How to register an individual entrepreneur yourself: guidance and tips

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November 18, 2021

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Any citizen over 18 years of age without serious mental problems can open an individual entrepreneur in 2022 in Russia. To do this, you need to write an application to the tax service. This will not take much time, however, first you need to decide on the most favorable conditions for you. We tell you in this article how to do everything quickly, correctly and at minimal cost.

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What is IP and who is it suitable for?

An individual entrepreneur (IP) is the status of an individual with whom you can:

legally conduct business on an ongoing basis in order to make a profit and dispose of it at your own discretion;
enter into contracts with partners, suppliers and employees for any period;
cooperate with legal entities persons.

In fact, while remaining an individual, an individual entrepreneur is endowed with the rights of a legal entity with only one exception - he conducts business at his own peril and risk, that is, he is liable with his property in the event of bankruptcy.

What happens if you run a business and don’t register an individual entrepreneur?

If you receive revenue from a business and have not registered the status of an individual entrepreneur (either self-employed or LLC), then you are engaged in illegal business and are evading taxes. For this you may incur administrative and criminal liability - at a minimum, you will have to pay fines. Read in detail about administrative fines and monetary penalties.

Therefore, in order not to lose your earned money and your own nerves in litigation, it is better to immediately do everything within the law. You can not only live in peace, but also openly scale your business.

You can register an individual entrepreneur if:

you are not a municipal or government employee;
you are over 18 years old;
you are over 14 and your parents are not against your business;
you are a non-resident with the right of temporary or permanent residence in the territory of the Russian Federation;
you have not been declared incompetent by a court.

Features: pros and cons

An individual entrepreneur is not only a legal form. It is also a living mechanism filled with meaning. As a person. With its own advantages and disadvantages.

Minuses	pros
Responsible for debts with personal property.	Easy to register and liquidate.
There are restrictions on types of activities. The ban includes, for example, alcohol, the production of medicines, aircraft (development, production, repair, transportation), any activity related to weapons and ammunition, etc.	Fines are much lower than for legal entities.
You cannot select a business name during registration. Individual entrepreneurs are registered only in the last name, first name and patronymic of the applicant.	Lower tax burden than legal entities; you have the opportunity to choose one or more special taxation systems: different for different types of activities.
You can't sell a business.	You can open branches in other cities without additional registration.
In bankruptcy, debts are not written off.	The ability to freely manage your profits.
In rare cases, large companies do not cooperate with individual entrepreneurs.	Simple document flow and rare checks.

These are the key features of the individual entrepreneur status. We will tell you in detail how you can get this status, and now we will tell you how to prepare for launching a business. It is better to do this before submitting documents for registration.

Step-by-step instructions for registering an individual entrepreneur in Kaliningrad yourself

First, we will briefly list all the steps for registering an individual entrepreneur, and below we will consider each of them in detail so that you can do everything yourself.

Step 1. Fill out an application for registration of individual entrepreneurs according to form P21001.
Step 2. Select a tax regime and fill out a notification for its application.
Step 3. Pay the state fee (optional).
Step 4. Submit documents for registration.
Step 5. Receive confirmation of successful registration.
Step 6. Open a current account.
Step 7. Choose a method of accounting and reporting.

You also need to perform simple steps after registering an individual entrepreneur. Below we will look at everything in order.

What to do if you decide to open an individual entrepreneur

Select type of activity

In other words, choose a product niche and services that you will provide. It is important to decide on this in advance in order to quickly and correctly indicate OKVED codes when applying for an individual entrepreneur. We will write more about the codes below.

Choose a tax system

If you are not strong in accounting, we recommend consulting with an accountant to choose the most favorable tax regime and pay less taxes. Yes, this is possible! Read about the special tax regimes of the Russian Federation, which were created to support small and medium-sized businesses.

And after that you can collect and submit documents.

Do you need a business plan to register an individual entrepreneur?

No. A business plan is not needed to open an individual entrepreneur. Only if you do not apply for government subsidies. If you want to receive financial support from the state, then you need a business plan.

Government subsidy for small businesses

The Russian Federation has support programs for some areas of activity. Your business meets the criteria - get money for start-up and development. But you will be required to report on your expenses.

Conditions for receiving government subsidies:

you are under 35 years old;
you are unemployed and registered with the employment center;
you are not yet registered as an individual entrepreneur;
you have a minor child and you need improved living conditions;
you have no loan debts.

If you meet all the conditions, you can try to get a subsidy. To do this, you must submit an application before registering as an individual entrepreneur. Along with your application, you submit a prepared business plan. We will tell you how to compose it and what it should look like in a separate article.

Tax holidays after opening an individual entrepreneur

In the event that you register as an individual entrepreneur for the first time after the adoption of the regional law on tax holidays, you can qualify for a zero tax rate under the simplified tax system and special taxation system. You can avoid paying taxes for a maximum of two years. Specific types of activities for which tax holidays are established are determined by regional law. You need to find local regulations to understand whether your activity qualifies for this benefit or not, and what other requirements need to be met.

Preparing documents: detailed instructions

First, decide whether you are collecting documents yourself or delegating this task to someone else. The last option is suitable if you do not live at your place of registration or want to save your time and effort. However, registration in this case will cost a little more.

Who can prepare documents for you

For a fixed fee, specialized companies can correctly fill out the documents and go through all stages of registration and submission with you. Some banks also provide this service. Convenient if you are going to open an account in this particular bank.

It is not difficult to prepare the documents yourself. We will tell you in detail what documents are needed and how to fill out the application correctly.

What documents are needed if you submit documents yourself?

To register an individual entrepreneur you need:

passport;
TIN;
application on form No. 21001;
receipt of payment of the state duty (if you submit the application to the Federal Tax Service in person);
UKEP (if you submit documents remotely).

Let's talk about each point in detail.

Passport

You need a passport.

This is simple if you are over 18 years old. If you are under 18, then you need one more document - a notarized consent of both parents or adoptive parents.

TIN

Taxpayer identification number.

Certificate of registration with the tax authority of the Russian Federation

You have it - hurray. If you haven't yet, you'll have to get it. To do this, go to the tax office with your passport and fill out an application. The TIN will be ready in a week.

Find your tax office or make an appointment.

If you don’t want to go to the tax office to get a TIN, you can submit an application online through the Federal Tax Service website, MFC, or use postal services. By mail, send a registered letter to the tax office with notification of receipt. The letter contains a package of documents: photocopies of the passport (basic data and registration), a document confirming registration at the place of residence, and a completed application form in form No. 2-2-Accounting. You will also receive the completed TIN certificate to the postal address you provide in the application. If you apply for a TIN by mail, write in the comments how long it will take. Many people will be interested.

State duty

You pay 800₽ only if you submit the application personally to the tax office.

Generate and pay for a receipt on the tax service website. Another option is to print and pay for the receipt at the terminals. They are installed in most banks and MFCs.

Statement

The application consists of 4 pages. .

One of them is for foreigners. If you are not a foreigner, then you only need to fill out three.