COMPARISON BETWEEN HOUSEHOLD BUSINESS AND ENTERPRISES (ADVANTAGES - DISADVANTAGES)

Create at: 25/09/2019 10:12

Tax Consulting Company - Tax Agent TASCO would like to offer a comparison table to help readers better understand the pros and cons of establishing business households and businesses as follows:

Compare	Household business	Enterprise (Type of limited company, joint stock company)
ADVANTAGES	- Suitable for individuals or groups of individuals who want to start a business or a small business, do not require a clear organizational structure, management, and no plans to expand in the future.	- Having legal status to separate company assets from investors' assets
	- Compact accounting system, easy to declare, can register for the presumptive tax method	- The production and business are methodical, according to the process. Have a specific organizational structure and activities.
		-No limit the number of employees allowed to use directly
		-No limits on the size, capital and location of the business
		- Enterprises will be able to deduct the purchase tax with valid invoices (if choosing the withholding tax method) - Enterprises are allowed to borrow money from banks or call for capital from investors to expand production and business
DEFECT	- Without legal status, investors must use their assets to repay debts if the business household makes a loss	-Often having to meet working conditions, social insurance for employees is stricter and more complete than business households.
	Small operation properties
	-No support from laws regulating strictly organizational structure, operations, rights and obligations of investors.
	-Only employ less than 10 direct employees
	-Only one location can be registered, and cannot open more branches or business locations at another address
	-Each individual can only represent one business household
	-Because tax is paid according to the presumptive tax method, even if the business is at a loss, it is still required to pay the tax rate on the turnover as prescribed

With the above advantages and disadvantages, it shows that the advantages of business households are the disadvantages of enterprises. Currently, there are still two business models in parallel, according to our assessment from recent years, the Prime Minister always encourages small business households to increase their level to Enterprise strong enough to reach high enough to reach out to "big sea" to be competitive enough, to grow stronger and to be able to assert its position in the marketplace.

In addition, some business households who want to move to a business will enjoy many incentives from the government such as:

- Exemption of business registration fee and enterprise information provision fee for the first time;

- Free evaluation, fees and charges for the first business license for conditional business lines;

- License fee exemption for a period of 03 years from the date of issuance of the first business registration certificate.

- Exemption or reduction of land use levy for a definite term in accordance with the land law.

Advantages and disadvantages of business households and enterprises

If you need more advice about the benefits of switching from business households to businesses or the order and procedures for setting up a business, Do not hesitate to contact Hotline: 0975480868 - zalo for free advice.

5 BENEFITS FROM CONVERTING FROM BUSINESS HOUSEHOLD TO ENTERPRISE

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