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Corporate documents, also known as legal documents, are a set of specific documents that write down all the necessary facts about the company. These documents are called the "face of the company" because they are the source of official information about the company. Whenever a company is founded or changed, documents with information about the company or information about company changes must be submitted to the commercial register. The registry amends the information in the commercial register and attaches the submitted documents to the company files, giving any person the right to get the official facts about the company.
There are different types of corporate documents, each containing different information. The most important documents are the founding documents, such as the charter of incorporation and the articles of incorporation.
Every document has strict requirements and specific form. A signature in some documents must be notarised in order to have a binding effect. These documents are usually drafted by lawyers or by the law offices that specialise in commercial law. It is important to keep in mind that the status and requirements of legal documents vary between jurisdictions. Moreover, the names of the documents can vary in different countries.
Corporate documents required for company incorporation
To form a company, two basic founding documents are necessary:
Memorandum of association
It contains the fundamental conditions upon which the company is allowed to operate. The document consists of information like firm of the company, data on the founders, information about the equity capital of the company, admissible amount of the foundation expenses and their payment order, etc.;
Articles of association
It generally defines the responsibilities of the board, the type of business to be executed, and means by which the owners exert control over the board of directors. Upon consent of the founders the Articles of association may include specific provisions regarding decision making, restrictions of the board, competence of the council, other specific conditions regarding the process of shares transfer.
Other secondary documents may be demanded. These are as follows:
An application of the local commercial registry – every state has its own form that must be submitted for any changes to take place;
Declaration of each board member / Consent of board member; List of shareholders / A division of the register of shareholders (for limited liability company);
Declaration of company address / Announcement of an office address;
Bank notice on the payment of the equity capital;
Receipt for payment of the state fee;
Every year over USD 1 trillion is distributed worldwide in the form of foreign direct investment. Investments by foreign investors and entrepreneurs are of significant value to the country and are seen as a sign of a healthy economic, political and legal environment. When it comes to investing your money, some countries are simply better than others. It depends on numerous factors such as the country's overall economy and growth prospects, political stability, taxation and the overall legal system, the complexity of starting a business, opening an account and the workforce.
In this article, we summarize three jurisdictions in terms of benefits and other features crucial to foreign investors. These countries have already proven their ability to attract multinationals and other investments, but when it comes to choosing the right place to invest, each country is different and might be better than others in one or more factors.
Singapore
The first country to be analyzed is Singapore, which ranks 2nd among the best countries for investment and 15th among the best countries in the world in the US News Best Countries Ranking developed in cooperation with its international partners .
Located in Southeast Asia, Singapore is a bustling metropolis and home to one of the busiest ports in the world. As one of Asia's four economic tigers, the country has experienced impressive growth in recent years thanks to efficient production and manufacturing processes and innovations in the pharmaceutical and electronics industries. High GDP per capita and low unemployment make Singapore one of the wealthiest countries in the world.
Due to its impressive growth and increasing immigration, Singapore attracts the best professionals to its workforce. The country offers cultural diversity and, with four official languages, is an important gateway for international trade.
The corporate tax rate is 17%, but it can be reduced by taking advantage of numerous government subsidies, incentives, and other programs.
Singapore's legal system is known for its integrity, efficiency and fairness, making the country better than many as a place to start and operate a business. The World Bank Group has recognized Singapore's political and regulatory environment as the most business-friendly in the world.
Other factors:
Least Corrupt Country in Asia;
Best IP protection in Asia;
Most popular country for arbitration in Asia.
United Arab Emirates
The United Arab Emirates or UAE is listed as the 22nd best country in the world and is not mentioned among the best countries for investment according to the above ranking.
Before the discovery of oil in the mid-20th century, the UAE's economy was mainly based on fishing and the pearling industry. The country experienced rapid growth and general transformation along with the start of oil exports in the 1960s. Nowadays the country's GDP can be compared to that of leading European countries and the World Economic Forum has named the UAE the most competitive place in the Arab world.
When incorporating a company in the United Arab Emirates, foreign investors can choose between offshore or onshore registration, whichever is more suitable for the type of company and the activities planned. Onshore registration means that the investor establishes a business presence on the UAE mainland. Offshore registration usually refers to a business presence in one of the UAE's free trade zones.
The UAE does not levy corporate income tax at the federal level. However, most Emirates have some corporate income taxation and can even reach 55% for certain industries. In practice, corporate income tax is mainly levied on gas and oil companies and branches of foreign banks.
Other factors:
The UAE is among the most liberal places in the Gulf with a legal system that allows freedom of religion;
No sales tax or VAT but with plans to introduce it in the future;
In addition to traditional banking, Islamic (or Sharia-compliant) banking has seen tremendous growth in recent times.
Hong Kong
Hong Kong is a special administrative region of China. While Hong Kong is often considered a separate entity from China, it is not a country and therefore appears under the name of China in all lists and rankings. China ranks 26th among the best countries to invest in and 20th among the best countries in general.
Hong Kong's legal system is characterized by strict adherence to principles and the rule of law. It operates a free trade economic system and encourages minimal government intervention in most areas of the economy. This reflects the low number of tariffs and tariffs on traded goods, making it a better place to invest than other parts of China.
Foreign investment is attracted by promoting a favorable investment climate with low taxes, few restrictions and additional incentives to encourage investment. The corporate tax rate is 16.5% with the option to waive 75% of the tax. No tax is levied on dividends.
Company formation is a simple and quick process. All applications for company formation also include an application for the commercial register. The application can be submitted online and typically takes an hour to process (as opposed to four days if the application is submitted on paper).
Audit is a legal examination of an authority, company or official, carried out by a designated educated and independent person (auditor), which includes gathering information about each company. It also implies evaluating this information by verifying the accuracy of the calculations according to certain criteria that allow them to be certified.
Aim of the audit
The most obvious objective of any audit is to provide an independent and fair opinion of the company's financial condition. The auditor's objective is to examine and report whether the data in the annual financial report reflects the true state of the company. During the audit, the auditor is required to follow all auditing standards set by government agencies.
Other tasks of the final audit are, in addition to the confirmation of the annual financial statements:
Independent appraisal of the company's creditworthiness;
Practical recommendations to the company for improvement in the next financial period.
The above tasks are to be presented in the final report after completion of the audit by the auditor. The qualifications and expertise of auditors are often related to the International Standards of Auditing (IFAC).
audit risk
Audit risks arise when an auditor produces an unqualified report or expresses an incorrect opinion. The reasons for such a function may be due to human factors (detection risk), willful fraud, material misstatement or internal misinterpretation (inherent and control risk).
Types of Audits
The most common types of audit services include:
External audit (statutory audit)
These are the most widely used auditing services. The verification of the accuracy of the annual accounts is entrusted to an external and independent auditor who is neither affiliated with the company nor has an interest in the result of the audit (no conflict of interest). The annual financial statement is certainly the company's central source of accountability. Because the financial statements are prepared and approved by the board of directors, the company's shareholders would rely on the external opportunity to verify the report. Therefore, they invite external auditors. In addition, the regulations of many countries require that the final examination be carried out annually;
Internal audit (operational audit)
This is a voluntary procedure by the organization, which is willing to examine the effectiveness of internal controls, verify and monitor possible fraud, review financial data, examine operational processes and other activities. In principle, any company may carry it out for its own sake;
tax audit
Tax audits are conducted periodically by tax authorities in specific jurisdictions or other randomly selected countries. The purpose of the tax audit is to verify the company's tax liabilities and to analyze the accuracy of the tax returns submitted;
Forensic Examination
This is a special investigative test conducted by lawyers and is widely used in courts and investigations to detect fraud, tax evasion, money laundering and other illegal activities by the company or its officers.
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