According to data released by the State Administration for Market Regulation on November 14th, in the first three quarters, 17.196 million new individual businesses were established nationwide, an increase of 11.7% year-on-year. As of the end of September 2023, the number of registered individual businesses in China has reached 122 million, accounting for 67.3% of the total number of business entities. With the development and growth of individual businesses, over 70000 individual businesses in China have successfully transformed and upgraded into enterprises since the beginning of this year, adding new vitality to the market. The "individual to enterprise" transformation is not only a change in the name of individual businesses, but also an optimization of internal governance structure, which will bring more "real" changes, help individual businesses become bigger and stronger, enhance market competitiveness, and expand their survival and development space. For example, in terms of legal liability, individual businesses do not have legal personality, and operators bear unlimited joint and several liability, that is, they are responsible for all debts with all their personal property. After transforming into a corporate enterprise with legal personality, the shareholders of the company bear limited liability and are only responsible for the company's debts to the extent of their capital contributions, which is conducive to controlling and preventing operational risks. In terms of obtaining funds, on the one hand, enterprises are more likely to obtain bank loans than individual businesses, and the loan amount will increase; On the other hand, it can attract investment by increasing capital investment and expanding business scale through the participation of multiple shareholders or partners. In terms of market impact, enterprises are easier to position themselves in the market, have higher credibility, and are more likely to access social resources than individual businesses, expanding their potential for growth. In terms of attracting talents, due to the more standardized organizational structure of enterprises and more comprehensive security measures such as elderly care and medical care, it is easier to attract and retain outstanding talents than individual businesses. Article 13 of the "Regulations on Promoting the Development of Individual Industrial and Commercial Households", which came into effect on November 1, 2022, states that individual industrial and commercial households can voluntarily change their business operators or transform into enterprises. If a business operator changes, they can directly apply to the market entity registration authority for change registration. If it involves administrative licensing, the administrative licensing department shall simplify the procedures and provide convenience for individual industrial and commercial households in accordance with the law. The implementation of this regulation has pressed the "acceleration button" for the transformation of individuals into enterprises. Afterwards, various regions have introduced policies and measures to accelerate the promotion of "individual to enterprise" transformation. For example, according to Shandong regulations, individual industrial and commercial households are allowed to continue using their original business name and retaining their original business address in accordance with the law, and are allowed to adjust and expand their business scope independently (excluding pre licensing). In Gansu, the newly launched "individual to enterprise" platform has broken the old model of "cancellation before registration". It not only quickly completes the transformation and upgrading procedures for individual businesses, but also retains the original business name of individual businesses to the maximum extent, continuing the original establishment date and unified social credit code of individual businesses. Many places also stipulate that "individual to enterprise" business entities can enjoy preferential policies such as reducing corporate income tax and personal income tax. These policy measures not only reduce institutional transaction costs, but also expand the development space of individual businesses, and are conducive to creating more "century old stores". It is worth mentioning that the series of policy measures for "individual to enterprise" not only benefit individual businesses, but also help local government departments to explore potential private enterprises for development
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：Worker Daily
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