The main difference between agency transactions is that they involve a third participant—the agent. He becomes an intermediary between the seller and the buyer and helps them complete the transaction. Although the appearance of an intermediary complicates accounting, you should not abandon agency agreements - they are beneficial for both parties.
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Pros for the agent himself
- Reducing the cost of purchasing goods. By concluding an agency agreement, you receive the goods from the supplier for free. You will transfer the proceeds from sales to the supplier, and he will pay you a commission.
- Reducing the tax burden on the simplified tax system. Under an agency agreement, income is only your remuneration, and not all the money that went through the account. For example, you place an advertisement - the client pays money, most of which you transfer to Yandex. It is not profitable to pay tax on the entire amount, so enter into an agency agreement and take into account only your remuneration in taxes.
Three people are involved in the agency agreement
- Principal - hires an agent and instructs him to sell or buy a product or service.
- Agent - carries out the instructions of the principal as an intermediary between the seller and the buyer.
- Seller or buyer - depends on whether the agent is buying or selling.
It's easier to understand with examples.
You have an online store. To deliver the goods, you contact the courier service. In this situation, you, the principal, hire an agent - a courier who delivers the goods to the buyer and receives payment.
You become a principal, even when receiving payment using electronic money (Yandex.Money, PayPal, etc.). After all, the buyer does not pay you directly; the intermediary - the payment system - intervenes in the matter again.
Sometimes the principal instructs the agent not to sell, but to buy the goods. For example, you, the principal, hire a realtor - agent to buy an apartment. This situation also applies to agency transactions.
The agent works on his own behalf or on behalf of the principal
The agent carries out the assignment in two ways - on his own behalf or on behalf of the principal.
In the first case, the agent introduces himself by his own name and draws up all documents in his name, as if there were no principal at all. The client may not even know that he is working with an intermediary, and will turn to the agent with questions and complaints.
In the second case, the agent draws up all documents in the name of the principal and, as an independent entrepreneur, does not participate in the transaction. This is equivalent to working under a power of attorney, and the agent has no obligations to the client.
Agency agreement for the provision of intermediary services with an individual: form
An agency agreement with an individual, in essence, is a transaction under the terms of which one of its participants (agent) provides services to another participant (principal) on a paid basis.
The actions of the executor are carried out in various fields of activity (legal, economic), on behalf of and for funds, or on behalf of, on behalf of and for funds of the principal. Such conditions are stipulated by the Civil Code of the Russian Federation, Chapter 52. Purpose of the contract It is advisable for individual entrepreneurs to use the services of agents to sell and import their products.
Paying for the services of employees monitoring the market, conducting sales and organizing cargo transportation will cost an order of magnitude more.
The Agent undertakes:
- ;
- perform other actions on behalf of the Principal.
2.2. The Agent is obliged to carry out the assignment given to him in accordance with the instructions of the Principal. The Principal's instructions must be lawful, feasible and specific. 2.3. The agent is obliged to perform the actions specified in clause 2.1 of the agreement personally and does not have the right to enter into subagency agreements with other persons. 2.4.
The Agent is obliged to inform the Principal, upon his request, all information about the progress of the execution of the order. 2.5. The Agent is obliged to transfer everything received by the Agent from third parties for transfer to the Principal no later than.
2.6. The Agent is responsible for the safety of documents, property and material assets received by him from the Principal or third parties in the process of executing this agreement. 2.7. An agency agreement with an individual is a type of intermediary agreement. When concluding and preparing it, you need to take into account certain rules and nuances, which we will talk about in our article.
In what cases is an agency agreement concluded with an individual? Features of an agency agreement Terms of an agency agreement with an individual Form of an agency agreement In what cases is an agency agreement concluded with an individual? An organization conducting commercial activities may require services for product market analysis, product promotion, legal support, etc.
- Dispute resolution. The claim procedure for pre-trial dispute resolution is mandatory for the parties to the transaction. Disputes are resolved in court in accordance with the legislation of the Russian Federation.
- Force Majeure.
- Other conditions.
- Signatures of the parties.
Additional documents are attached to a standard sample of an agency agreement with an individual (or an agency agreement with individuals):
- Calendar plan;
- Agent's report;
- Description of services;
- Additional agreement;
- Protocol of disagreements;
- Protocol for reconciliation of disagreements.
A sample agreement is here.
General agency agreement with an individual No. 1920
Moscow January 25, 2021
1. THE SUBJECT OF THE AGREEMENT
1.1. Under this agreement, the Principal instructs, and the Agent undertakes the obligation to perform, on behalf and at the expense of the Principal, legal and other actions specified in clause 2.1 of this agreement, and the Principal undertakes to pay the Agent a remuneration for the execution of this order.
1.2. This agreement is valid on the territory of the Russian Federation.
2. RIGHTS AND OBLIGATIONS OF THE PARTIES
2.1. The Agent undertakes:
- represent the interests of the Principal;
- perform other actions on behalf of the Principal.
2.2. The Agent is obliged to carry out the assignment given to him in accordance with the instructions of the Principal. The Principal's instructions must be lawful, feasible and specific.
2.3. The agent is obliged to perform the actions specified in clause 2.1 of the agreement personally and does not have the right to enter into subagency agreements with other persons.
2.4. The Agent is obliged to inform the Principal, upon his request, all information about the progress of the execution of the order.
2.5. The Agent must transfer everything received by the Agent from third parties for transfer to the Principal to the Principal no later than 14 days from the date of signing the agreement.
2.6. The Agent is responsible for the safety of documents, property and material assets received by him from the Principal or third parties in the process of executing this agreement.
2.7. After the execution or termination of this agreement, the Agent is obliged to immediately return to the Principal the powers of attorney that have not expired and submit a report on the progress of the execution of the order in the form approved by the Principal.
2.8. The Agent is also obliged to perform other duties that are assigned to the Agent in accordance with this agreement or the law.
2.9.1. Issue a power of attorney to the Agent to perform the actions specified in clause 2.1 of this agreement.
2.9.2. Without delay, accept the Agent's report, all documents provided by him and everything performed by him in accordance with the contract.
2.9.3. Provide the Agent with everything necessary to fulfill this agreement.
2.9.4. Pay the Agent the remuneration stipulated by this agreement.
3. PAYMENT PROCEDURE
3.1. The Agent's remuneration under this agreement is 50,000 rubles.
3.2. The remuneration is paid to the Agent in the following order: advance payment in the amount of 10,000 rubles, the balance of the amount (40,000 rubles) upon completion of cooperation.
4. LIABILITY UNDER THIS AGREEMENT
4.1. In case of non-fulfillment or improper fulfillment of obligations by one of the parties under this agreement, the parties shall be liable in accordance with current legislation.
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4.2. In the event of loss or failure to provide the Principal with the Principal's property or funds intended for transfer to him, the Agent shall be liable in the amount of actual damage (the cost of the lost or non-transferred property and/or the amount of funds).
4.3. In case of delay in providing the Agent with the remuneration due to him, the Principal is obliged to pay the Agent a penalty in the amount of 5% of the debt amount for each day of delay.
4.4. If the Agent violates any terms of this agreement, he shall pay the Principal a fine in the amount of 5,000 rubles. Payment of the fine is carried out by the Principal withholding the corresponding amounts of money from the Agent's remuneration.
5. FORCE MAJEURE
5.1. The parties are released from liability for partial or complete failure to fulfill obligations under this agreement if this failure was the result of force majeure circumstances that arose after the conclusion of this agreement, which the parties could not foresee or prevent.
5.2. If the circumstances specified in clause 5.1 of this agreement occur, each party must immediately notify the other party about them in writing. The notice must contain information about the nature of the circumstances, as well as official documents certifying the existence of these circumstances and, if possible, assessing their impact on the party’s performance of its obligations under this agreement.
5.3. In cases of the occurrence of the circumstances provided for in clause 5.1 of this agreement, the deadline for the party to fulfill its obligations under this agreement is postponed in proportion to the time during which these circumstances and their consequences apply.
5.4. If the circumstances listed in clause 5.1 of this agreement and their consequences continue to apply for more than 6 months, the parties conduct additional negotiations to identify acceptable alternative ways of fulfilling this agreement.
6. DISPUTE RESOLUTION
6.1. All disputes and disagreements that may arise between the parties on issues that are not resolved in the text of this agreement will be resolved through negotiations.
6.2. If controversial issues are not resolved during negotiations, disputes are resolved in the manner prescribed by current legislation.
7. CHANGE AND TERMINATION OF THE AGREEMENT
7.1. This agreement may be modified or terminated by written agreement of the parties, as well as in other cases provided for by law and this agreement.
7.2. The Principal has the right to refuse to fulfill this agreement at any time by sending a written notice to the Agent 7 days in advance. In case of refusal of this agreement, the Principal is obliged, immediately after sending a notice to the Agent, to dispose of his property under the jurisdiction of the Agent, and no later than 14 days to pay the remuneration due to the Agent for actions performed by him before the termination of the agreement and to reimburse the expenses actually incurred by him in connection with the execution instructions from the Principal.
7.3. The Agent has the right to refuse to fulfill this agreement at any time by sending a written notice to the Principal 14 days in advance. The Agent is obliged to take measures necessary to ensure the safety of the Principal's property. The Principal must immediately dispose of his property under the control of the Agent, pay the remuneration due to the Agent for actions performed by him before the termination of the contract and reimburse the expenses actually incurred by him in connection with the execution of the Principal’s instructions.
8. FINAL PROVISIONS
8.1. In all other respects that are not provided for in this agreement, the parties are guided by the current legislation of the Russian Federation.
8.2. Any changes and additions to this agreement are valid provided that they are made in writing and signed by duly authorized representatives of the parties.
8.3. All notices and communications under this agreement must be sent by the parties to each other in writing.
8.4. This agreement comes into force from the moment it is signed by the parties.
8.5. This agreement is drawn up in two copies having equal legal force, one copy for each of the parties.
The agent receives compensation from the principal
The agent's income is the remuneration he receives from the principal. There are a lot of options for calculating it, from simple to complicated. Therefore, we recommend that you pay attention to this clause in the contract. Here are some ways to determine your reward:
- A specific amount per transaction. This is a reliable option since you know the amount of the reward in advance. But this is not always beneficial for the agent, since he will not be able to earn more than the agreed amount.
- Percentage of the transaction. This is more profitable for the agent and motivates him to sell more. For example, according to the terms of the contract, the agent will receive 10% from each coffee maker sold. If an agent sells 5 coffee makers for 10,000 rubles, his revenue will be 5,000 rubles.
- A markup on the price of a product or service. The principal sets the minimum price at which the agent can sell the goods, but does not limit it to the maximum. This method motivates the agent to sell at a higher price. For example, the principal instructs to sell a coffee maker for at least 10,000 rubles. The agent sets his price - 12,000 rubles. After selling the coffee maker, he will transfer 10,000 to the principal and keep 2,000 rubles for himself. This will be his reward.
In addition to the amount of remuneration, the agent and the principal agree on the timing of its payment. There are also several options here:
- The principal pays the agent before the work is completed.
- The agent transfers the proceeds from sales minus his remuneration to the principal.
- The principal pays the agent after the contract is executed. If no deadline is specified in the contract, the principal pays the remuneration within a week after receiving the report from the agent.
Duration of the agency agreement
The contract in question may be concluded for a period determined by the parties, or the duration of the contract may not be specified. If the validity period of the contract is not specified, then in fact it will be valid until the parties fulfill their obligations under it.
The duration of the contract should be distinguished from the period of fulfillment by the agent of its obligations. If you provide for a deadline for the fulfillment of obligations by the agent, then in case of violation of it, you can collect penalties, which may also be provided for in the contract, although it is not always possible to determine the deadline for fulfilling obligations by a specific date, as, for example, in a work contract.
In addition, the contract may contain specific terms within which the agent must perform a number of certain actions.
The principal reimburses the agent for expenses
One of the main advantages of a contract for an agent is the minimal cost of its execution.
Firstly, the agent does not spend money on purchasing the goods, because they belong to the principal. And if a product sells poorly, it does not cause losses.
Secondly, the principal reimburses the agent for expenses under the contract. It is possible to set a fixed amount of compensation without taking into account actual costs. Another way is to calculate it based on the agent's actual expenses. Then, in order not to go broke on compensation, it is important for the principal to define in the contract:
- what expenses he reimburses (so that the agent does not include his morning coffee in the list) and their maximum amount;
- documents with which the agent confirms expenses.
Agency contract and agreement
Payment of the fine is carried out by the Principal withholding the corresponding amounts of money from the Agent’s remuneration. 5. FORCE MAJEURE 5.1. The parties are released from liability for partial or complete failure to fulfill obligations under this agreement if this failure was the result of force majeure circumstances that arose after the conclusion of this agreement, which the parties could not foresee or prevent. 5.2.
If the circumstances specified in clause 5.1 of this agreement occur, each party must immediately notify the other party about them in writing. The notice must contain information about the nature of the circumstances, as well as official documents certifying the existence of these circumstances and, if possible, assessing their impact on the party’s performance of its obligations under this agreement. 5.3.
The agent prepares a work report
A report is a mandatory document with which the agent informs the principal about the work done. We recommend that you define the following conditions in advance:
- report form - usually it is drawn up as a separate document;
- information that the agent includes in the report. For example, what kind of work the agent performed (list of services provided, list of goods sold, etc.) and how much money he spent on it. We recommend that the report also state the amount of the agent’s remuneration;
- The deadline for sending the report is after each transaction or for a period (for example, once a month).
The principal sends comments on the report within 30 days, unless another period is specified in the agreement. Later you won’t be able to make changes and you will have to pay the agent according to the report.
This is not all that can be said about agency agreements. We have planned several more articles about how the agent and the principal pay taxes under different interaction schemes.
Features of tax accounting
As can be seen from the above data, commercial transactions between the agent and the customer are subject to VAT. In addition, income is included in the tax base for income tax and simplified tax, like other income from the activities of the company. Expenses are divided into those included in the tax base and those not included in it. According to Art. 252 of the Tax Code of the Russian Federation (clause 1), the taxpayer has the right to reduce the base for it by the amount of confirmed costs, except for those listed in Art. 270 (9). In particular, the costs of the agent under the contract with the principal are also mentioned here, if they are reimbursed by the latter.
The amount that he transfers to the customer under the contract is not included in the agent’s income. At the same time, if the customer does not reimburse the costs according to the contract, then they are included in the tax base, in accordance with Art. 252 of the Tax Code of the Russian Federation.
Main
- An agent under an agreement with a principal can act both on his behalf and on his own, providing intermediary services.
- Accounting for such transactions and movements on them is based on taking into account all significant clauses of the agreement.
- The agent's remuneration is paid based on his report on the work done.
- Amounts under an agency agreement are subject to VAT on both sides; income, similarly, is included in the calculation of profit for the period and in the calculation under the simplified tax system.
- Reduction costs can only be included to the extent that they are not reimbursed by the other party. An agent whose expenses are reimbursed by the customer does not have the right to include these amounts in the tax calculation.
