What is a business purpose statement? The business purpose is one of the absolute items to be stated in the articles of incorporation, and it is set for the purpose of what the company will do when establishing the company. This is a complete summary of how to write a business purpose statement.
The Articles of Incorporation are simply the company’s rulebook. It is also call the “company constitution” and must be established when establishing a company. The Articles of Incorporation are open to people outside the company as well as within your company. We need to tell society exactly what the company will do.
We explain the articles of incorporation in detail in this article. For those who want to reduce the cost of establishing a company, it is recommended to create an electronic articles of incorporation that do not require revenue stamp fees.
How to write a business purpose statement? Three points to decide.
The primary purpose of setting a business objective is to ensure “transaction stability”. Unlike individuals, companies have no reality, so the articles of incorporation set the purpose of the business in order to be trusted by the business partners. Three points are required when deciding the business purpose.
Legality, as the name implies, means that the business purpose for which the company is established is not illegal. For example, content of business purposes that are offensive to public order and morals, such as “fraud” and “import of drugs,” is not permitted.
The purpose of establishing a company must be to make a profit. Therefore, volunteer activities and donation activities cannot be a non-profit business purpose.
Business objectives need to be set so that anyone can see them. As mentioned above, the reason for the business purpose is to ensure the stability of the transaction, and you cannot trust it unless you know what the business purpose is doing. Therefore, the business purpose should be generally understandable.
Points to keep in mind when writing a business purpose statement
Check the type of industry that requires a license or notification
When doing business, depending on the type of business, permission or notification may be required. In order to obtain a license, you must write a business purpose that conforms to the articles of incorporation according to the license you want to obtain. In some cases, not only the content of the business but also the detailed wording that describes the name of the law on which it is based may be specified.
If this point is neglected, not only will the license not be granted, but the articles of incorporation will have to be changed later. The shortcut is to check in advance.
The following are typical examples of businesses that require a license.
To start a travel agency, you need to register with the prefectural governor.
The business purpose of the Articles of Incorporation ” travel agents agency “, ” travel agent agency based on the travel law one of the” must always include.
The sale of used clothing and used goods between individuals is flourishing. If you want to resell as a corporation and make a profit, you need to obtain permission from the Public Safety Commission based on the antique business law. The window will be the crime prevention section of the Life Safety Division of the police station.
In order to obtain permission, the purpose of the Articles of Incorporation must be stated as ” management of a recycle shop ” or ” secondhand shop based on the antique business law ” . In addition, it would be even better to add what you specifically deal with as ” buying and selling of XX “.
Operation of portal site for job information
If you try to develop a SNS or blog and operate a portal site, you do not need permission or notification to create the portal site itself. There is no problem if you describe “operation of portal site”, “information processing service industry and information provision service industry”.
Don’t forget to write down the businesses you may do in the future
In principle, it is not possible to develop a business that is not stated in the articles of incorporation.
If you want to carry out a business that is not listed, you must follow the procedure for amending the articles of incorporation. Please be aware that a registration license tax of 30,000 yen will be charged for the change.
There is no upper limit to the number of items listed
There is no limit to the number of business objectives listed. In addition, it is not always necessary to carry out the business described in the articles of incorporation.
With a view to business expansion
It’s okay to write down the businesses that you might do even a little in the future. Even if you can’t get started right after the establishment. In fact, Yahoo Japan Corporation has a total of 64 business objectives written on it.
Be careful not to overwrite the business purpose
Some may think, “If there are no restrictions, just write a lot of business objectives!”
It is say that about 20 to 30 units are common in major trading companies and famous IT companies with a wide variety of business contents. But be aware that if you describe many business purposes in a newly establish company, the following disadvantages will occur. will do.
Disadvantages 1. Loss of credibility
If you are a large company, it is difficult to understand what you want to do if the newly established company has too many business objectives written on it. There is also the risk of not gaining the trust of our business partners and clients.
Make sure you know what you are most focused on while your company is small.
Disadvantages 2. No loans
When you open an account or apply for a loan at a bank or financial institution, you are suspected of being a company that you cannot grasp the actual situation, and you will not only be asked questions, but you will also be more likely to fail the examination.