IE and LLC for one person, can this happen? Can a founder (not a director) be an employee of the company?

A participant in a limited liability company, sometimes called a founder (and sometimes erroneously), is, according to Article 7 of the Federal Law “On LLC,” an individual or legal entity participating in the LLC. This can be a citizen of the Russian Federation, a foreign citizen, and, if we are talking about a legal entity, it can also be a resident or non-resident of the Russian Federation.

The concept and characteristics of a founder, who can become a founder

The founder of an LLC is the one who establishes it. Essentially, it looks like this: a group of people gathers, decides to create a company, approves the charter of this company, enters into an agreement on establishment, where they describe how it will be managed, as well as who, how much, and when invests in the authorized capital , and ultimately carry all the documents for state registration. The sole founder does all this alone, and does not enter into an agreement with anyone, he simply makes a decision.

The founder may be another legal entity. face, and even the Russian Federation represented by the Federal Property Management Agency. And if everything is clear with the Russian Federation, then for individuals. persons and legal entities persons have a number of criteria according to which they can act as founders:

The difference between a participant and a founder

What is participation in an LLC and how does it differ from a foundation? The founder, as mentioned above, establishes, that is, and after that becomes a participant. Or another person invests in this LLC, or more precisely in its authorized capital, money or property, and also becomes a participant, but at the same time it is incorrect to call him a founder - he did not establish this company.

However, for example, in non-profit organizations there are no participants, there are only founders.

How to become a founder of an LLC

To become a founder of an LLC, you must meet the above criteria. Everything else is simple. A decision is made to establish, the charter is approved, payment is made, and an application is drawn up in form P11001. All this is submitted to the registration authority (Federal Tax Inspectorate), and after state registration you become a participant in the LLC, while being its founder (since you created it).

Number of founders in the company

There can be no more than 50 founders in an LLC. If there are more, it must be transformed into a production cooperative or a joint-stock company. Or, if this is not done, liquidate.

Rights and obligations of the founder

The rights and obligations of LLC participants are specified in Article 8 of the Federal Law “On LLC”. In particular, these are:

• participation in managing the affairs of the society;
• obtaining information about the activities of the company and familiarization with its documents;
• taking part in the distribution of profits;
• the right to withdraw from the LLC, if it is in the charter;
• receiving part of the property in the event of liquidation of the LLC.

The articles of association may provide for additional rights.

Establishment agreement

The establishment agreement governs. It is concluded between the founders when their number exceeds one. The form is simple written. According to Part 5 of Art. 11 Federal Law “On LLC”, the agreement on establishment determines:

“the procedure for their joint activities to establish a company, the size of the authorized capital of the company, the size and nominal value of the share of each of the founders of the company, as well as the size, procedure and terms of payment for such shares in the authorized capital of the company.”

Founders meeting

The meeting of founders is held at any address. Before the meeting, it is necessary to record the attendance and credentials of each of them (usually this is done by one of them, or a specially invited person; sometimes a notary).

The founders' decision to create a company is recorded in the form of minutes of the meeting; all decisions must be made unanimously.

Founder's responsibility

According to Part 6 of Art. 11 Federal Law “On LLC”,

“The founders of the company bear joint liability for obligations related to the establishment of the company and arose before its state registration. The company is liable for the obligations of the founders of the company related to its establishment only if their actions are subsequently approved by the general meeting of the company's participants. In this case, the amount of liability of the company in any case cannot exceed one fifth of the paid-up authorized capital of the company.”

Management in LLC

The Civil Code of the Russian Federation directly provides for both the possibility of establishing an LLC by one founder, and the admissibility of the operation of an LLC, initially founded by several persons, later with one participant.

This can happen either as a result of the departure of the remaining founders from the LLC over time, or in the event of one person acquiring 100% of the shares of the LLC (Part 2 of Article 88 of the Civil Code of the Russian Federation). If in business practice the term “founder of an LLC” is usually used, the legislator prefers to use the term “member of an LLC”. From a legal point of view, these terms are almost identical: the founder is the participant who created the LLC. We will not take this minor difference into account below.

Management in an LLC can be:

1. Three-level, including:
   • general meeting of participants (GMS);
   • board of directors (BoD);
   • one or more executive management bodies.
2. Two-level, without the formation of diabetes. For an LLC with 1 participant, having a board of directors in the management system does not make practical sense; in this case, a two-level management system is used.

Executive power in an LLC can be organized in 3 ways:

1. Sole executive body. In practice, this body/position is most often referred to as “general director,” although other names are also found.
2. A sole executive body together with a collegial executive body (usually called “board” or “directorate”).
3. A management company is another legal entity that performs the functions of an executive body.

If there is a match founder and director of the LLC in one person Usually the 1st option for organizing the executive body is used.

The main management body of the LLC is the General Management Board; it makes decisions on the most important issues of the LLC’s functioning. The competence of the OSU is determined by Art. 33 of the Law “On Limited Liability Companies” dated February 8, 1998 No. 14-FZ (hereinafter referred to as Law No. 14-FZ). A number of issues fall within the exclusive competence of the OSU, i.e. their resolution cannot be transferred to another body of the LLC by the company’s charter. If there is only one participant in the LLC, then he makes decisions on behalf of the OSU individually. Such decisions must be made in writing. In this case, a number of provisions defined by Law No. 14-FZ in relation to OSU do not apply (Article 39 of Law No. 14-FZ).

Can a founder be a director of an LLC?

A direct and positive answer to this question is contained in Part 2 of Art. 88 Civil Code. Note that when the director and founder are one person, the management system in the LLC does not become single-level. Although all decisions at any levels of management in such an LLC are made by the same person, from a legal point of view this is a two-level management system. The issue of delimitation of competence is resolved as follows:

• the powers of the participant are determined by the charter of the LLC;
• all other issues are resolved by the General Director on a residual basis (if there is no board of directors in the management system).

For an LLC with one participant (aka director), the rules of Law No. 14-FZ on interested-party transactions and major transactions do not apply (part 1, paragraph 5, article 45 and part 1, paragraph 9, article 46 of the said law).

In an LLC with a single participant, there is no conflict of interest; it is easy to administer and, from a management point of view, resembles an individual entrepreneur. However, legally there are significant differences between an individual entrepreneur and such an LLC.

Founder and CEO rolled into one: employment contract

One of the main issues that arise in practical life is the issue of an employment contract (EA) with the director. The features of drawing up a TD in this case are discussed in the article “Employment contract with the general director of an LLC (sample).” Chapter 43 of the Labor Code of the Russian Federation (LC) is devoted to issues of employment contracts with the director (as well as members of the board). However, in the event of a coincidence between an LLC participant and its director, its regulation does not apply (Part 2, Article 273 of the Labor Code). At the same time, the director of the LLC is not included in the list of persons who are not subject to the regulation of the Labor Code and with whom an employment contract is not concluded (Part 8 of Article 11 of the Labor Code). There is some legal uncertainty.

An additional complexity is the following: if an LLC enters into a TD with the director, then who signs it on behalf of the employer?

It turns out to be a kind of legal paradox: the TD must be signed by the same individual both on behalf of the employee and on behalf of the employer. Note that in this case, an individual is in a different status: in one case, he acts on his own behalf (employee), and in the other, he is a representative of a legal entity. Note that the prohibition on concluding transactions for a representative in relation to himself as an individual is contained in clause 3 of Art. 182 of the Civil Code. But the regulation of the Civil Code does not apply to labor relations, and there are no such prohibitions in the Labor Code.

Law enforcement practice: TD with a director in an LLC with one participant (aka director)

As a result, different law enforcement officials expressed different views on this subject and formed different law enforcement practices in their activities. Let's consider the points of view expressed.

1. Rostrud, in letter No. 177-6-1 dated March 6, 2013, stated that an employment contract with the director in this case is not concluded.
2. On the website onlineinspektsiya.rf (information portal of Rostrud) on March 10, 2015, the answer was given that the TD (and no other agreement) in such a situation is not concluded, the director’s salary is not accrued, and contributions to the Pension Fund and Social Insurance Fund are not made. But on March 17, 2016, the opposite answer was given to the same question: the TD is concluded, the salary is accrued.
3. The Ministry of Health and Social Development believes that in this case, labor relations arise regardless of whether the TD is concluded or not (order No. 428n dated June 8, 2010). In this case, the director is subject to compulsory social insurance. Let us note that this department does not currently exist, and its legal successor, the Ministry of Labor, has not given an official explanation (there are only the above-mentioned consultations from Rostrud, a service subordinate to the Ministry of Labor and Social Protection).
4. The Ministry of Finance believes that in this situation the TD is not concluded (letters dated 02/19/2015 No. 03-11-06/2/7790, dated 10/17/2014 No. 03-11-11/52558). At the same time, accrued wages cannot be included in expenses that reduce the tax base. The first of these letters is applicable to organizations that are on the simplified taxation system (simplified taxation system), the second - for enterprises paying the Unified Taxation System (Unified Tax System) (agricultural tax).
5. The judicial authorities are of the opinion that in such a situation, labor relations arise (resolution of the FAS ZSO dated November 9, 2010 in case No. A45-6721/2010 and a number of other precedents). The important ruling of the Supreme Court of the Russian Federation dated February 28, 2014 No. 41-KG13-37 concluded that such labor relations are regulated by the general provisions of the Labor Code (remember that Chapter 43 of the Labor Code does not regulate them). This point of view is confirmed in paragraph 1 of the Supreme Arbitration Court Resolution No. 21 dated June 2, 2015). A number of court decisions concluded that labor decisions arise on the basis of the decision of a single participant, and registration of a TD is not required (Determination of the Supreme Arbitration Court of June 5, 2009 No. VAS-6362/09).

Founder and director are one person: risks

What should an entrepreneur do in such a situation? There is no clear answer. But we believe that the risk of adverse consequences is much higher in the absence of a TD with the director. Rostrud, which is a control body in the labor sphere and is authorized to conduct inspections and impose administrative penalties, as mentioned above, often changes its point of view on this issue.

The only founder is the general director in 2 companies

The legislation does not contain prohibitions on the sole LLC participant holding the position of director in 2 or more such LLCs. But only one AP in this case is the main one. In other LLCs, the director must draw up a TD on part-time work. All part-time contracts are subject to the rules of Chapter. 44 of the Labor Code, including the norm on the duration of the working day not exceeding 4 hours (Article 284 of the Labor Code) and the norm on the calculation of wages in proportion to the established working hours (Article 285 of the Labor Code).

IMPORTANT! The rule on the need for permission to work part-time from the higher management body of the LLC, contained in Art. 276 of the Labor Code does not apply to the founding director, since it is in Ch. 43 of the Labor Code, and this chapter does not apply to this situation.

Please note that a large number of simultaneously held director positions is a reason for inspection by the tax inspectorate. Thus, one of the criteria for the possible unreliability of information included in the Unified State Register of Legal Entities is the combination of more than 5 such positions in different organizations by an individual holding a director position (letter of the Federal Tax Service dated August 3, 2016 No. GD-4-14/14126@).

An LLC with one participant (aka director) is a very common and convenient practical instrument of entrepreneurship in business life. To avoid problems with government regulatory authorities, we recommend (for now) concluding an employment contract with the director of such an LLC. Before creating a TD with the director, you need to formalize a written decision of the sole participant of the LLC on his appointment.

“The 15 most popular questions about individual entrepreneurs and LLCs on the Russian Internet (with answers)” and dozens of questions on VKontakte, I realized that I had to continue. There are no clear and reasoned answers on the Internet, so we are correcting this gap.

To bookmarks

Review of questions from the owner of the “Director” company and the author of the book “Save Your Business”

1. How can a founder withdraw profits from an LLC?

First, profit must be determined using accounting data.

Profits should be distributed no more than once a quarter.

The distribution of profits is decided by the general meeting of founders - and no later than 60 days the money must be received.

What's important to keep in mind

When the founder of an LLC wants to take part of the profit for himself, he can take it exclusively in the form of dividends (or as a salary, but this is stupid, why is indicated in my previous one about individual entrepreneurs and LLCs).

Dividends are the income of the LLC founder from the company’s net profit. Dividends are subject to personal income tax at 13%. (See Article 43 and Articles 208, 224 of the Tax Code of the Russian Federation.)

If you need money more often than once a quarter, you can appoint yourself as someone, a driver for example, and take part of the money you need for living from the company as a salary, but this is not very reasonable, since you will have to pay 13% of personal income tax on the salary, another 30%. - insurance contributions to funds (Pension Fund, Social Insurance Fund, Mandatory Medical Insurance Fund). The total is 43% taxes.

As an option, you can borrow money from the company, and after distributing the profits, offset the claims. But you will still have to pay dividends.

2. How can the founder withdraw money from the LLC’s current account?

According to the law, no way.

Because the founder cannot manage current money.

This is the idea and design of an LLC.

After contributing his property, the founder loses rights to it, since for it he receives a share in the LLC.

Accordingly, the founder can either take profits in the manner described in the first question, or leave the company and take money for the share.

He has no right to interfere with operational activities, take money from the cash register, take home goods from a store window, etc.

The founders can change directors or become directors themselves; there are no other legal ways to interfere in operational activities.

Disposal of money is formally the sole authority of the director, which directly follows from paragraph three of Article 40 of the Federal Law “On LLC”.

It is clear that the founder has power and can informally have his own corporate card (for example, by taking it from the director after opening a current account), from which he will directly withdraw the company’s money just like that.

However, if he is not the only founder, then this is already theft of the property of the LLC, and other founders can bring him to justice, even criminally.

3. How can the founder deposit money into the LLC’s current account?

This question is asked on the Internet in order to understand how to contribute authorized capital or how to inject additional working capital for activities.

If you want to replenish working capital

Just deposit the money as an interest-free loan from the founder.

Money must either be transferred from a personal bank account to a current account or deposited into the cash register of an LLC, receive a cash receipt order, and then the director will deposit it into the current account. But the operation will be carried out on the “approach” precisely as a loan from the founder.

If you want to contribute to the authorized capital

According to the form, money must either be transferred from a personal bank account to a current account, or deposited into the cash register of the LLC, receive a cash receipt order, and then the director will deposit it into the current account. But the operation will be carried out on a “prihodnik” basis, namely as a contribution to the authorized capital.

But it’s better to do without money; if the authorized capital is no more than 20 thousand rubles, then the contribution can be made with any property that you can value at your own discretion and immediately upon registration - for example, a table and a chair.

Why is it necessary to state that this is authorized capital or a loan? Because otherwise this money will be regarded as sales revenue, and you will have to pay taxes on it.

4. Can the founder sign documents for the CEO?

This question arises due to a total misunderstanding of the LLC design.

Clause three of Article 40 of the Federal Law “On LLC” directly states that only the director has authority for all transactions. Accordingly, only the director can sign all transactions.

Transactions signed by the founder will simply be invalid, although the founder seems to be related to the LLC, he has no authority in this matter.

It’s the same as a father signing a purchase and sale agreement for the property of his adult son. It seems like he’s not a stranger, but the action is illegal, and it’s a no-brainer.

However, the law allows the director to issue powers of attorney. Now, if the founder has a power of attorney from the director to sign documents, then everything will be legal.

5. How can a founder leave an LLC without the consent of other founders?

If exit is not prohibited by the charter, then everything is very simple.

It is necessary to prepare an application in free form, have it certified by a notary (if anything happens, the notary will correct the application for you) and send it to the company. This is all the founder needs to do.

For more details, see paragraph 6.1 of Article 23, Article 26 of the Federal Law “On LLC”.

If exit is prohibited by the charter, it’s still not scary. This means that you cannot get rid of the share through the exit. But the share can be sold, pledged, and so on.

6. How can a founder pay taxes for an LLC in 2018?

I don't know why this question even came up.

Taxes are paid by the director.

7. How can a founder assign the duties of a chief accountant to a director?

According to the law on accounting (part one of the seventh article of the Federal Law “On Accounting”), maintaining accounting records is the responsibility of the director.

Therefore, either he himself becomes an accountant, about which he issues an order, or he hires an accountant, or he outsources his accounting to an accounting firm.

8. How can the director of an LLC resign of his own free will?

Like all people, write a statement and that’s it.

The question probably arose because the director seems to be writing a statement to himself. In this case, I recommend sending the application to the legal address of the company and, if possible, to the founders.

At least if they don’t update the data in the Unified State Register of Legal Entities, you will have confirmation that you quit.

9. How can the director of an LLC withdraw money from the current account for personal needs?

The question is not how to remove it, but how to account for it later.

It is not prohibited to withdraw money; only in this case the money can be spent either on current activities and classified as company expenses, or as salary.

Accordingly, if there are no documents about where this money was spent, it cannot be attributed to the company’s expenses. And there are only two scenarios.

1. In tax regimes where expenses are important (OSN, simplified tax system with the object “income minus expenses”), withdrawn amounts spent on yourself will simply not be allowed to be attributed to expenses, which means you will pay VAT and income tax on them.
2. In tax regimes where expenses are not important (STS with the object “income” and UTII), the director’s money will be taxed as his income in the form of salary, that is, they will be charged an additional 13% of personal income tax and 30% insurance premiums.

You can purchase something, for example a car, for a company. Formally, the car will be owned by the LLC, but you can use it and you won’t have to overpay taxes.

10. Can the director of an LLC work without a salary?

There is no such formal ban.

However, in Russia, the tax inspectorate has repeatedly forced people in such a situation to pay at least some salary, at least within the minimum wage.

So decide for yourself.

Another big mess in this issue is the parallel regulation of labor relations with the director. On the one hand, the Labor Code says that the director is still such from the moment the employment contract is concluded.

On the other hand, the registration procedure in an LLC, in which the decision of the sole founder or the minutes of the general meeting of founders on the appointment of a director and the entry of data into the Unified State Register of Legal Entities automatically means that the person performs the duties of a director, even if there is no employment contract with him.

11. Can the director of an LLC also be an individual entrepreneur?

Yes, sure. There are no restrictions established by law. I am an individual entrepreneur myself, as well as a director and founder of an LLC. They didn't do anything to me.

12. Can the director of an LLC work part-time?

Yes, sure. There are no restrictions established by law.

If you are a budding entrepreneur, you can find a lot more useful information in my book “Save Your Business”.

Any employee, including the general director, can act as an accountable person in the company, even if he is the only founder. The main thing is to correctly formalize the issue and require him to provide an advance report and supporting documents. In the article we will consider whether the founder can be an accountable person and the procedure for issuing funds to him.

Can a founder be an accountable person?

The director of the organization, even if he is the only founder, is an employee of the company, which means that for cash transactions he is also obliged to report to the organization by providing an advance report.

Application for the issuance of accountable funds to the founder

If the manager needs to receive money on account, then it is necessary to obtain a statement from him for each amount received. The wording in the CEO's statement will be the same as in the statement of an ordinary employee. The only difference is that this document does not need to be visaed. The director writes the application addressed to the cashier or other person responsible for cash transactions. If accountable funds are transferred to an employee’s card, he will need to indicate the card details in the application. If an organization has developed an application template, then such a field should be provided for details.

Thus, the application must indicate:

• the amount of money requested by the employee;
• the period of time for which the money is issued;
• date and signature of the manager.

Important! You can issue an amount of any amount and for any period of time, if approved by the manager.

For the convenience of all employees in the company, it is better to develop an application form for the issuance of accountable funds. Then, when receiving funds, employees will quickly fill it out, even if funds are transferred to the card. Here's an example of such a statement:

Your organization can use this form or develop your own. Such a statement is drawn up for any issuance of accountable funds to employees, including the manager. There are no exceptions for this. But for the manager, you can provide slightly different wording, for example, “It is necessary to issue cash on account ...”, and not “Please issue.” This formulation would be more correct, since the manager himself cannot ask for money. In addition, the application should provide only one place for signature - for the director. Such a signature will also be an authorization signature.

For bank details, space should be provided for the name of the bank, BIC, correspondent account, INN/KPP, and personal account number. In this case, the employee will need to attach documents to the advance report that will confirm that the payment was made with this card.

It would also be useful to include in the application a field containing information about the absence of debt from the employee for previously issued sums of money. That is, funds can be issued only if the employee has already reported on previous amounts. Otherwise, the money cannot be transferred. If a company ignores this requirement, then it faces a fine based on Article 15.1 of the Code of Administrative Offenses of the Russian Federation in the amount of 40,000 to 50,000 rubles, and an entrepreneur - 4,000 to 5,000 rubles.

Deadline for reporting imprest amounts

Employees are required to report on accountable funds no later than 3 days from the date of expiration on which the money was issued. Or within three days from the moment the employee returns from a business trip, if accountable money was issued for it. In this case, working days are taken into account. Let's assume that an employee returned from a business trip on Friday. This means that the deadline for providing them with an expense report is Wednesday, not Monday.

The accountable person is obliged to draw up an advance report and submit it to the accounting department. The report is accompanied by documents that confirm the expenditure of money. These can be checks, invoices, acts and other documents. Without such documents, the advance report cannot be approved, otherwise the report will be considered the employee’s income.

It is also important to monitor the deadlines within which employees report on funds received. If they do this at the wrong time, the funds issued will be considered a debt and will need to be withheld from the salary. If the debt is not collected, it will be considered the employee’s income, which means insurance premiums will need to be charged on it. However, if after this the employee still provides supporting documents, then the insurance premiums will need to be recalculated again.

Of course, such a procedure will be quite troublesome, so reporting deadlines should be monitored and if they run out, then a report and supporting documents should be required from the employee.

The Ministry of Finance imposes additional requirements for accountable funds transferred to an employee’s card. The conditions that funds can be transferred to the card must be specified in the company’s accounting policies for accounting purposes. Although the legislation does not directly provide for such a requirement, there are no consequences for non-compliance. However, in order to avoid additional questions from the inspection authorities, it would be best to provide for such conditions in the accounting policy. Moreover, even if money on account is issued only in cash, it is better to state in the accounting policy that it can be transferred to a card. This will not oblige the company to anything, and if necessary, it will not need to make changes to its accounting policies.

Conclusion

Answers to common questions

Question: The head of our company is an accountable person. Should he provide an advance report, within what period and can he change this period? After all, in essence, he reports to himself.

Answer: Like any other employee, the director, even as a founder, is obliged to report on the accountable funds received. That is, he must submit an advance report within 3 days from the end of the period for which this money was issued. The manager does not have the right to increase the deadline for the report. He can only set a longer period for which funds are issued to him. He will need to specify this period in the application and order.

Question: Our company issues small amounts for reporting, usually they do not exceed 15 thousand rubles. But the director plans to buy goods for a large sum of more than 100 thousand rubles for cash. Can we give him that amount of money as accountable?

Answer: You can, and this does not depend on whether the accountable person is a director or not. The manager determines the amounts that can be issued on account independently; this must be indicated in the application for the issuance of money and in the order for the issuance. In addition, an individual has the right to pay cash to another company in an amount exceeding 100 thousand rubles. Therefore, there are no obstacles to this.

The simplest form of a company is the so-called “one person company”, when founder and director perform in one person. In this case, an organization, such as an LLC, is created and managed by the same individual. At the same time, despite the simplicity of creating and managing such a company, from a legal point of view the situation is by no means simple, and requires proper registration of the relations arising here.

First of all, the question arises about the mandatory registration of labor relations with the director

(the position of the head of the company may be called differently, for example, general director, president, etc.) “company of one person,” and if so, how to formalize these relationships correctly.

Founder and director rolled into one.

At one time, in a letter from the Ministry of Health and Social Development of Russia dated August 18, 2009 No. 22-2-3199, it was explained that the management activities of the head of the organization in this case are carried out without concluding any agreement (labor contractor a civil law agreement). This was justified by the fact that an agreement cannot be concluded with oneself, and in the case where the founder and director are the same person, this is exactly what happens.

At the same time, judicial practice has taken the path of recognizing the legality of concluding such employment contracts. After which the approach of officials changed. The order of the Ministry of Health and Social Development of Russia dated 06/08/2010 No. 428 provided clarifications regarding compulsory social insurance in case of temporary disability and in connection with maternity. As the Ministry of Health and Social Development explained, the head of an organization, when he is its sole founder (participant), is classified as a person working under an employment contract and is subject to compulsory social insurance.

Thus, in order to avoid disputes with regulatory authorities, it is advisable for the founder of an LLC or another company of one person, who is also its director, to draw up an employment contract with himself (it will be signed, on the one hand, by the sole founder, and, on the other hand, by the employee, that is, the head of the organization), which reflects all the conditions mandatory for such contracts, including the procedure and amount of wages. It will also be necessary to fulfill other requirements stipulated by labor legislation: make an entry in the work book, issue a personal card for the employee, etc. That is, in this case, the director has the status of an employee and the organization (employer) must fulfill all the requirements stipulated by law in relation to him.

It should also be taken into account that salary payments must be made in favor of the director, and income tax must be withheld from the amounts of these payments. In addition, contributions to extra-budgetary funds should be made. Failure to comply with these duties may result in prosecution.

FAQ (frequently asked question – Frequently asked question: Can the head of a “one person company” work for free? Having said that, no. Since the manager is an employee from the point of view of labor legislation, he must receive a salary for the work performed. Non-payment of wages to an employee can only occur in cases provided for by law, for example, when the employee is granted leave without pay.

Taxes must be paid on the income received by the organization. Personal income tax and insurance contributions to extra-budgetary funds must also be withheld from the income received by the director of the company. At the same time, it may be beneficial for the founder and director of a “one-person company” to calculate and pay salaries to himself. The fact is that amounts paid to the manager, provided they are justified and have proper documentary evidence, can be taken into account as part of the organization’s expenses when paying income tax. At the same time, the organization must withhold personal income tax in the amount of 13% from payments to its employee, and the tax rate when paying corporate income tax is, as a general rule, 20%. However, disputes with tax authorities are possible.

So, as you can see, the situation when the director and the founder are the same person can cause some difficulties, which, however, can be overcome if everything is done correctly.

At the same time, in a company of one person you can do without paying a salary. How? See below.