How can i convert to LLC?

  1. What does the law say?
  2. Procedure
  3. Difference of SP from LLC

The frequently asked question of whether it is possible to transfer a PI to an LLC has a clearly negative answer. After all, both of these concepts imply completely different phenomena. An LLC is a legal entity, and an IP is the status of an individual who operates without a legal entity. The only true would be the closure of the IP and the establishment of the IP personally or with other founders. The law does not prohibit being both an individual entrepreneur and being part of the founders.

What does the law say?

The civil code of the Russian Federation in its article 23 confirms that from the very moment when a citizen registered as an individual entrepreneur, he has the legal right to engage in entrepreneurial activities The civil code of the Russian Federation in its article 23 confirms that from the very moment when a citizen registered as an individual entrepreneur, he has the legal right to engage in entrepreneurial activities. At the same time, it is not necessary to form a legal entity.
As for the Limited Liability Company, several people can act as founders. Moreover, the share capital will be divided between them into equal shares. All income and expenses will be shared between the founders in proportion to the value of their shares.

Procedure

If the entrepreneur has decided to get rid of the status of an individual entrepreneur, then it is necessary to act quickly enough to avoid additional cash costs. To begin with, it is necessary to fully repay all arrears of contributions, deregister from the Pension Fund of the Russian Federation, fill out an application, certify your signature with a notary, pay a state fee and carry it along with the application to the tax authority. After consideration of the application, which will last about five days, it is necessary to pick up the certificate of termination of activity as an individual entrepreneur. That's all. Next you need to act in the direction of registration LLC. The procedure for registration Ltd. is not so complicated. It can vary only depending on how many founders will decide on the establishment. If the founder is one, then his independent decisions will be enough. If there are two or more founders, then it is necessary to draw up the minutes of the meeting of the founders with the decision making.

Difference of SP from LLC

What is the difference between IP and LLC ? The activity of the individual entrepreneur is characterized by the fact that all the money he earned

gets himself. As for the LLC, all the money, called income, must be transferred to the account of the legal entity. The founders can not so easily take and dispose of these funds. These must be informed decisions.

    Based on all the above, we can conclude that the entrepreneur has two options for resolving this situation.
  • He can get rid of the status of IE and register an LLC, or become its founder.
  • He may not get rid of the status of the individual entrepreneur, however, simultaneously register an LLC in his own name or become one of the founders of the LLC.

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