The difference between running a factory and a company.

Opening a factory means opening a sole proprietorship or partnership. The difference between starting a factory and starting a company is as follows:

First, the legal status is different.

A sole proprietorship enterprise is an enterprise legal person established in China according to law, which is invested by a natural person, and its property belongs to the investor, who assumes unlimited liability for the debts of the enterprise with his personal property. A sole proprietorship enterprise does not have legal person status.

A partnership enterprise refers to a for-profit organization in which all partners enter into a partnership agreement, * * * jointly contribute capital, * * * jointly operate, * * * enjoy benefits, * * * bear risks, and bear unlimited joint and several liabilities for corporate debts. A partnership enterprise does not have legal person status.

The company is an economic entity with full legal personality.

Second, the scope of the property that bears the responsibility is different.

In a sole proprietorship enterprise or partnership enterprise, the investor shall bear unlimited liability for the debts of the enterprise.

Shareholders of the company shall be limited to their capital contribution.

Third, the applicable law is different.

A sole proprietorship enterprise is established in accordance with the sole proprietorship enterprise law, and a partnership enterprise is established in accordance with the partnership enterprise law. The company was established in accordance with the Company Law and adjusted by the Company Law.

Fourth, tax management is different.

First of all, from the perspective of tax management, the tax authorities are relatively relaxed in tax management of sole proprietorship enterprises and partnerships, while the requirements for companies are much stricter.

Secondly, the income tax involved is different. Sole proprietorship enterprises and partnership enterprises only need to pay personal income tax, not corporate income tax; When distributing profits to shareholders, the company must pay enterprise income tax and personal income tax. From this perspective, opening a factory has more advantages than opening a company.

References:

Baidu encyclopedia-partnership enterprise

Baidu encyclopedia-company