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LEGAL REQUERIMENTS FOR ENTREPRENEURS - Coggle Diagram
LEGAL REQUERIMENTS FOR ENTREPRENEURS
TAXES AND YOUR BUSINESS
Tax evasion: Trying to avoid paying taxes through ilegal.
Tax: Amount of money required by goverments to support public functions.
Tax payment (RIMPE) Negocios y Emprendedores
Annual payment
VAT (IVA) tax applied if generates over USD 20.000 anually
Time validity: Generates USD 20.000 or more
Invoices and Sales slips
VAT (IVA) return every 6 months
Time validity: During 3 years
Responsabilities to your employees
Instituto Ecuatoriano de Seguridad Social (IEES)
Job benefits: Employees must perceive a salary and bnefits (decimo tercer y cuarto sueldo)
Company profits: Utilidades
KEY WORDS
Limited Liability: A business owner cannot legally forced to use personal money and possessions to pay business debt.
Unlimited Liability: A business owner can be legally forced to use personal money and possessions to pay the debts.
RUC: National Identification Number (Cédula de Identidad) + 001
BUSINESS OWNERSHIP
Sole Proprietorship
How to set up a Sole proprietorship in Ecuador
Servicio de Rentas Internas (SRI) Entrepreneurs must obtain the Registro Único de contribuyentes.
(RUC) Tax identification number.
Advantages
Is the simplest and least expensive option for business ownership.
Business income and costs are reported on the owner´s personal income tax return
The sole proprietor is also the sole decision maker.
Disadvantages:
Only one individual is responsible for the bussiness.
The sole proprietor has unlimited liabilty for any bussiness debts.
Sole proprietors often find is difficult to borrow money.
Sole propriertors often find it difficult to expand their businesses.
Partenership/Companies
To legally operate business in Ecuador entrepreneurs
Legal structure constitution.
Choose company´s name.
Business Bank account opening.
Business documents authorization.
Tax Authority Registration.
Legal constitution of the company.