Kfh without forming a legal entity. Can an individual be the head of a peasant farm and what is needed for this The head of a peasant farm can be
Question 15. Civil law status of a general partnership and limited partnership. Peasant (farm) economy as a legal entity.
Clause 1 of Article 68 of the Civil Code of the Russian Federation defines a business partnership (hereinafter - CH) Business partnerships are recognized as commercial organizations with shared capital divided into shares of participants. The property created at the expense of contributions of participants, as well as produced and acquired by a business partnership in the course of its activity, belongs to it by the right of ownership.
The legal status of economic partnerships, the rights and obligations of its participants are determined by the Civil Code of the Russian Federation. There is currently no special law regulating the activities of HT.
There are two forms of HT:
1. Full partnership (association of persons)
2. partnership in faith (limited partnerships - association of capitals) item 3. Art. 66 of the Civil Code of the Russian Federation
Individual entrepreneurs and (or) commercial organizations can be participants in general partnerships and general partners in limited partnerships, while citizens and legal entities can be investors in limited partnerships (clause 4, article 66 of the Civil Code of the Russian Federation).
Business partnerships may be (participants in) other business partnerships and companies, with the exception of cases provided for by the Civil Code of the Russian Federation and other laws.
A contribution to the property of a business partnership may be money, securities, other things or property rights or other rights having a monetary value.
General partnership . Such a business partnership is recognized as full, the participants of which, firstly, carry out entrepreneurial activities on behalf of the partnership and, secondly, are subsidiarily liable for its obligations with all their property (paragraph 1 of article 69 of the Civil Code). If a participant in a general partnership does not have personal property, in connection with which creditors, in order to cover his personal debts, foreclose on his share in the joint capital of the partnership, his participation in the general partnership is terminated (Article 80 of the Civil Code). Despite the existence of individual property liability of participants for the debts of such an association, in Russian civil law it has traditionally been recognized as a legal entity. In this capacity, it is fundamentally different from a simple partnership, which is an agreement on joint activities (Article 1041 of the Civil Code).
The liability of full partners for the debts of the partnership with personal property makes it superfluous to present any special requirements for the joint capital of the partnership, because the property of each of the comrades becomes the most important guarantee for the repayment of possible debts. Therefore, the law does not require a partnership to have a mandatory minimum of property, although it must have and in fact always has a certain share capital. In addition, the liability of general partners explains the indication in the company name of a full partnership of the names (or company names) of its participants (clause 3, article 69 of the Civil Code).
A general partnership is created on the basis of a constituent agreement, which must be signed by all its participants (thus expressing their will to create a partnership and to participate in it). From the moment of state registration of this agreement, the partnership arises as a legal entity.
The conduct of affairs of a full partnership can be carried out both in the traditional way - by each of its participants, and by their will, directly expressed in the memorandum of association, by all participants jointly (i.e., by their mandatory consent to the conclusion of each transaction of the partnership) or by one or more individual, most experienced participants (clause 1 of article 72 of the Civil Code). In the latter case, the remaining participants in the partnership, if it is necessary to conclude transactions on its behalf, must obtain a power of attorney from such partners responsible for conducting common affairs. At the same time, the counterparties of the partnership are not required to know about possible restrictions on the powers of individual participants in the partnership. When concluding a deal, it is enough for them to make sure that they are dealing with one of the general partners, assuming that he has the right to act on behalf of the partnership. Therefore, transactions entered into on behalf of the partnership by any of its participants will be valid unless the partnership itself can prove that the counterparty to the transaction knew or should have known about the lack of authority of a particular participant.
A change in the composition of participants entails the termination of the partnership (part 2 of article 81 of the Civil Code). However, this may not happen if the constituent agreement or agreement of the remaining participants in the partnership provides for the continuation of its activities in this situation as well (clause 1, article 76 of the Civil Code).
Faith partnership is such an association of persons in which some participants carry out entrepreneurial activities on behalf of the partnership and at the same time are jointly and severally liable with their personal property for its debts, i.e. are full partners (and constitute a full partnership within a limited partnership), while others only make contributions to the property of the partnership without directly participating in its business activities, and bear only the risk of their loss (contributors, limited partners) (paragraph 1 of article 82 of the Civil Code). Two categories of participants: general partners and contributors (limited partners). The inclusion of the name (name) of the investor in the company name of the limited partner automatically leads to his transformation into a general partner and, consequently, to his unlimited joint and several liability for the debts of the partnership (clause 4 of article 82 of the Civil Code). After all, the indication of the name of the participant in the company name of the partnership always serves as an important guide for potential creditors.
For the same reasons as in a full partnership, the only founding document of a limited partnership is the founding agreement signed by all full partners, and only by them (clause 1, article 83 of the Civil Code).
Peasant (farm) economy. KFH can be formed both without a legal entity and be a legal entity. In agriculture, entrepreneurial activity without formation of a legal entity can be carried out in the form of conducting a peasant (farm) economy. If able-bodied members of his family, other relatives and other persons participate in the activities of the farm, they are not entrepreneurs. Only the head of the peasant (farm) economy acts as an entrepreneur (clause 2, article 23 of the Civil Code). Art. 257 of the Civil Code establishes the regime of common joint ownership of a peasant (farm) economy, unless otherwise provided by law or an agreement between members of the economy.
Citizens conducting joint activities in the field of agriculture without forming a legal entity on the basis of an agreement on the establishment of a peasant (farm) economy (Article 23), has the right to create a legal entity - a peasant (farm) economy(art. 86.1).
Farming is considered created from the date of its state registration.
Peasant (farm) economy as a legal entity is based on membership relations (unification of contributions of members of the peasant farm). KFH members are both relatives of each of the spouses (family members), the number of which is not limited, and non-relatives, the number of which should not exceed 5 people. A citizen can be a member of only one peasant (farm) economy established as a legal entity.
The property of a peasant (farm) economy, formed by the contributions of its members, belongs to it by the right of ownership.
When foreclosing creditors of a peasant (individual) farm on a land plot owned by the farm, the land plot is subject to sale at public auction in favor of a person who, in accordance with the law, has the right to continue using the land plot for its intended purpose.
Members of a peasant (individual) farm established as a legal entity shall bear subsidiary liability for the obligations of the peasant (individual) enterprise.
Farm enterprises may, under an agreement among themselves, create associations in the form of associations or unions of farm enterprises on territorial and sectoral grounds, and may also be founders, participants, members of commercial and non-commercial organizations.
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People who are engaged in agricultural activities, sooner or later begin to wonder how to further develop their business, while formalizing it in accordance with the law. Often the most popular are two forms - IP and KFH. Few can boast of knowing how one concept differs from another. However, when choosing and applying for a status, it is necessary to understand the intricacies and find out which is better - an individual entrepreneur or a peasant farm.
IP - individual entrepreneur - an individual who is granted the right to carry out commercial activities.
IP benefits
The advantages of the form of individual entrepreneurship include the following points:
- a simpler registration and termination system;
- accounting and reporting is not mandatory;
- some administrative fines are much lower;
- registration does not require a legal address;
- registration costs are minimal;
- profit is the property of the entrepreneur;
- a wide range of taxation systems.
IP Disadvantages
Now let's look at the cons:
- answer for obligations with all belonging property;
- the need to pay insurance premiums even in the absence of activity;
- some activities for individual entrepreneurs are prohibited;
- restrictions in terms of attracting funding;
- inability to sell the business.
What is KFH
KFH - a peasant (farm) economy - is a group of persons who have a family relationship with each other. This gives them the opportunity to jointly implement agricultural activities. The founder of the KFH is considered to be one individual, the rest are in a contractual relationship, but they all have equal rights.
Advantages of KFH
Among the strengths of this form of business organization:
- the availability of benefits for registration and taxation;
- availability of government business support programs;
- a wide range of activities: gardening, floriculture, viticulture, animal husbandry, poultry farming, beekeeping and others;
- good option for a family business.
Disadvantages of KFH
Vulnerabilities include:
- significant costs of setting up a business (land and special equipment);
- the inability to postpone the performance of their duties for some time;
- the likelihood that the business will not immediately bring income;
- it is not always possible to sell products at a bargain price;
- business success also depends on natural factors.
Features of IP registration
IP registration takes place at the place of residence of an individual. An alternative option is registration with the tax service, taking into account temporary registration. If approved, all data is entered into the general register of individual entrepreneurs.
Here are the steps a future entrepreneur goes through to register his business:
- Preparation of the necessary set of information (type of activity and OKVED code) and documents (copy of the passport, application for registration as an individual entrepreneur, receipt confirming the payment of the state duty).
- Submission of papers to the registration authority.
- In case of success - receipt of the USRIP record sheet.
- Registration of individual entrepreneurs in state funds of extra-budgetary type.
- Obtaining state statistics codes.
- Making a seal (if necessary).
Required documents
You will need to submit to the tax office:
- application for state registration of an individual as an individual entrepreneur;
- receipt of payment of state duty;
- application for the transition to a simplified taxation system;
- a copy of the passport.
Peculiarities of registration of KFH
Registration of a peasant (farm) economy takes place in the tax authorities at the place of residence. Usually activities are organized there.
An adult capable citizen who does not have citizenship or whose citizenship is not Russian can also register a KFH.
The activities of the KFH should not be tied to a specific place. Therefore, there are many ideas regarding business options.
Required documents for registration of KFH
The list of documents includes:
- application for registration;
- an agreement on the creation of a peasant farm (needed only if the number of participants in the farm is more than one person);
- receipt of payment of state duty;
- application for transition to a special tax regime;
- a copy of the passport of the head of the economy;
- copies of documents that confirm the existence of family ties between members of the economy;
- list of selected OKVED codes.
Number of members and related rules
Members of the KFH can be spouses, children, brothers or sisters, fathers and mothers, and even more distant relatives who have reached the age of sixteen; the number of related members of the household is not limited by law. But: in one economy there can be no more than three families.
Even those people with whom its members do not have family ties can be accepted into the KFH, but there should be no more than five of them.
Who can create a KFH
It is possible to create a peasant farm with parallel assignment of the status of a legal entity or without it (at the moment, only in this way), as an individual entrepreneur or private household plot.
Legal entity KFH
The new edition of the Federal Law "On KFH" dated June 11, 2003 N 74-F3 does not provide for the possibility of registering a farm with the status of a legal entity. However, the peasant economy, which acquired legal status in accordance with a similar law of 1990, retains it until January 1, 2021.
Registration of a peasant farm without creating a legal entity takes place at the tax office at the place of registration (including temporary) of its head. With this registration, the same rules apply as with a similar procedure for individual entrepreneurs. Registration must be completed no more than five working days in advance.
IP - head of the KFH
In accordance with Art. 23 of the Civil Code of the Russian Federation, the head of a peasant farm may be called an individual entrepreneur. In this case, he acts as both an entrepreneur and a representative of the economy, who acts on behalf of all its members. This obliges him to submit documentation to the control authorities for both statuses.
It is noteworthy that some sources deny the possibility of registering a peasant farm with the current status of an individual entrepreneur. But you need to rely solely on the law, which is often updated, and this must also be taken into account.
LPH or KFH
LPH - personal subsidiary plot; this is a form of non-entrepreneurial economic activity that anyone can carry out if he has a personal plot. PSP does not require registration at the state level, does not provide for membership, is exempt from paying taxes and keeping records.
Citizens can start working in this status immediately after registering the rights to a land plot, which is provided for private household plots. It should be noted that this form is designed to meet the personal needs of those who run the household. That is, it is not aimed at making a profit. 
Hence the many disadvantages of LPH. For example, the presence of restrictions on the allowable area of land, which is provided for use. In addition, a lot of borrowed money will not be given for the development of this business, and it is impossible to issue declarations or certificates of conformity for it, which significantly limits the circle of potential buyers. This is due to the fact that private household plots are run not by a farmer-entrepreneur, but by an individual - independently or together with family members - and produce products not for sale, but for their own consumption.
KFH is the choice of the farmer who plans to develop his business. The head of the KFH IP has significant advantages over private household plots:
- more than 2.5 hectares of land for legal use;
- obtaining state support in large volumes;
- the possibility of official cooperation in the sale of products with many categories of buyers;
- obtaining large amounts of borrowed funds from banks;
- the ability to create new jobs and attract workers legally;
- availability of tax benefits.
The choice between private household plots and peasant farms is based on determining the purpose of creating a farm.
Accounting KFH
KFH, like other types of economic activity, requires accounting. This should be done in such a way that the regulatory authorities are provided with the necessary information regarding the property status, expenses, incomes and financial results of farmers. However, in this case, the situation becomes more complicated due to the uncertainty of the legal status of the economy. Therefore, the organization of accounting in a peasant farm is associated with its organizational form, as well as the management structure and the size of production. This point needs to be clarified.
To ensure accurate accounting in a peasant farm, you can attract a specialist accountant who can act as a chief accountant, freelancer, full-fledged employee of the farm.
All reports can also be made by the head of the KFH.
As a rule, it is said that the head of the peasant farm needs to keep records of materials and goods in accordance with the type of organization of agriculture, animals and poultry, the costs of maintaining and operating equipment, repairs and maintenance, rent, expenses and income, etc. It is also necessary to generate standard accounting reports for the sale of products.
Tax incentives for peasant farms
Tax benefits for representatives of peasant farms are indicated in Part 14 of Art. 217 of the Tax Code of the Russian Federation. According to this law, personal income tax does not apply to:
- income of members of the peasant farm, received from the sale of manufactured products, during the first five years;
- amounts that were received as grants for the creation or development of peasant farms;
- subsidies that were provided to the heads of peasant farms from the country's budget system.
State support for peasant farms
The state provides support in the creation and development of a credit system for agricultural producers, provides equal rights in access to obtaining loans for business development.
The state provides property support to peasant farms on the basis of a federal law regulating the development of small businesses: a farm can receive state or municipal property for use in the form of land plots, buildings, buildings, non-residential premises, equipment, vehicles, special equipment, etc. Assistance can be provided on different conditions: free of charge, for a fee or as benefits.
Entrepreneurs with experience consider the following points important in creating their own agricultural business:
- It is better to purchase your own piece of land, even if it is far from home. This is an additional security measure.
- If the capital is small, then it is better to start with vegetable growing. In a few years, this area will bring tangible income.
- If you have a significant start-up capital, it is better to start a business with animal breeding. Pig farming is one of the most profitable options.
- It is necessary to use additional labor, as it is usually difficult to cope with the existing volume of work alone. Hired workers are a great option.
- It is necessary to sell the manufactured products correctly and in full: it is necessary to conclude contracts with wholesale buyers, markets and supermarkets.
Compare IP and KFH
To summarize all of the above and answer the main question stated in the topic, a table of differences will be useful: which is better, a peasant farm or an individual entrepreneur, can be decided by considering the characteristics compared in it.
Recently, there has been a tendency for entrepreneurs to register peasant farms instead of individual entrepreneurs. This is especially true for those areas in which the authorities are actively implementing measures to develop the agricultural sector. These are, for example, the Voronezh and Rostov regions.
Thus, the choice between a peasant farm and an individual entrepreneur lies directly with the one who plans to open his own business. And the future entrepreneur needs to proceed from his own tasks and goals.
Public services in detail - how to register an individual entrepreneur and a farm: Video
To Option 1.
Annex 2
Amendment No. 2 to the Civil Code of the Russian Federation
(New section: § 3.1. Peasant (farm) economy - a legal entity)
§ 3.1. Peasant (farm) economy - legal entity
Article 112.1. The concept of a peasant (farm) economy - a legal entity
1. Small family farming business, created by citizens on the basis of membership and consisting of members of the same family or close relatives (spouses, their parents, children, grandchildren, brothers, sisters, grandparents of each of the spouses - but not more than three families), carrying out joint economic activities for the production of agricultural products, their processing, storage, transportation and sale, on the basis of personal participation and the association of property contributions - the property of a peasant (farm) economy.
Peasant (farm) economy LE (abbr. KFH LE) is a commercial organization.
6. Admission of new members is carried out only by mutual agreement (unanimous decision) of all members of the given economy.
Article 112.4. Management in the peasant (farm) economy of a legal entity
1. The supreme body of the peasant (farm) economy of a legal entity is the general meeting of its members.
The sole executive body of the peasant (farm) economy of a legal entity is its head. He carries out the current management of the activity of this economy and is accountable to the general meeting of members.
2. The procedure for managing a peasant (farm) enterprise of a legal entity and the procedure for making decisions is determined by the law on a peasant (farm) enterprise and the charter of this enterprise.
3. The exclusive competence of the general meeting of members of the peasant (farm) economy of a legal entity includes:
1) changing the articles of association,
2) admission and exclusion, termination of powers of members,
3) adoption of a unanimous decision on the termination of the powers of the head of the peasant (farm) economy of the legal entity and on the recognition of another member of this economy as the new head in the manner prescribed by the law on the peasant (farm) economy;
4) approval of the annual reports and balance sheets of the farm and the distribution of its profits and losses;
5) a decision on the reorganization and liquidation of the peasant (farm) economy of the legal entity.
Article 112.5. Head of the peasant (farm) economy of the legal entity
1. By mutual agreement, one of its members is recognized as the head of a peasant (farm) economy of a legal entity. The head of a peasant (farmer) farm of a legal entity cannot be a person who is not a member of this farm.
2. The management and representative functions of the head of a peasant (farm) economy of a legal entity cannot be delegated to a third party that is not a member of this economy.
3. If the peasant (farm) economy of a legal entity is created by one citizen, he is the head of this economy.
4. The rights and obligations of the head of a peasant (farm) economy of a legal entity are determined by the law on a peasant (farm) economy and the charter of this economy.
Article 112.6. Property of a peasant (farm) economy of a legal entity, contributions to the property and authorized capital of a peasant (farm) economy of a legal entity
1. The property of a peasant (farm) enterprise of a legal entity, created at the expense of the contributions of its members, as well as produced and acquired by this enterprise in the course of its activity, belongs to the peasant (farm) enterprise of a legal entity on the basis of ownership.
2. A contribution to the property of a peasant (farm) economy of a legal entity may be: a land plot, utility, residential and other buildings, reclamation and other structures, productive and working livestock, poultry, agricultural and other machinery and equipment, vehicles, inventory, cash and other property necessary for the implementation of the activities of the economy, as well as the fruits, products and incomes received by this economy as a result of economic activities.
3. The authorized capital of a peasant (farm) economy is made up of the value of the contributions of its participants.
The authorized capital determines the minimum size of the property of the peasant (farm) economy of a legal entity that guarantees the interests of its creditors.
The minimum amount of the authorized capital of a peasant (farm) economy is established by the law on a peasant (farm) economy.
4. The authorized capital of a peasant (farm) economy of a legal entity must be at least half paid by its members at the time of registration of the economy. The remaining unpaid part of the authorized capital of the peasant (farm) economy of the legal entity is subject to payment by its members during the first year of the economy.
5. A decrease in the authorized capital of a peasant (farm) economy of a legal entity is allowed after notification of all its creditors.
6. An increase in the authorized capital of a peasant (farm) economy of a legal entity is allowed after all its participants have made contributions in full.
The procedure for the formation of the authorized capital of the peasant (farm) economy of a legal entity, the list of included objects is established by the members of this economy by mutual agreement.
Article 112.7. Reorganization and liquidation of the peasant (farm) economy of a legal entity
1. The peasant (farm) economy of a legal entity may be reorganized or liquidated voluntarily by a unanimous decision of its members.
Other grounds for the reorganization and liquidation of the peasant (farm) economy of a legal entity, as well as the procedure for its reorganization and liquidation are determined by this Code and other laws.
2. The peasant (farm) economy of a legal entity has the right to be transformed into a business company, partnership or production cooperative.
Article 112.8. Transfer of a share in the authorized capital of a peasant (farm) economy of a legal entity to another person
1. A member of a peasant (farm) economy of a legal entity has the right to sell, donate or otherwise assign his share in the authorized capital or part of it to one or more members of this economy.
2. Alienation by a member of a peasant (farm) economy of a legal entity of his share (its part) to third parties is not allowed.
3. A peasant (farm) enterprise of a legal entity is obliged to pay the heirs (successors) of its member the actual value of the share or to give them property in kind for the same value, in the manner and on the conditions provided for by the law on the peasant (farm) enterprise and the charter of this enterprise.
Article 112.9. Withdrawal of members of the peasant (farm) economy of the legal entity from the economy
1. Members of a peasant (farm) economy of a legal entity have the right to voluntarily withdraw from the economy.
2. The division of the property of a peasant (farm) economy of a legal entity and the issuance of a part of it in kind is allowed only on the condition that this does not destroy the integrity of the functioning production and economic complex of the economy.
3. The division of a land plot of a peasant (farmer) economy of a legal entity upon withdrawal of a member (members) from it is allowed subject to the requirements of paragraph 2 of this article and subject to the requirements established by the Land Code of the Russian Federation.
4. Members of a peasant (farm) farm of a legal entity, in the event of withdrawal, are entitled to receive monetary compensation commensurate with their share in the property (authorized capital) of the farm.
The terms and conditions for the payment of monetary compensation upon exit are established by the members of the peasant (farm) economy of the legal entity by mutual agreement.
5. The conditions for exit and payment to the exiting members of the value of their share in the authorized capital, as well as in the acquired and produced property of the peasant (farm) economy of the legal entity, are provided for by the charter of this economy.
Article 112.10. Responsibility of the peasant (farm) economy of a legal entity
1. The peasant (farm) economy of a legal entity shall be liable for its obligations with all its property.
Peasant (farming) economy of a legal entity is not liable for the obligations of its members.
2. Members of a peasant (farm) economy of a legal entity are not liable for its obligations and bear the risk of losses associated with the activities of their economy, within the value of their contributions.
Members of a peasant (farm) economy of a legal entity who have not made contributions in full shall be jointly and severally liable for the obligations of the economy within the value of the unpaid part of the contribution of each of the members.
The vast territory of Russia creates an unprecedented potential for agribusiness in other countries. Despite the fact that most of this territory is located in the zone of risky farming or is not at all suitable for growing crops, our country can be safely attributed to the leading agrarian powers. Our country has already achieved great success in providing the population with food. If in 1980 the compilers of the USSR Food Program had been told that Russia would become the world's largest grain exporter, they would have twirled a finger at their temples. And today it is a fact.
Agribusiness is one of those activities that are highly dependent on "force majeure circumstances". Natural disasters lead to crop failures, but conversely, excellent weather conditions and record harvests often cause prices to collapse. For these and a number of other reasons, a responsible state, in addition to supporting agricultural producers, should create various organizational forms of doing agribusiness.
In our country, in addition to forms of entrepreneurship common to all types of activities (joint stock companies, limited liability companies, individual entrepreneurship, and so on), agricultural producers can choose a specific form - a peasant farm (KFH). Not only many entrepreneurs, but also employees of government agencies often find it difficult to answer a simple question: “What is a peasant farm?”.
The difference between peasant farms and other methods of doing agribusiness
This article is devoted to the peculiarities of doing agribusiness using such a method of organizing it as a peasant farm. Peasant farming is a special form of agribusiness. Agricultural production and related activities must generate at least 70% of the gross income of the farm. The peculiarity of such an economy is that it is a family business. Members of the KFH are citizens who are related by family ties (spouses, brothers and sisters, parents, children, and so on).
The legal basis for the existence of a peasant farm is regulated by federal law No. 73-FZ and the Civil Code (Article 86.1, Chapter 4).
According to these documents, a peasant (farm) economy can function as a legal entity or without its formation. Some similarity of this form of doing business with an individual entrepreneur often raises the question: “Is a peasant farm a legal entity or an individual entrepreneur?”. The main, fundamental difference between a peasant farm and an individual entrepreneur is that if an individual entrepreneur is only one individual (he is also the founder), then several individuals can establish (establish) peasant farms. These individuals must meet the following criteria:
- be related to each other with the founder (kinship must be confirmed by relevant documents);
- be over 16 years of age;
- sign and strictly observe the agreement between the participants of the economy;
- directly participate in the activities of the economy.
An important addition is that household members must be members of no more than three families. As part of the KFH there may be persons who are not related, but in an amount of up to five people.
Consider the key differences between a peasant farm and an individual entrepreneur (peasant farm or individual entrepreneur, which is better table of differences).
It is important to understand the difference between a peasant farm and a personal subsidiary plot. Personal subsidiary farms include farms in which the owner owns a land plot of less than 25,000 m2. Citizens who run a personal subsidiary plot do not pay any taxes and contributions to social funds. Reporting in such farms is also absent. Since a personal subsidiary farm does not imply entrepreneurial activity, the sale of its products on the markets without certificates of conformity and other documents, as well as the hiring of labor, are actually illegal actions.
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A feature of the farm is the fact that the types of its activities cannot be interpreted broadly. The law provides for an exhaustive list of activities.
Formation of a peasant farm
Peasant (farm) enterprises began to be created in the late 1980s. At that time, the answer to the question of what is peasant farming in agriculture sounded very simple - a hybrid of a collective farm and an American (European) farmer. The public ownership of the means of production that existed then in the USSR led to a number of contradictions in the legislation on peasant farms. We will look at some of them in this section.
In general, the registration of a peasant farm differs little from the registration of an individual entrepreneur. But there is one significant difference. This difference lies in the presence of an agreement between the organizers (founders) of the KFH. This agreement is the most important legal document that regulates financial, property and legal relationships between members of the KFH. An impeccably drafted agreement is a guarantee of reducing conflict within the team and tension between the participants in the abolition / reorganization of the peasant farm.
The organization of a farm by citizens who are related does not mean the absence of personal problems between the participants. Rather the opposite. Everyone knows that the most acute conflicts just arise between close people. The agreement between the participants of the economy is aimed at preventing possible conflicts. It can be drawn up in any form, but at the same time include the following provisions:
- detailed information about all participants in the KFH, including documents confirming their relationship;
- information about the head of the farm, whose powers must be recognized in writing by all participants;
- scope of powers of the head of the economy;
- rights and obligations of members of the economy;
- information about the property of the peasant farm, the sources of its formation, the procedure for use;
- features of the admission of new members to the KFH and the withdrawal of participants from its composition;
- the procedure for amending the agreement between the participants of the peasant farm;
- features of the distribution of income and property of peasant farms.
Documents for registration of a peasant farm are submitted by its head. He also heads the economy and acts on its behalf. If a peasant farm is not registered as a legal entity, its head is practically an "autocrat".
The most important sections of the agreement are those that determine the procedure for the use of property and resources of the economy. Participants should clearly understand that when one of the participants leaves the KFH, he can only claim monetary compensation. Land, machinery, structures and other property remain in the economy. Only in some cases (with the consent of all participants) monetary compensation can be partially or completely replaced by natural.
Of course, the agreement between the participants of the KFH should not contradict the legislation of the Russian Federation. In the liquidation (disintegration) of a peasant economy, the provisions of the Civil Code of the Russian Federation have priority. The same rules apply to the division of property between spouses in the event of divorce and inheritance.
For registration of a peasant farm, the same documents are submitted as for registration of an individual entrepreneur with one addition. If a peasant farm is registered as a legal entity, then the application of an agreement between the members of the farm is mandatory. The OKVED code during registration is always selected from class 01.
For example, when raising dairy cattle with the subsequent sale of finished products, codes 01.41.1 - 01.41.29 are selected.
Head of a peasant farm
In the Law on Peasant Farms, such a concept as its head is separately recorded. Article 17 of the KFH Law defines the powers of the head of the KFH. These powers include the normal functions of a manager. The head of the KFH represents the economy in all bodies, concludes agreements with third parties on behalf of the KFH without a power of attorney, and so on. At first glance, these powers do not differ from the powers of an individual entrepreneur or director of an LLC. But it's not.
There are several forms of doing business, depending on the type and scale of commercial activity. When starting a business from scratch, many people prefer the design of an IP, as this is a fairly simple and quick procedure. But if a person decides to engage in agricultural activities, he can also register a farm. To understand what is better - an individual entrepreneur or a peasant farm, and choose the optimal form of doing business, you need to understand the intricacies of each of them.
KFH as a type of activity
Peasant farming (KFH) is represented by a group of people who are most often relatives, or for some other reason have joint property and are engaged in agriculture for profit. Members of the KFH are engaged in the production of products, their processing, storage, transportation and sale. A peasant farm can produce any product, but only if it is agricultural: poultry meat, livestock, vegetables, cereals.
If you are going to produce products of a different kind, such a form of business as KFH will not suit you.
What are the benefits
KFH has a number of advantages:
- support and privileges from the state;
- grace period in taxation;
- the possibility of using large land plots, the area of which exceeds 2.5 hectares;
- the possibility of obtaining grants under support programs from various foundations;
- official registration of employees;
- preferential conditions for obtaining loans for the purchase of land and equipment;
- in the absence of violations on the part of the legislation, peasant farms are not subject to inspection by commissions from the local government.
Therefore, many rural residents who have sufficient initial capital for the development of agricultural business prefer to create a peasant farm.
Disadvantages of KFH
Unfortunately, no form of business is perfect. And KFH has disadvantages, which, however, are not so many:
- High costs for registration of a farm in comparison with a conventional IP.
- Mandatory use of land for its intended purpose. That is, if your land is intended for growing cultivated plants, you cannot graze livestock on it.
- A participant in such a farm can be a member of only one peasant farm.
Agricultural business is characterized by rather long payback periods. And if you want to speed up the process of making a profit, as well as have some guarantees for yourself, you should follow a few recommendations:
What is IP
An individual entrepreneur (individual entrepreneur) is an individual, a person who has officially formalized commercial activities and pays taxes. That is, an entrepreneur does not formalize a legal entity in order to engage in a certain type of business.
Registration of an IP is a fairly simple procedure that does not require a long time and significant financial costs. Therefore, this way of doing business is suitable for those who want to start their own business from scratch.
Who can establish a KFH
Both a group of people and one person - the head of the KFH - IP can create a KFH. That is, the founder of the farm must already be an individual entrepreneur. Therefore, the concepts of KFH and IP are closely related.
If the farm will include more than one person, an agreement must be concluded between the co-owners. This document includes the following sections:
- General provisions on the work of the farmer's association.
- Information about the head of KFH.
- Rights, duties and responsibilities of all members of the KFH.
- Rules for entry and exit from the peasant economy.
- Regulations on the transfer of personal property to the ownership of KFH.
- Distribution of profits from the activities of the economy.
Package of documents for registration
Only one of the members of the society takes part in the design of the KFH - the head of the KFH with the status of an individual entrepreneur. To register, he must collect a package of documents:
- A notarized statement on the creation of a peasant farm with the signature of the head of the economy.
- Agreement between members of the KFH.
- A copy of the passport of the person in whose name the company is registered.
- Copies of passports of all members of the household.
- TIN of all members of the peasant farm.
- Copies of certificates confirming family ties of co-owners.
- List of OKVED codes.
- Bank details.
- Receipt for payment of the fee.
KFH members
As we have already said, the members of the KFH are mainly relatives: spouses, parents and children, sisters with brothers and more distant relatives. Their number in the composition of the farm is not limited. For other people who cannot confirm family ties with the head of the peasant farm, there are 2 rules:
- It is possible to accept strangers into society, but only so that their total number does not exceed 5.
- The maximum number of different families in a society is 3.
Registration Forms
Previously, it was possible to register a peasant farm as a legal entity, or to stop at an association of people, among which one would have the status of an individual entrepreneur. But in 2003, the Law on KFH was adopted, in which there was no talk of registering a legal entity. Since that time, the heads of communities are required to draw up an IP and submit reports on their own.
In what cases is a legal entity formed?
If you want to run an agricultural business with a large number of partners who are not your relatives, you will not be able to issue a KFH. Registration of an individual entrepreneur of one of the participants and hiring others under an employment contract does not give guarantees to partners and does not protect their rights. In this case, the best option would be to register an LLC.
IP - head of the KFH
The main advantage of creating a peasant farm is that there is no need to register an enterprise. The main thing is that one of the members of the community has the appropriate status.
The head of a peasant farm is called an individual entrepreneur, and a farming society is opened at the place of his registration.
The head of the KFH performs all organizational work:
- acting on behalf of the community;
- organizes his work;
- signs all necessary documents;
- makes transactions with distributors;
- hires employees;
- maintains all records;
- submits reports.
LPH or KFH
The closest form of agricultural activity to peasant farms is private household plots. The difference between personal subsidiary farming and peasant farming is as follows:
- The owner of private household plots works informally, he does not need to register as an individual entrepreneur, pay taxes and provide reports.
- The owner of the subsidiary farm cannot issue declarations and quality certificates for his products. Therefore, he makes products more for his own consumption, and not for sale. The activity of the KFH provides mainly for making a profit.
- Private household plots for growing crops can use no more than 2.5 hectares of land. While for peasant farms there is no limitation in land resources.
- The head of a peasant farm has more chances to get a loan, as he is perceived as an individual entrepreneur, and not a private person.
As you can see, PSP is not a way of doing business; in order to make a profit, it is recommended to create a farm. But, unfortunately, not everyone can afford to buy a large plot of land. Others do not want to live in the countryside just to start a family business.
Accounting KFH
Since the KFH is not a legal entity, the head of the community, in accordance with the federal law of December 29, 1995 No. 222-FZ, can keep records using a simplified system. Accounting reports, according to the law, must be kept according to the book of income and expenses. But different KFHs can differ greatly in their scale. For large farms, the system of accounts and double entry will be the most familiar. It allows you to reflect in detail all business operations and processes.
Tax incentives for peasant farms
After receiving a certificate of registration of a peasant farm, the head of the community must choose a taxation system. Most often, in this case, a single agricultural tax is chosen, in which the community pays 6% of the profit every six months. But for farms there is a grace period for paying taxes, which is 5 years from the date of registration of the IP by the head of the peasant farm. During this period, the economy does not pay taxes, which has a good effect on the payback period of the business.
State support for peasant farms
KFH is one of the few forms of doing business that has received significant support from the state:
- Support in lending to agricultural producers. Subsidies are assigned to companies to cover part of the cost of paying the interest rate of the loan.
- Financial assistance in the form of grants and one-time assistance for the creation and development of peasant farms.
- Property support in the form of transfer of ownership of land plots, non-residential premises, vehicles, equipment, machinery, inventory and other state property on the basis of a lease agreement on preferential terms.
- Compensation of the social insurance fund in case of loss of a breadwinner.
Summing up
You have already understood that the concepts of KFH and IP are closely intertwined. But in its purest form, these two types of business have significant differences. For a clear example, we have created a table of differences, which is better - a peasant farm or an individual entrepreneur:
| Criterion | Individual entrepreneurship | |
|---|---|---|
| Number of members of the organization | An unlimited number of people who are related, in other cases - no more than five. | One man |
| Registration | Only the head of the KFH is registered, but an agreement is required in the case of several co-owners. | Registration of one person with the provision of information about his personality. |
| Income distribution | Between all members of the society, according to the agreement. | All income belongs to the entrepreneur. |
| Responsibility | It is distributed among all participants of the KFH, in accordance with the relevant provision in the agreement. | All responsibility lies with the IP. Responsible for personal property. |
| Privileges | Grace period in taxation, property state support, insurance compensation. | Simplified taxation system, reduced insurance premiums, subsidies and subsidies for start-up entrepreneurs. |
The advantages of an individual entrepreneur over a peasant farm appear only if you want to run a business on your own. In the case of a family or partnership business, it would be better to register a KFH or LLC so that all business participants have the same rights and guarantees.
KFH - the history of formation and success: Video
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