10 DIFFERENCES BETWEEN A NATURAL PERSON AND A
LEGAL ENTITY
NATURAL PERSON
 The incorporation of the company is simple
and fast, with no major formalities, and the
required documentation is minimal.
 are not required to keep and present so
many accounting documents.
 if the company does not obtain the
expected results, the business line can be
rethought without any inconvenience.
 companies incorporated in the form of a
natural person can be easily liquidated or
sold.
 ownership, control and management are
vested in a single person.
 The company's equity can be increased or
reduced without any restriction.
 can avail themselves of more favorable tax
regimes.
 has unlimited liability, i.e., the owner
assumes unlimited liability for any debts or
obligations that the company may incur,
which means that he must guarantee such
debts or obligations with his personal assets
or property.
 The fact that the country has less access to
financial credit means that banks and
financial institutions are less willing to
grant loans to individuals.
 lack of continuity in case of owner's
incapacity
LEGAL ENTITY
 Your RUC starts with 20 and its last digit is
random.
 A legal entity is one that is constituted on
paper, i.e. public deed or form of
incorporation.
 has limited liability, i.e. it is liable for
obligations only in monetary terms with
indemnities.
 greater availability of capital, since it can be
contributed by several partners.
 greater possibilities of accessing financial
credit (banks or financial entities are usually
more willing to grant loans to legal entities
rather than to individuals).
 It is more difficult to set it up and has a
greater number of formalities and
requirements.
 are required to keep and present a greater
number of accounting documents.
 presents a greater number of restrictions at
the time of expanding or reducing the
company's equity.
 has a greater difficulty to liquidate or
dissolve
 Can operate as Corporations, Limited
Liability Companies, Partnerships, etc.