[Startup Lawyer] Procedure for Establishing a Corporation
Article posted in 2020-04-13 17:28:25 | VEAT
“Commercial Code” classifies ‘corporation’ into five types: merger companies, limited liability companies, joint-stock companies, corporations, and limited liability companies. Due to differences in registration procedures for each company type, it is advisable to determine the purpose of the business when establishing a corporation.
Among ‘corporations’, ‘stock corporation’ is advantageous in terms of capital concentration, and if the business fails, the shareholders’ liability is limited. Therefore, it is the most frequently used type for registration under the “Commercial Code”.
A ‘stock corporation’ is a company where capital is divided into shares, and shareholders become shareholders through the acquisition of shares, with shareholders being liable only within the limits of the acquisition price of shares (limited liability).
Stock corporations can be established through two methods: founding establishment and public offering. Most stock corporations are established using the founding establishment method, where the founding member takes over all the initial shares.
A founding member, is the person who signs the initial charter at the end of the initial charter of a stock corporation. There are no special restrictions on the qualifications of the founding member, so natural persons as well as legal entities can be founding members. Therefore, even if the person is a minor, they can become a founding member by being represented by a legal representative or obtaining consent; this is also possible for foreigners and foreign legal entities.
In summary, when establishing a stock corporation, shareholders become founding members, and as the number of founding members is not restricted, it is possible to establish a company with one person. However, since there must be a director or auditor who performs the role of the report examiner, the minimum number of people actually required for establishing a stock corporation is considered to be two.
Law firm Veat is handling corporate registration and establishment procedures for startups, and based on its extensive experience in establishing numerous stock corporations, it provides differentiated legal services, from drafting the charter, according to the establishment purpose of your company. If you need assistance with corporate establishment, please contact Law firm Veat.
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