What is the difference between a company and an individual business owner?

1. The difference between a self-employed person and a company

1. Legal person qualification

A self-employed person does not have legal person qualifications, but a company does.

2. Joint and several liability

Self-employed individuals have unlimited joint and several liability, while limited liability companies have limited joint and several liability.

3. Tax preferential treatment

For self-employed businesses, the tax authorities generally set taxes on goods sold based on the estimated sales volume based on the size of the location and the number of employees. Regardless of the amount of income in the month, whether there is any income Taxes must be paid according to the fixed tax amount.

The company requires enterprises to pay taxes on their own declared income. Small-scale taxpayers whose quarterly income does not exceed 90,000 yuan can enjoy tax-free preferential policies.

4. Types of taxes collected

Self-employed individuals can collect fixed-amount value-added tax and pay personal income tax, etc.

Company taxes are levied on actual income and pay value-added tax, corporate income tax, etc.

2. The account of the company’s legal representative does not affect the establishment of the company. The legal representative of an enterprise is the person in charge who exercises authority on behalf of the legal person in accordance with the provisions of the law or the legal person's articles of association. Under normal circumstances, the main administrative person in charge of enterprises, institutions, agencies, groups and other economic organizations is the legal representative, such as managers, factory directors, directors, chairman, etc. It has nothing to do with local household registration or foreign household registration. Just use the ID card of your main person in charge to be the legal representative of the company.

Extended information

Reasons for recommending company registration

1. Self-employed individuals cannot transfer but companies can

Self-employed operators cannot be like In that case, the company can be transferred. According to Article 10 of the "Regulations on Individual Industrial and Commercial Households", "If an individual industrial and commercial household changes its operator, the new operator shall apply for registration again after deregistration."

2. Self-employed individuals cannot open branches but companies can

A self-employed person can only have one business location, and one person can only register one self-employed person. A company can not only establish branches and subsidiaries but also establish enterprise groups.

3. Self-employed individuals cannot attract investors and partners, but companies can

Self-employed businesses are run by individuals and bear unlimited legal liability. Moreover, self-employed individuals do not have shares. , no one wants to partner or invest in a self-employed person.

4. The business risks of self-employed individuals are relatively high

The biggest difference between self-employed individuals and limited liability companies is that self-employed individuals bear unlimited liability. If you open a small restaurant and something goes wrong with the food, you have to use all your wealth to compensate; if it is a company, it is limited to the amount of capital invested, so that it will not go bankrupt.

5. Self-employed individuals enjoy relatively few support and reward policies.

The main purpose of being self-employed is to provide food and clothing for a family. As for expanding the team to grow and become an industry benchmark, this If it is not a requirement for self-employed people, the state will naturally not take into account various support and reward policies for self-employed people in various basic industries.

6. Corporate system is the development trend

Nowadays, doing business, negotiating cooperation, signing contracts, etc. are all carried out between companies, and Internet platforms such as Taobao and WeChat are supporting Corporate merchants. Compared with companies, the presence of self-employed people will become weaker and weaker.

Reference materials: Legal representative of the enterprise - Baidu Encyclopedia

Self-employed - Baidu Encyclopedia

Company registration - Baidu Encyclopedia