The concepts of "individual entrepreneurship" and "legal entity" mean two different forms of business in Azerbaijani legislation. An individual entrepreneur refers to a person who owns a business without creating a legal entity and is subject to a certain amount of tax, while a legal entity refers to a company or organization that is a legal entity.
What is sole proprietorship??
A sole proprietor is considered the only person legally responsible for managing the property or business he owns. They fully own the resulting profits, meaning they are not responsible for distributing the profits.
What are the advantages and disadvantages of sole proprietorship??
The main advantage of the individual business form is that it is very easy to create. Also, an individual entrepreneur can create certain comforts in management, as he has a direct decision in the management of the business along with the profit. But the risks of sole proprietorship are great, in this case the business owner can lose all his property and capital.
HWhat is a legal entity??
A legal entity is a legal entity in the form of an organization or company. Legal entities, unlike individual entrepreneurs, can perform a number of legal transactions. Legal entity owners distribute all or part of the profits of the company or organization among the founders.
HWhat are the pros and cons of creating a legal entity??
Although the creation of a legal entity is difficult in some cases due to the form of sole proprietorship, the fact that the founders of the legal entity have limited liability, that is, their personal capital cannot be used to pay the debts of the legal entity, makes it a less risky business form. Also, due to the form of individual entrepreneurship, access to financial resources - loans and investments is easier.
Macis Consulting as a company, we provide a number of services to business owners who want to operate both as an individual entrepreneur and as a legal entity. Our company has been providing its business partners with both forms of business creation, accounting services, audit and legal process services for years. Contact us get all the accounting, financial and legal services your business needs.
