One of the first things to do to formalize a company or enterprise is to register with the Tax Administration Secretariat (SAT) for , and some of the most common questions are: What is the difference between natural and moral person? or also, In what regime do I register?
In Mexico it is possible to have a business being a natural person or a legal personIt’s just a matter of understanding the differences between each of these options and defining which one best suits your activities.
Read on and learn with examples of natural and legal person, their definitions and the regimes that exist for each one and some of their similarities and differences. 📝
What is a natural person?
A natural person is a individual who carries out an economic activity, for which it acquires certain rights and obligations. There are different types of tax regimes for individuals, depending on their work activities and income.
Regimes for natural persons
1. Salaried
This regimen is for individuals who receive regular salary and benefits, when hired by an employer. Individuals who are in this regime, participate in the distribution of profits and are entitled to severance pay.
2. Business and professional activity (fees)
It is for individuals who make a profit by providing their professional services independently. It is also for those who carry out commercial, industrial, trucking and disposal activities.
3. Tax Incorporation Regime or RIF (formerly the Small Taxpayer Regime or REPECO)
It is an exclusive scheme for people who carry out a commercial activity or provide their serviceswithout the need to have a professional title and with the condition that their annual income is less than two million pesos.
4. Leasing
This scheme is for individuals who own real estate (for example a house, a building, a piece of land, a place, etc.) and they rent it to other people to use it for a certain time and for a specific purpose.
5. Business activities with income through technological platforms
It is the newest of the schemes for natural persons. As its name says, it is exclusive for those people who do sales through digital platforms like , , YouTube, , etc. The income of the person who registers in this regime must not exceed 300 thousand pesos per year.
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Examples of natural person
Any individual who carries out income-generating activities is a natural person. Let’s look at some examples:
- Seller (with a physical business or online)
- Independent accountant
- Businessman
- employee of a company
- Influencer on YouTube
- seller on marketplaces
- Civil servant
- landlord of an apartment
- Barista in a cafe
- Interior designer
What is a moral person?
It what does a moral person mean is he group of individuals who come together for a collective purpose. It is called a “moral” person because it cannot be grasped with the senses, like a physical person. But, like the latter, he has rights and obligations before him.
Like natural persons, there are different tax regimes to classify legal entities. Meet them below.
Regimes for legal persons
1. General regime
This is a regime for legal entities that have lucrative purposes, that is, economic gains with your activities.
2. Non-profit purposes
The legal persons who they do not intend to receive money in exchange for their activities they must register in this scheme.
Examples of legal person
Now let’s see some examples of legal entities in Mexico:
- Anonymous society
- Bank
- Labor union
- Financial lessor
- Restaurant
- Chamber of Commerce
- Auto shop
- brokerage house
- charitable institution
- Non profit civil association
What is the difference between natural person and moral person?
Natural and legal persons have several things in common, for example: both have an RFC with homoclave and are required to pay taxes. But there are also some key features to differentiate between a natural person and a legal person on the SAT. Discover some of the important ones below:
- The natural person is identified by his name, the moral person does so by his company name.
- The natural person has CURP, the legal person does not.
- A natural person has marital status, while a moral person does not.
- Only natural persons can have another nationality besides Mexico.
- There are five regimes for individuals (salaried, business, RIF, lease, income through technology platforms); for legal persons there are only two regimes (general and non-profit).
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How to know if an RFC is from a natural or legal person?
I’m sure you’ve been asked for natural person company name or the legal entity rfc, but you don’t know how to tell them apart. It is very easy to identify if an RFC (Federal Taxpayer Registry key) belongs to a natural person or a legal entity, it is only a matter of count the number of characters.
The RFC for individuals is made up of 13 alphanumeric characters, while the RFC for legal entities has 12. Each of these numbers and letters has a meaning. Do you want to know it?
💡 Type: in this post we explain in detail.
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Comparative table of the attributes of natural and legal persons
We already talked about the main differences between natural and legal persons; so now all you have to do is take a look at this comparative table in which you will be able to see some of the attributes of each of these entities.
Natural person Moral person Name Denomination or company name Physical body Intangible Capacity to enjoy and exercise Capacity to exercise Nationality Nationality Patrimony Patrimony Marital status No marital status May have more than one nationality May only be Mexican RFC with 13 alphanumeric characters RFC with 12 alphanumeric characters
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Summary
What is a natural person?
A natural person is an individual who carries out an economic activity. Individuals have five tax regime options to pay their taxes: salaried, business, RIF, lease, income through technology platforms.
What is a moral person?
A moral person is a set of individuals who come together for a collective purpose. Moral persons can belong to the general regime and to the non-profit regime.
What is the difference between natural person and moral person?
- The person has a name, the moral person has a name or business name.
- Only a natural person can have CURP.
- A natural person has marital status, a legal person does not.
- Only individuals can have another nationality, legal entities can only be Mexican.
- There are five regimes for individuals and two for legal entities.
How to know if an RFC is from a natural or legal person?
The RFC of legal persons has 12 alphanumeric characters, the RFC of natural persons has 13.
If you have a business, it is possible to register as a natural person or as a legal person. We invite you to read our and formalize your business. Remember that every company and entrepreneur in Mexico has the obligation to pay taxes. When you have everything ready to start, , the leading e-commerce platform in Latin America. 😉
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