Differences between a limited liability company and individual industrial and commercial households

Individual industrial and commercial households refer to an economic form in which the production materials belong to the private ownership and are mainly based on individual labor. Individual industrial and commercial households have three organizational forms: Personal operation, family operation, and personal partnership operation. Individual industrial and commercial households have unlimited liability for debts, so individual industrial and commercial households do not have legal personality.

1. Individual users may become average taxpayers or small-scale taxpayers, depending on the business scale and the degree of perfection of accounts.

2. Small-scale taxpayers do not apply to the value-added tax system, and are taxed at a rate of 4% (commercial) or 6% (industrial. Special VAT invoices cannot be used.

3. Generally, taxpayers can receive special VAT invoices and apply the deduction system. The taxable amount = export tax-import tax. The tax rates include 17% (basic tax rate) and 13% (preferential tax rate ).

A limited liability company differs greatly from individual industrial and commercial households in terms of registered capital, taxation, and legal liability.

I. Different registered capital requirements

1. When individuals register for industry and commerce, there is no minimum requirement for registered capital.

2. When registering a Company Limited, its minimum registered capital is RMB 30 thousand, and the minimum registered capital of a one-person Company Limited is RMB 0.1 million.

II. Advantages and disadvantages of individual industrial and commercial households

Individual industrial and commercial households apply for registration procedures are relatively simple, with less fees and more flexible operation. The disadvantage is that the credit and reputation are lower than the company's, and the contract cannot be signed in the name of the individual business license.

III. Differences between a limited liability company and a self-employed company

1. Individuals do not enjoy preferential policies, have no investment risks, and do not need to make accounts. A limited company needs to make accounts and tax returns every month to enjoy preferential tax policies.

2. Individual industrial and commercial households cannot apply for a ticket increase with a tax rate of 17%. They can only apply for small-scale taxpayers (3% ). A company limited can apply for a 17% VAT invoice for general taxpayers.

3. Different Legal Liabilities

If individual businesses lose money in their business, you have to be responsible for all your debts. If a limited liability company loses money in doing business, it can apply for bankruptcy protection from the court. If the registered capital of your company is 0.5 million, and you owe 2 million yuan to others, you only need to pay 0.5 million yuan, and protected by law, you cannot be taken by others.

4. Different tax and tax calculation methods

Individual industrial and commercial households generally estimate your sales based on their location, size, number of employees, sales of goods, and so on, and then give a tax. regardless of the amount of income in the current month, whether or not there is any income will be taxed according to the tax amount.

While a limited liability company usually requires enterprises to have a sound accounting, and to have an account, the tax is also based on the company's own declared income to pay taxes, if there is income to pay, do not pay.

Individual industrial and commercial households or sole proprietorship enterprises only pay personal income tax. The business income of a limited liability company is subject to both enterprise income tax and individual income tax.

The taxation of individual industrial and commercial households or sole proprietorship enterprises is generally based on the fixed rate. The taxation of a limited liability company is based on the invoice during business transactions, the collection of income links is generally approved or checked.

5. The company's articles of association are not required when registering individual industrial and commercial households, while the company's articles of association are required when registering a limited liability company.