04 May Physical Person Vs. Moral Person
When starting a business you need to define if you want to be responsible as a natural person or as a moral person, this is where you decide if you will work on your own or associated with more people. It is a very important decision, you need to plan and define what is best for your business. That is why we will tell you what each one is and what its benefits are.
Main differences between Physical Person and Moral Person
- The natural person is to identify you by your name and the moral person is identified by a name or company name, which is usually the name you give to your company.
- A natural person has a civil status while a moral person does not, since they are a group of people.
- People of moral regime can only have a nationality, for example if they have their domicile in Mexican national territory.
- The morals are obliged to present their accounting before the SAT while the natural persons only if their income is higher than 4 million.
- The legal entities are divided into two tax regimes: the general regime and non-profit purposes. Individuals are divided into four: salaried, professional, landlord or entrepreneur.
- You can register your business with any of them.
- Legal personality to exercise rights and contract obligations.
- Both individuals and corporations can have assets, that is, rights and obligations in economic terms.
- Both have an address.
Which is better for a business?
If you are only undertaking your business, it is recommended that you do it as an individual, since the process is much faster and the only legal representative or owner of the company will be you. Since any legal obligation or decision will only be your responsibility, that is, the power is only in you. To complete this process you only need to register in the Tax Administration System and that’s it.
But if on the other hand they are determined to create a company by the hand of more people or partners, the process includes going to a notary to give faith that you are building a business together with other people. Afterwards, you will be able to register before the SAT under the regime of a moral person. Here the obligations and rights are divided among all those who belong as owners of the company.
Remember that you can choose the one that best suits your business and it is very important that you register with the SAT, we also give you the reason why it is convenient for you to register