First of all, a wholly-owned enterprise is conducive to reducing tax expenditures.
In fact, anyone who has studied law or studied law knows that the biggest difference between a wholly-owned enterprise and a limited company is the different tax payment methods. Solely-owned enterprises pay taxes according to individual income tax, while limited liability companies need to pay enterprise income tax.
Li Jiaqi set up a sole proprietorship enterprise, largely to reduce tax expenditure. After all, Li Jiaqi, as a 1 person among network celebrities, makes money at a speed that ordinary people can't imagine. If he sets up a limited liability company, the amount of tax he needs to pay is quite high. However, if he pays personal income tax, once he distributes the funds to employee income and enterprise construction, his income is only a small part, so there is no doubt.
Secondly, sole proprietorship helps to minimize personal responsibility.
Secondly, for the establishment of a one-person sole proprietorship enterprise in Li Jiaqi, he bears unlimited liability as a natural person, but if a limited liability company is established, he needs to bear limited liability as a legal person.
From this point of view, the establishment of a one-person sole proprietorship enterprise in Li Jiaqi can minimize personal responsibility and, to a certain extent, avoid the high risks and consequences of entrepreneurial failure.
Finally, a sole proprietorship enterprise does not need the setting of capital registration.
Finally, China's law also stipulates that a sole proprietorship enterprise does not need the mandatory requirement of registered capital, while a limited company needs to have registered capital.
Although as one of the most profitable online celebrities, he is certainly not short of money, and millions of registered capital can certainly be easily taken out, but setting up a one-person sole proprietorship enterprise in Li Jiaqi is still a choice to avoid risks to a great extent. I have to say that Li Jiaqi jumped out to start his own company, which is still a cautious exploration and development, not as bold as we thought.