed? Labor obligations cannot be an obstacle to starting a business.
Who is prohibited from opening an individual entrepreneur?
But working citizens have limitations in their ability to register a business. This is related to the profession or position. Those who serve the state cannot open a business. These include:
- military personnel;
- employees of the Ministry of Internal Affairs;
- officials;
- deputies of the State Duma and the Federal Assembly;
- heads of municipal organizations.
Is it possible to open an individual entrepreneur if you are already officially working as a lawyer or notary? People of these processions are also prohibited from starting a business. The reason for the restrictions is due to excessive busyness. Employees who are supported by the state and also represent its interests should not be distracted by business activities.
After all, then the main responsibilities may not be performed very well. In addition, simultaneous work in government and doing business can encourage lobbying, and this is considered a violation of the law. There are also restrictions in cases where a working person intends to register a business, as well as in the opposite case: until the individual entrepreneur is deregistered, it is impossible to obtain a certain position.
Can employees of a budgetary or government organization register as an individual entrepreneur?
Not in all cases, employees of municipal and state-owned enterprises have the status of civil servants. In these organizations there is a division into civil servants and employees. The category can be found in the employment contract.
The list of positions that have a special status is created by presidential decree. Special cases are recorded in regulatory documents. Therefore, to avoid problems, you need to ask your employer whether it is possible to open an individual entrepreneur if you are officially employed in your position?
After all, people of many professions can be considered civil servants. Is it possible to open an individual entrepreneur if you are officially employed as a teacher? These employees are allowed to conduct private activities in the form of tutoring. And the head doctor of a private hospital cannot engage in business, since he represents the state in the field of healthcare. Is it possible to open an individual entrepreneur if you are officially employed by Russian Railways? These employees can start a business.
Does individual entrepreneur affect labor relations?
If we take into account the norms of the law, then no difficulties should arise in organizing a business with official employment. But what kind of relationship a particular employee and his employer will have depends on them.
Is it possible to open an individual entrepreneur if you are officially employed by a bank? Since the employees of this organization are not civil servants, entrepreneurial activities are available to them. Before registering as an individual entrepreneur, you need to assess your strengths and capabilities. Conducting a case takes time, since this is the work itself, as well as reporting to regulatory authorities. If you fail to timely submit the necessary documents to the tax, pension, or insurance funds, you will have to pay fines.
It is not possible to be an entrepreneur only periodically. The obligations that the individual entrepreneur must fulfill continue throughout his work. And they only end with deregistration. Due to additional employment, the quality of work at the main place should not suffer.
If an employer makes high demands on an employee, having learned about the registration of an individual entrepreneur, the employee has the right to complain to the labor inspectorate. Running your own business does not change the employer's obligations. The institution also makes tax and contribution payments, provides paid leave and sick leave.
The employee must also pay taxes for individual entrepreneurs, as well as make payments to the Pension Fund and the Social Insurance Fund. Is it possible to open an individual entrepreneur if you are officially employed by Russian Railways? Since the employees in this organization are not government employees, they are therefore allowed to do business.
It is not necessary to inform managers about the start of a business, since there are no such requirements in the law. You can find out about a person’s registration by requesting an extract from the Unified State Register of Individual Entrepreneurs to the Federal Tax Service or using advertising.
Employment contract
Citizens who are individual entrepreneurs, like other individuals, can be hired and work under a contract. The work book will not include information about entrepreneurship, so information about the main job is entered into it.
There are situations when a relationship appears between an individual entrepreneur and a company as a customer and a contractor. Then there is no need to draw up an employment contract, but a civil agreement is drawn up. Payment is made based on the certificate of completed work. This option is only possible with bilateral consent.
Combination
IP must be registered. This procedure is the same for everyone. You need to choose a sector, a taxation system, and also prepare documents:
- Passport.
- Application for registration in the Unified Register in form P21001.
- Confirmation of payment of state duty.
- Application for a simplified taxation system (2 copies).
These areas have OKVED codes, which should be recorded in the application. In each activity you can use a simplified system, and then you will need UTII. It assumes 2 taxation options: a contribution of 6% of income and 15% of profit. If the business turnover is small, choose 6%.
The documentation is provided to the Federal Tax Service. After 3 days, a certificate of individual entrepreneur and an extract from the Unified State Register of Individual Entrepreneurs are issued. The information is sent to the funds, where a registration number will be issued. After this, legal business begins.
When is registration needed?
There are cases when business registration is mandatory:
- To conduct business you need a patent or license;
- To perform transactions through the account.
- To attract customers you need active advertising.
According to the laws of the Russian Federation, opening a business requires mandatory registration. But whether to combine it with official work or not depends on the person himself. It is necessary to calculate whether there will be enough time to engage in both activities. It is also important that it be profitable.
Not all entrepreneurs, especially when it comes to small businesses and people who work for themselves, are ready to create a legal entity. The fact is that quite high requirements for accounting and tax reporting are imposed on a legal entity. Therefore, it is not surprising that many small and medium-sized entrepreneurs postpone registering their business until the last minute.
In order to bring this category of entrepreneurs out of the shadows, the Russian government created a special form of entrepreneurial activity without creating a legal entity: individual entrepreneurship (IP). Let's take a closer look at who an individual entrepreneur is, what is needed to open an individual entrepreneur and how much this procedure costs.
Opening an individual entrepreneur yourself: step-by-step instructions and necessary documents
State registration of individual entrepreneurs. There are three options for submitting documents: in person to the registrar, by mail and through the website of the Federal Tax Service of Russia. An important innovation that encourages a future entrepreneur to use electronic registration is the absence of the need to obtain an electronic digital signature to register an individual entrepreneur. The identity of the applicant is established already at the stage of issuing a certificate of registration of individual entrepreneurs.Regardless of the chosen method of submitting documents, in order to register an individual entrepreneur, it is necessary to submit all the required documents to the department of the federal tax service at the applicant’s place of residence.
What documents are needed to open an individual entrepreneur?
- A copy of the internal passport of a citizen of the Russian Federation. A copy of all those pages that contain any information about the citizen is required.
- Original receipt of payment of the duty. The amount to be paid is 800 rubles. Payment details can be found on the official website of the Federal Tax Service of the Russian Federation.
- Statement of the established form (form No. P21001). Filling out this form is not that difficult, however, you should fill out all fields as carefully as possible and check the application for errors. Misprints, typos and corrections are not allowed, so it is better to fill out the application form in advance.
The above documents are mandatory for state registration. The absence of any of them is a reason for refusal of state registration. At the same time, refusal does not mean the absence of the right to apply to the federal tax service again, having collected all the necessary documents. The registrar's refusal can be appealed in court, however, it is more advisable to resubmit the documents.
An entrepreneur can also switch to a simplified tax payment system. This will allow him to administer fewer taxes (from 6 to 15% depending on the subtype of the simplified tax system) and thus simplify tax accounting. Having paid income tax in the amount of 6%, it is possible not to keep tax records on expenses at all. It is possible to change the taxation system at any time, however, a more reasonable option would be to initially select the most appropriate tax payment procedure, which is the simplified system.
Thanks to the “single window” principle implemented in Russia, registration of individual entrepreneurs in all kinds of government agencies is carried out automatically.
Opening a bank account. An entrepreneur has the right to independently choose the banking institution in which his current account will be opened. We recommend that you approach your choice of bank as seriously as possible, since possible problems with a bank account can completely paralyze the activities of an entrepreneur. Therefore, it is best to open an account in reliable state banks or banks with foreign capital. To open a bank account, you must submit a corresponding application to the banking institution.
Individual entrepreneur or LLC: which is better for small businesses?
To create your own business, you need to choose the organizational and legal form of doing business. The legislation provides for a huge number of different options for organizing a business, however, the real choice for small and medium-sized businesses still consists of two forms: a limited liability company (LLC) or individual entrepreneurship (IE).Why is an individual entrepreneur better than an LLC?
The undeniable advantage of individual entrepreneurship is the ease of creating a business. An individual entrepreneur does not create a separate legal entity with separate rights and obligations, but only expands his rights and obligations, extending them to the scope of entrepreneurial activity. The procedure for starting and, more importantly, terminating the entrepreneurial activity of an individual entrepreneur is much simpler than the creation and liquidation of a legal entity.
Also, an important advantage of individual entrepreneurship is the ability to maintain the most simplified accounting and tax reporting, which allows individual entrepreneurs not to spend small resources on tax administration.
In what ways is an individual entrepreneur inferior to an LLC?
However, it is necessary to take into account certain disadvantages of individual entrepreneurship. An individual entrepreneur, unlike the participants of an LLC, bears full property liability. Thus, if a debt has arisen as a result of entrepreneurial activity, the individual entrepreneur bears financial liability to creditors with personal property.
Another serious disadvantage of individual entrepreneurship is the difficulty of creating a joint business. This problem is partially solved by concluding a simple partnership agreement, however, it is almost impossible to achieve the degree of integration that is achieved by creating an LLC.
Summarizing all the advantages and disadvantages, it is better to open an individual entrepreneur as the simplest and most understandable form of doing business for small businesses. If over time the need arises to expand business activities, you can always liquidate the individual entrepreneur and create a legal entity.
Who can become an individual entrepreneur?
Any fully capable citizen of the Russian Federation can engage in individual entrepreneurship. However, an individual entrepreneur can be not only a citizen of the Russian Federation, but also a foreigner or stateless person. The only condition is that such a person has the status of a resident of the Russian Federation, which must be confirmed by relevant documents.
It is important to note that current legislation does not imply any restrictions on opening an individual business if a person is officially employed.
However, government employees, as well as people holding some elected positions, do not have the right to be an individual entrepreneur. Judges and municipal service employees are also prohibited from being individual entrepreneurs. If such persons are registered as individual entrepreneurs, there are grounds for dismissing them from work or terminating their representative mandate. State employees who are not government employees (doctors, teachers) have the right to become individual entrepreneurs.
Answering the question at what age can you open an individual entrepreneur, then, as a general rule, Individual entrepreneur registration is allowed from 18 years of age. However, there are three exceptions to this rule:
- If a minor has been given full civil capacity by a court decision.
- If the parents do not object to such activities of the minor. Parental consent must be notarized.
- If a minor has entered into marriage and acquired full legal capacity.
State financial assistance: is it really possible to get it?
In the first 2 years of its activity, an individual entrepreneur has the right to receive targeted financial assistance in the amount of up to 300 thousand rubles (in Moscow - up to 500 thousand rubles).
Such assistance has a specific purpose and can be spent on paying rent, equipping new jobs or purchasing fixed assets. At the same time, the possibility of receiving such assistance directly depends on whether the entrepreneur can attract his own or credit resources to organize a business. Only if you search for additional financing, as well as provide a high-quality business plan, is it possible to receive such assistance, which can be a good help for starting a business.
There is also the opportunity to receive a small subsidy (up to 50,000 rubles) from the employment fund. To do this, you need to officially become unemployed, skillfully refuse a job offered by the state (which is quite simple), and then create your own business. Since the state saves money on monthly payments to the unemployed, the employment fund pays a start-up entrepreneur up to 50,000 rubles as one-time financial assistance. At the same time, the procedure for obtaining such a subsidy is quite complicated, so not all individual entrepreneurs take advantage of this opportunity.
The state can also provide assistance to certain areas of business activity by establishing a preferential rental rate (as in the case of educational institutions) or a special taxation regime (agriculture).
How to open an individual entrepreneur, video instructions
As you can see, opening an individual entrepreneur, despite its apparent simplicity, is associated with a huge number of nuances, ignorance of which can lead to a number of problems.
However, simplification of all registration procedures allows you to open an individual entrepreneur yourself, without spending money on intermediaries. Opening an individual entrepreneur will cost 800 rubles (fees). Also don't forget that!
You have decided to start your own business: you have an idea, a plan and agreements with investors. It would seem that all that remains is to take it and do it. But the most unpleasant thing begins - paperwork. We have compiled a checklist to help you. Follow the steps in order, and you will register an individual entrepreneur yourself.
How much does it cost to open an individual entrepreneur in 2019?
- free if you submit documents electronically, through the MFC or a notary;
- 800 rubles if you submit documents in person;
- 1,000 -1,500 rubles - for a notary, if you submit documents by mail or through a representative. When visiting the tax office in person, you do not need to have your application certified by a notary.
Step 1: Choose a tax system
Decide in advance how you will pay taxes in order to submit an application for choosing a tax system along with registration documents.
There are currently 5 taxation systems in Russia. We recommend paying attention to the simplified tax system, UTII and patent. They are created specifically for small businesses to reduce the tax burden and simplify accounting.
Step 2: Determine your type of activity according to OKVED
In documents for registration as an individual entrepreneur, you must indicate the activity code according to the OKVED directory. Identify a few codes that you are or will be working on.
Step 3: Prepare documents for registering an individual entrepreneur with the tax office
To register an individual entrepreneur you will need the following documents:
- Passport with a photocopy or its notarized copy.
- Application for state registration. If you send documents by mail or submit them through a representative, have the application certified by a notary.
- Receipt for payment of state duty 800 rubles.
- A copy of the TIN certificate. If it is not there, then the TIN will be assigned to you during the registration process.
- Power of attorney for a representative if someone will submit documents for you.
- Notification to apply the simplified tax system if you have chosen this taxation system. Prepare two copies. The tax office will take one, and the second will be marked as accepting the application.
Step 4: Submit documents to the tax office, MFC or electronically
The second way to submit documents for registration as an entrepreneur is through the MFC (multifunctional center for public services). There are such centers in every region. Call the MFC in advance and find out if they accept documents for registration. Not everyone does this. MFCs in Moscow accept documents only if you have a residence permit in the Basmanny District.
If you can’t come in person, send the documents to the tax office by mail or submit them through a representative by proxy. But before that, get your application and a copy of your passport certified by a notary.
The tax office will give you a receipt confirming receipt of the documents. Save it, you will need it when you pick up your individual entrepreneur registration documents.
Electronically
What to do after registering an individual entrepreneur
- . In 7 lessons, he will help you figure out how, when and what reports to submit, how to draw up documents, and how to properly receive money from clients.
- Receive a year in Elba as a gift - a web service that calculates taxes and helps you submit reports via the Internet. For entrepreneurs without an accountant or accounting knowledge. We give young individual entrepreneurs who are less than 3 months old, one year of service at the Premium tariff. This is the most comprehensive tariff: it includes tax calculations and reporting for individual entrepreneurs and employees, preparation of documents for transactions, work with goods and consultations with an accountant.
To register an individual entrepreneur in your name, you will need to prepare several documents of a certain type for the tax authorities.
Documents for opening an individual entrepreneur
To assign an individual the status of an individual entrepreneur, you will need only 4 documents (and in some cases even 3): an application for registration of a person as an individual entrepreneur in the form P21001, an application for transition to the simplified taxation system (simplified taxation system), a receipt for payment of the state duty and a copy of the passport .
You can prepare a complete package of documents for opening an individual entrepreneur automatically using this.
Application for registration of an individual as an individual entrepreneur. It consists of four sheets; forms to fill out can be downloaded from the Internet. The first two pages indicate the personal data of the individual (full name, registration address, passport details, etc.). The third sheet should contain information about the type of activity of the future entrepreneur. It is recorded in code form in accordance with the All-Russian Classifier of Economic Activities.
The last form is a receipt confirming the accuracy of the specified information and directly an application for registration of an individual entrepreneur.
Receipt for payment of state duty. It can be found on the Internet in electronic form and can be easily filled out according to the sample. All the necessary details are listed on the Federal Tax Service website in a special section dedicated to state registration and accounting.
Application for transition to the simplified tax system. Such a document will allow the entrepreneur to pay less taxes than under the standard system. Simplification is most typical for small or medium-sized businesses.
This application is prepared in two pieces. It is not necessary to submit it when registering an individual entrepreneur; this can be done within 30 days from the date of assignment of the status of an entrepreneur. But it’s better to do everything right away to avoid further paperwork and additional trips to government agencies.
A copy of the passport is the final document that is required to begin the process of considering an application to register a person as an individual entrepreneur. As a rule, it is enough to provide two main spreads - with personal data and information about registration. But sometimes they may ask for copies of all pages containing any information.
Where to register an individual entrepreneur
When all the documents described above have been collected, they must be taken to the tax office located at the place of registration of the individual who wants to become an entrepreneur. Along the way, you should go to any Sberbank branch and pay the state fee. This particular bank is listed for a reason - other organizations simply do not accept such payments.
A week after successful receipt of documents, you will need to visit the Federal Tax Service again to pick up a registration certificate.
