We guide entrepreneurs through the whole process of individual entrepreneurship registration, from selection of NACE codes, determining the taxation group and single (consolidated) tax rate to registering within state authorities, receiving EDS keys and opening bank accounts.
A legal definition of an individual who engages in business activities for the purpose of making a profit is an individual entrepreneur (IE, in Ukrainian the abbreviation “FOP” is used). Along with this, other definitions are often used in everyday life, including, a private entrepreneur (PE). The concept of “subject of entrepreneurial activities” is also used, which covers not only individuals, but also companies (legal entities). Patriot.Legal, as a business-oriented law firm, provides IE registration services, including tax registration and other actions for the full launch of a new business. Experience in the field of services for businesses allows us to clearly highlight the advantages of an individual entrepreneur as an organizational and legal form of management:
The most significant risk of IE in comparison with business companies (in particular, LLC) is the liability of personal property for debt obligations.
With the development of a market economy, Ukraine is strengthening the regulatory framework that affects business. The right to legal entrepreneurial activity is secured by Article 42 of the Constitution of Ukraine. The main legal aspects regarding the functioning of IE are regulated by the provisions of Chapter 5 of the Civil Code, as well as some articles of the Commercial Code (Article 128 “Citizen in the field of business” inclusive). All legally capable persons with the age of 18 years and older are allowed to carry out entrepreneurial activity, except for certain categories of citizens (civil servants, military personnel, law enforcement officials, judicial authorities and prosecutors). Legislation enshrines holding the mandatory state registration of a IE (FOP). This procedure is regulated by law No. 755-IV “On state registration of legal entities, individual entrepreneurs, public organizations” dated 05.15.2003.
At the start of any business, a businessman should clearly understand some points. If you have any doubts about the registration of individual entrepreneurship, ask a question to the lawyer of Patriot.Legal. Most often, our consultation includes getting answers to the following questions:
To register a IE (FOP) in our country, you must fill out an application for state registration (form No. 10). The application form is approved by the relevant order of the Ministry of Justice. The following data is entered into the form:
The application should be completed in Ukrainian. In addition to it, a package of documents that are submitted by the state registrar/notary/local government must include a copy of the passport and TIN, as well as a power of attorney for the lawyer (if the registration services are carried out by this specialist).
On the date of the recording of a new subject of entrepreneurial activity in the Unified State Register (USR), the technical administrator transfers information to the statistical authorities, the tax service and the Pension Fund of Ukraine. Together with the documents, you can submit an application for choosing a simplified tax system/application for the voluntary payment of VAT.
Payment of a specific list of taxes, including: Personal income tax – 18%, military duty – 1.5%, single social contribution – 22%.
A tax calculation mechanism in which a single contribution is levied instead of individual taxes. Entrepreneurs are allowed to keep simplified accounting. The legal issue regarding taxation is resolved in the framework of our advisory services beforehand, even before the registration procedures begin. Keep in mind: that there are 4 groups among single taxpayers. The choice of a specific group is related to the types of activity, the volume of annual cash turnover, the possibilities of relations with foreign contractors, and a number of other factors. The assistance of a lawyer in this case helps prevent many risks, avoid the re-registration procedure in the near future. The result of registration of an individual entrepreneur with the tax service is to obtain a single tax/VAT payer certificate. However, upon the request of the client, the specialists of Patriot.Legal also accompanies the receipt of EDS keys (electronic digital signature) and conclusion of an agreement on EDS keys with the tax service (the State Fiscal Service). Such agreement in the future allows you to send tax reports electronically.
An important step in the tax registration of individual entrepreneurs with a simplified taxation system is the establishment of a special accounting book, where all income/expenses are recorded during the conduct of entrepreneurial activity. The income accounting book can be kept in paper form or in electronic form. There are strict requirements for filling out. Before filling out the book, it is necessary to get registered with the tax office, which, upon the request of the client, is included in the services of our company. It is important to note that if an entrepreneur ignores the requirement to keep an income book, then administrative liability (penalties) is charged.
According to Decree of the National Bank of Ukraine No. 492 dated November 12, 2003, it is forbidden to use current accounts of individuals to carry out business. An individual entrepreneur is required to open a separate bank account for non-cash payments. Without opening such account, it is permitted to conduct solely cash transactions. The cost of a certain package of services for registration of IE by specialists of our company includes support of the procedure for opening a bank account. We talk about collecting and submitting documents for the preparation of a card with sample signatures and a seal imprint (if the entrepreneur uses a seal). Opening an account and further banking services is one of the important steps to prevent possible penalties of the tax service in relation to a new entrepreneur.
Information about the whereabouts of a businessman is entered into the Unified State Register. Registration of a IE (FOP) can be carried out only in the city or in the region where the businessman’s residence is registered. Moreover, there are no territorial restrictions on the further conduct of business in the legislation. The services of our law firm include the provision of a residence permit in the city of Kyiv for a period of 1 year. This service is convenient for people from regions living in the capital. We provide official registration by concluding a lease agreement with the owners of residential premises. Registration is carried out through the Center for the provision of administrative services with the personal presence of the person concerned. As part of this information material, we could not take into account all the details that are important to you. Feel free to ask your questions, and we will be pleased to answer them!
Full range of services for registration of an individual entrepreneur. From your tasks, we advise on each FLP registration package and offer the best option.