An Individual Entrepreneur (FOP) independently makes all business decisions and bears full liability with their personal assets. FOPs may hire employees, although there are restrictions depending on the tax group (Group 1 FOPs cannot hire staff; Group 2 FOPs may employ up to 10 individuals). There is no requirement to form authorised capital, but the scope of permitted activities may be limited.
Under the simplified taxation system, FOPs are not required to maintain accounting records. They may transfer funds from their business account to a personal account for cash withdrawal without supporting documents. FOPs may also operate and accept cash payments without a cash register (until 2022). However, the single social contribution (SSC) must be paid monthly, regardless of business activity or income.
A Limited Liability Company (LLC) may have multiple founders, with each bearing liability up to the amount of their contribution to the authorised capital. An LLC is managed by a director who can hire an unlimited number of employees. There are no restrictions on the types of activities it may engage in. However, LLCs must appoint a director and ensure proper accounting, salary payments, and deductions of all mandatory contributions. Taxes are paid as a percentage of turnover or profit, although certain LLCs may qualify for the simplified tax regime under specific conditions. Cash withdrawals and payments must be supported by documentation and are made exclusively via a cash register.
