A sole proprietorship is a small-scale taxpayer, a private enterprise that is not a company, that is, it has no legal personality.
Of course, there should be a legal representative, which consists of name, type, business scope, investor, date of establishment and address.
Advantages of a sole proprietorship:
1. It is easy to establish, does not need to negotiate with others, and has little registered capital (a sole proprietorship enterprise has no limit on its registered capital, which generally does not exceed 100000 yuan, and does not need to pay in).
2. The fixed cost of operation is low. For example, the government has less supervision on it and no restrictions on its scale. It is easier for enterprises to coordinate internally.
3. Sole proprietorship enterprises are exempt from corporate income tax, and there is no dividend tax for shareholders. When there are several quite independent businesses, you can set up multiple independent businesses, reduce the income tax of each enterprise, and achieve the effect of tax saving;
4. The external laws and regulations of the enterprise have less restrictions on the operation and management, decision-making, entry and exit, establishment and bankruptcy of the enterprise.
Disadvantages of a sole proprietorship:
1. The owner bears unlimited liability for the debts of the enterprise. Sometimes the loss of the enterprise will exceed the owner's initial investment in the enterprise, and the owner needs to use other personal property to repay the debts;
2. The duration of the enterprise is subject to the life of the owner;
3. It is difficult to obtain a large amount of funds from outside for operation.
Disadvantages of a sole proprietorship:
1. At present, the annual invoicing limit of the sole proprietorship enterprises (approved for collection) applying for small-scale taxpayers is 5 million yuan.
If it exceeds the limit of 5 million yuan, it will automatically be transferred to the general taxpayer.
2. Compared with a limited liability company, a sole proprietorship enterprise bears unlimited liability. Therefore, a sole proprietorship enterprise is not suitable for industries with high risks. It is better to do consulting and service industries;
3. The continuity of the enterprise is poor and the anti risk ability is poor, because the sole proprietorship enterprise is basically operated and developed by the individual investor, which has certain limitations.
Everything has two sides, and the same is true for a sole proprietorship enterprise. When making tax planning for enterprises, if we can take into account various factors,
Making good decisions can ensure the successful establishment of a sole proprietorship enterprise, which will also help the tax planning of enterprises.
1、 Benefits of Incorporation:
1. The company has a legitimate business entity, which can cope with government inspection in its daily business activities. It is not afraid of inspection, and enjoys broader protection of national policies.
2. The need to cooperate with customers and operate with certificates. Undoubtedly, opening a company is the first step to regularize and legalize operation. Just imagine that under the same price and conditions, everyone will generally choose a company with complete qualifications as a partner, which, to a certain extent, has a considerable role in improving the credibility of enterprises and the integrity of entrepreneurs.
3. To bear limited legal liability, the shareholders shall bear corresponding repayment liability for the debts of the Company to the extent of their capital contributions. Minimize the operational risk of shareholders.
2、 Disadvantages of registered companies: the business license will be revoked by the industry and commerce department if the company is not cancelled or the annual inspection is not conducted. The legal representative and shareholders' meeting of the revoked enterprise will be blacklisted by the industry and commerce bureau, and the company can not be re registered in its own name within three years. Tax will be permanently included in the monitoring blacklist. If the company is re registered, it will be fined by the tax authority for retroactive tax payment; The legal persons and shareholders of the company will enter the personal credit information system of the People's Bank of China to restrict bank loans, going abroad, immigration, pension insurance, etc.
The advantages and disadvantages of a sole proprietorship enterprise are as follows:
Advantages of a sole proprietorship:
1. The establishment of a sole proprietorship enterprise is simple, its finance is simple, and its taxation is simple.
2. The ownership, control, management and income of enterprise assets are highly unified.
3. The owners of enterprises are responsible for their own profits and losses and unlimited liability for the debts of enterprises, which has become a tough budget constraint.
4. Individual proprietorship enterprises have low operating costs.
5. The external laws and regulations of the enterprise have less restrictions on the operation and management, decision-making, entry and exit, establishment and bankruptcy of the enterprise.
6. Individual proprietorship enterprises generally do not have too large scale and too many businesses. It is convenient for enterprises to cancel.
Disadvantages of the sole proprietorship:
1. It is difficult to raise a large amount of funds.
2. Investors have huge risks.
3. The continuity of enterprises is poor.
4. The basic relationship within the enterprise is the employment labor relationship. The difference between the interests and goals of both labor and capital constitutes a potential danger to the efficiency of the internal organization of the enterprise.
5. The debts of a sole proprietorship enterprise shall be covered by the property of the natural person investor, who shall be jointly and severally liable for the debts.
6. It is difficult for a sole proprietorship enterprise to improve its brand effect. Generally, it is difficult to improve its reputation without venues and personnel.
