We all know that there is a certain process for registering a company, and there are many rules and regulations. If you don't pay attention, you may be deceived by others or fall into a trap. Next, follow Mande Enterprise Services to see the 8 major misunderstandings in registering a company!

1. Registered capital and registered capital

Registered capital is the amount of property granted by the state to an enterprise legal person for operation and management or the enterprise legal person's own property.

Registered capital, also called statutory capital, is the amount of capital contribution or total capital subscribed by all shareholders or promoters as stipulated in the articles of association of a corporate enterprise, and is registered with the company registration authority in accordance with the law.

The difference between the two:

1) The registered capital reflects the business management rights; the registered capital reflects the property rights of the company's legal persons, and the capital invested by all shareholders It shall not be withdrawn and the company shall exercise its property rights.

2) The registered capital is the total actual assets of the enterprise, and the registered capital is the total amount of capital contributions paid by the investors.

3) The registered capital increases or decreases with the increase or decrease of the actual capital. That is, when the actual capital of the enterprise increases or decreases by more than 20% compared to the registered capital, a change registration is required. The registered capital cannot be increased or decreased at will without going through legal procedures.

2. After the registered capital subscription system, the bigger the registered capital, the better

The "Company Law of the People's Republic of China" (2015 edition) and the "State Council's Notice on Issuing Registration Notice on the Capital Registration System Reform Plan (Guofa [2014] No. 7) relaxed the minimum registered capital requirements for most industries, and shareholders can independently agree on the capital contribution period. The industrial and commercial departments will no longer collect capital verification reports, and will no longer register actual capital. To collect capital, there are only 27 types of financial-related enterprises that still need to verify their registered capital.

However, the bigger the registered capital, the better. It needs to roughly match the business scale of the enterprise. The adverse effects of excessive registered capital are:

1) Excessively high and insufficient registered capital indicates that shareholders have an obligation to contribute to the company they founded and are liable for breach of contract to other shareholders. (Article 28 of the "Company Law")

2) It is not conducive to the introduction of new shareholders, and the tax burden on equity transfer is high.

3) The procedures for capital reduction are cumbersome.

4) The unarranged capital contribution is the assets that the bankrupt company needs to recover. If the debtor's capital contributor has not fully fulfilled its capital contribution obligations, it shall pay the capital contribution subscribed and is not subject to the capital contribution period limit. (Article 35 of the Bankruptcy Law of the People's Republic of China).

5) Legal risks of insufficient capital contribution (Article 25 of the Bankruptcy Law of the People's Republic of China).

3. Investment is not limited to the name of a natural person.

Investment in the establishment of a company can be based on different investment purposes. Different entities can be planned and selected as investors to reduce the investor’s future tax burden. Lower, higher return. Generally, you can refer to the following ideas:

If the company is raised like a pig and held for a short period of time, it is appropriate to directly invest in the name of a natural person. Because the personal income tax rate of 20% is relatively low for equity transfers; ("Individual Income Tax Law")

If the company is raised as a son, it is advisable to invest directly in the name of a legal person and indirectly by the natural person shareholders of the legal person. The purpose of long-term holding is to continue to obtain dividends and dividends. Dividends, dividends and other equity investment income between resident enterprises are tax-free income; even if the investment fails, equity transfer losses can be deducted before tax. (Enterprise Income Tax Law)

In addition, if there are a large number of natural person shareholders, you can also consider setting up a partnership first and then making capital contributions in the name of the partnership. This will not only help the company's stability, reduce the number of direct shareholders, but also It can reduce the tax burden on future equity transfers.

4. Currency is not the only way of investment

Shareholders can make monetary and non-monetary contributions, including physical objects, real estate, land use rights, patented and non-patented technologies, Copyrights, trademark rights, etc. can also be used as debt-for-equity swaps or equity of established companies as capital contributions (equity swap).

Properties that cannot be used as capital contributions to a registered company include labor services, credit, names of natural persons, goodwill, franchise rights, or property with guarantees, etc.

(Article 27 of the "Company Law Registration and Management Regulations" (2014))

In addition to monetary funds, different investors (individuals and companies) contribute capital with non-monetary assets, which may cause problems during the investment process. There is a tax liability (for details, please refer to the "List of Tax-related Situations for Enterprises/Individuals Investing or Increasing Capital with Different Capital Contributions"); after physical investment, the depreciation and amortization of related assets can reasonably reduce the amount of income tax payable by the company established.

5. Not all businesses must comply with the business scope

When the company is established, many investors struggle with the business scope. In fact, the business scope only includes the company's daily business. As long as the company is not engaged in franchise or restricted business, it generally does not affect the legality of the company's business, the validity of external contracts signed, nor the company's issuance of invoices and legal payments. Tax. In addition, as long as the business needs it, the enterprise can also apply for registration change of the business scope at any time during the operation period.

6. Not all one-person limited companies only bear limited liability

A natural person can set up a one-person limited company; a legal person can set up multiple one-person limited companies without restrictions. On the surface, a one-person limited liability company only needs to assume limited liability, which is better than an individual industrial and commercial household; however, there are prerequisites for assuming limited liability, and there are two additional requirements that must be met:

Firstly, Self-certification that the company's property is independent: "If a shareholder of a one-person limited liability company cannot prove that the company's property is independent of the shareholder's own property, he shall bear joint and several liability for the company's debts." (Article 63 of the "Company Law")

Second, the annual report needs to be audited, which increases the cost of a one-person limited liability company: "A one-person limited liability company shall prepare a financial accounting report at the end of each fiscal year. and audited by an accounting firm.” (Article 62 of the "Company Law")

So entrepreneurs should carefully choose to register a one-person limited liability company.

7. Newly established companies that are not operating do not need to prepare statements and tax returns

“Taxpayers must comply with the provisions of laws and administrative regulations or the tax authorities must comply with the provisions of laws and administrative regulations. We must truthfully handle tax returns within the reporting period and content, and submit tax returns, financial accounting statements, and other tax information that the tax authorities require taxpayers to submit based on actual needs." (Article 25 of the "Tax Collection and Administration Law")

"If a taxpayer has no tax payable during the tax period, he shall also file a tax declaration in accordance with regulations. Taxpayers who enjoy tax reductions and exemptions shall During the period of tax reduction and exemption, tax declarations must be made in accordance with regulations." (Article 32 of the "Implementing Rules of the Tax Collection and Administration Law")

"If a taxpayer fails to file tax returns and submit tax materials within the prescribed time limit, the tax authority shall order him to make corrections within a time limit and may impose a fine of 2,000 yuan. A fine of not more than RMB 10,000 may be imposed; if the circumstances are serious, a fine of not less than RMB 2,000 but not more than RMB 10,000 may be imposed" (Article 62 of the "Tax Collection and Administration Law")

8. Not all tax returns are required to be filed on a monthly basis. Handling

Value-added tax and business tax: If the taxpayer has a tax payment period of one month or one quarter, he or she must file a tax return within 15 days from the expiration date. (Article 23 of the "Interim Regulations on Value-Added Tax"; Article 15 of the "Interim Regulations on Business Tax")

Corporate income tax: Corporate income tax is paid in advance on a monthly or quarterly basis. (Article 54 of the "Enterprise Income Tax Law")

Personal income tax: The tax payable on wages and salaries is calculated on a monthly basis and shall be levied by the withholding agent or taxpayer on the fifteenth day of the following month. Pay it to the state treasury within days and submit a tax return to the tax authorities. (Article 9 of the "Individual Income Tax Law")

In addition, according to the "Announcement of the State Administration of Taxation on Reasonably Simplifying the Number of Taxpayer Declarations and Payments" (State Administration of Taxation Announcement No. 6 of 2016), from The following regulations can be implemented from April 1, 2016:

“1. Small-scale value-added tax taxpayers shall pay value-added tax, consumption tax, cultural undertaking construction fees, and urban maintenance surcharges with value-added tax and consumption tax In principle, taxes such as construction tax and education surcharge shall be reported on a quarterly basis. If the taxpayer requests not to file on a quarterly basis, the tax authority shall determine the tax payment period based on the amount of tax payable.

2. Urban maintenance and construction taxes and education surcharges levied with value-added tax and consumption tax are exempt from zero declaration.

3. Qualified small and low-profit enterprises are required to declare and prepay corporate income tax on a quarterly basis.

4. For regular quota accounts that adopt the simple declaration method, if they deduct taxes in batches through the electronic tax payment system of the finance, taxation, treasury and bank within the prescribed period or entrust a bank to withhold the assessed taxes, they do not need to go through the declaration procedures for the current period. Implement payment instead of reporting. ”

The workload of tax declaration for small and micro enterprises and small-scale VAT taxpayers will also be reduced.

In summary, start-ups need to update their concepts and use their capabilities However, when registering a company, it is necessary to keep pace with the times according to the actual situation of the project and development needs.

For enterprise name verification, please contact Mande Enterprise Service, a one-stop enterprise service platform