the difference between corporate and personal business

The occasion where starting a business is examined, that you think whether it begins operating at proprietorship, whether corporate body is established, whether the case which is perplexed it is many.While also the guide receives starting a business consultation, whether either one is good there is many a thing which receives consultation is.In order to become reference of judgment only of the reader, it will keep seeing at proprietorship the legal difference and the respective merit of corporate body, concerning demerit.It tries advising from present starting a business support experience of the guide, concerning the standard of the judgment.

Proprietorship and legal difference of corporate body

Private corporate body and the respective merit, there is a demerit.Those which are agreeable to your own business will be ascertained

Proprietorship the individual becoming subject, does business on self responsibility, those to which the business main thing owes all responsibility.As for corporate body it is something which can recognize the fact that other than of the human becomes subject (corporate body case) of rights and duties with respect to law.In other words, in case of corporate body because the individual it becomes another corporate body case which is separated, separating also the responsibility which it occurs from there with the business main main person, it means that corporate body owes.

For example, when doing business, when you borrow, in case of proprietorship it is borrowing the business main main person.Failing temporarily at business, when it becomes not be able to pay back, even with selling the property of the business main individual, it does not return and the te does not become.if the corporation is a separate legal entity, so individual, the repayment within the scope of the property of the corporation rather than individual borrowing management and borrowing of the corporation only. need to repayment from private property owner does not have (but, if his owner had been a personal guarantee for the borrowing is excluded) .

benefits of personal business

the benefits of personal business that takes less effort and cost management, that can be started immediately. also does not require registration also create articles of incorporation, if you submit a notification such as tax office opened in, you can start immediately. accounting, operation is simple, such as tax, it is that no cost benefit. i bought a book and accounting software, 1year1time, you could also do a tax return without having to ask your tax accountant if your best time of final return.

benefits of corporate

high social credit
high credit quality corporate social, can say with confidence of trading partners is also easy to obtain compared to the individual. the case of an individual to reverse, social credit is low in comparison with the corporation, in such transactions with leading companies in particular, you may not get to open an account and trading corporation unless it is.

susceptible to loans from financial institutions
the case of personal business, such third parties are required to guarantee people trying to borrow from financial institutions, current situation is that is is quite difficult to get a loan. compared to that, the door of corporate financing has been widely held. if the corporation is or can be found on the copy of the registration of certain resources that are capital, also a clear distinction between business and private assets. you are asked rigorous accounting process is compared to the individual, general creditworthiness will be higher as seen from the financial institutions.

pay a salary to owner
sole proprietor to pay his salary can not be, corporation tax will be expense in order to be able to pay the executive compensation to the owner. if you pay the executive compensation, calculation of income tax and resident tax on management’s, can also deduct expenses that considers the need for payroll deduction, tax savings will be possible even there.

pay a salary to family
if the corporation, once you have registered as an officer of the family, executive compensation of ten thousand yen to pay a number of months, even non-executive director can be. by this, management’s income tax and income distribution, it is possible to tax a tax residents. even if the sole proprietor, pay the salaries of certain family is available for. but, such as the need to notify the tax office in advance to blue return, there are many constraints.

possible to the life insurance premium expenses of the company management’s
if the sole proprietor has joined the life insurance, life insurance premiums deduction of income tax will be applied, upper limit of the life insurance deduction of the general5million yen, life insurance premiums of private pension deduction limit5a total of ten thousand yen10can be tax-deductible to the extent of ten thousand yen. and life insurance corporation’s management., corporate subscribers, the insured owner, if the recipient corporation has insurance, of the corporation has paid insurance premiums, can be an expense of a certain percentage depending on the type of insurance company. there is no maximum amount of life insurance premium deduction, such as sole proprietors.

can borrow a housing officer
if the corporation, rent about the company by borrowing in the name of home residence for officers5expenses as rent to the housing to about 30% is possible. the case of personal business, such a thing can not be.

easier to collect the best talent
compared to personal business, corporation is more advantageous to the time of recruitment. employment because of poor image and say to the personal business, it is difficult to collect quite a talent, this point will be dispelled if the corporation.

deduction of the deficit can be carried forward
the case of personal business, if the declaration deficit blue3that can be carried forward only year (loss carryforward deduction) . if the corporation, the deficit7it is possible to carry forward years. when there is a scene, such as if you recorded a significant deficit, overwhelmingly advantageous to found the corporation tax.

it is possible to protect the personal property
if you have failed in business if, the case of personal business, you need to repay the debt even if it sold the personal property. in contrast, i have an obligation to pay the debt if the corporation is within the scope of corporate assets, payment obligations extend to personal property does not have.

the disadvantage of the corporation

when the cost of entrepreneurship25million yen~30need ten thousand yen
the case of personal business, registration also create unnecessary articles of incorporation. you can start your business in less cost much. if the corporation is to create articles of incorporation, articles of incorporation authentication, registration is required, such as establishment. the approximate cost is25from ten thousand yen30it takes about ten thousand yen.

accounting and tax treatment is difficult
the case of personal business, every year3month15you must file a final tax return of income tax by day. simply, if the final return of personal business, level can handle yourself in a somehow if you use accounting software for a pc i bought a book in their own. if the corporation, processing is required strict accounting compared to personal business, corporate accounting, with respect to tax returns, so esoteric, first, it is not impossible and professional tax and accounting, such as tax. if the corporation, support for the accounting firm will be required, the minute cost that.

costly social insurance premiums
if the corporation, social insurance (health insurance, welfare pension insurance) place of business will be enforced, you must be sure to join social insurance. health insurance premiums, pension insurance company about half of the burden, approximately half is borne by the employee’s personal officer. although there are social insurance burden is disadvantage of this corporation as, guarantee of future pension is also generous compared to the national pension and personal, also has the additional advantage of being able to get the security commensurate with the cost.

there is a limit on tax expense accounts
if the corporation, disallowance of entertainment expenses by the amount of capital and annual year-end (the calculation of the tax, expenses can not be put into) may be to. personal business what you need about the course of their duties is to be recorded as an expense as it is necessary is possible, such restrictions do not have corporate.

incorporation or personal business or to register! n/a

individual or corporation or, judgment should be comprehensive

founded in individual and corporate business as above, own advantages, since there is a disadvantage, i think that there may hesitate whether to.

as a criterion which is said to be in the world is well,

• in a private business2incorporated after receiving the maximum tax exemption of annual consumption, further2year if they get a tax exemption4tax exemption of the year can become possible
• income million yen at the break-even point is, those who make more than incorporation and when it comes to tax

is such that. actual, is good or contact us for their own personal business from guide, it is often asked about the criteria for determining good or incorporation. simply, that time, it is always to convey, not only tax, it is necessary that determine overall. there is no business in just a matter of tax loss and gain of a little.

is also necessary from the world of credit, if you want to do business on a scale of to some extent, than to enjoy the benefits of tax, will be that big is better to extend the business itself to incorporation. listening to the circumstances from the consultation also guide, in many cases is to recommend that the final incorporation.

eventually, can be considered as soon as the future vision and enthusiasm of entrepreneurs.

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