In real estate investment, if you have taxable income of 900 million yen or more, incorporation is effective for tax savings.What type of incorporation should I choose?There are various types of companies such as joint stock companies, limited liability companies, general partnership companies, limited partnership companies, etc. This time, I would like to explain the form of incorporation from the perspective of real estate investment.
table of contents
Form of incorporation
Ltd.
A company in which an investor invests money, etc., and leaves the management to the investor's choice.
Investor: OK for 1 or more people
Investor Responsibility：Limited liability
Purpose and amount of investment: Money & other property (credit/labor investment not allowed) [1 yen or more]
Announcement of settlement of accounts (announcement of settlement of accounts):necessary
Internal autonomy (regarding compulsory regulations, distribution of benefits and authority, etc.) :
Regulations ⇒ There are many legal rules.Distribution of profits and authority is proportional to the amount of investment
internal autonomy(Institutional design): General meeting of shareholders and one director required (establishment of oversight body required)
Public offering of stock:can
A limited company
It is a company that consists only of investors who have invested money.In principle, it will be managed by investors.
Investor Responsibility: limited liability
Purpose and amount of investment: Money & other property (credit/labor investment not allowed) [1 yen or more]
Announcement of settlement of accounts (announcement of settlement of accounts):do not want
Internal autonomy (regarding compulsory regulations, distribution of benefits and authority, etc.) :
Autonomy by Articles of Incorporation ⇒ It can be freely decided by internal regulations.Free distribution of interests and authority
Internal autonomy (institutional design): No restrictions (no regulations on organizational design. Decisions are made by a majority of executive officers)
Public offering of stock:Can not
Partnership company
In principle, it is a company run by everyone.All have unlimited liability to their creditors.
Investor Responsibility: unlimited liability
Purpose and amount of investment: In addition to money and other assets, credit and labor contributions are also possible [other than money and goods are also possible]
Announcement of settlement of accounts (announcement of settlement of accounts):do not want
Internal autonomy (regarding compulsory regulations, distribution of benefits and authority, etc.) :
Autonomy by Articles of Incorporation ⇒ It can be freely decided by internal regulations.Free distribution of interests and authority
Internal autonomy (institutional design): No restrictions (no regulations on organizational design. Decisions are made by a majority of executive officers)
Public offering of stock:Can not
Joint stock company
It is a company in which an investor who does not participate in management joins the general partnership.
Investor Responsibility: unlimited liability, limited liability
Purpose and amount of investment: In addition to money and other assets, credit and labor contributions are also possible [other than money and goods are also possible]
Announcement of settlement of accounts (announcement of settlement of accounts):do not want
Internal autonomy (regarding compulsory regulations, distribution of benefits and authority, etc.) :
Autonomy by Articles of Incorporation ⇒ It can be freely decided by internal regulations.Free distribution of interests and authority
Internal autonomy (institutional design): No restrictions (no regulations on organizational design. Decisions are made by a majority of executive officers)
Public offering of stock:Can not
In the case of real estate investment, from the viewpoint of investor responsibility, it is almost always a joint stock company or limited liability company.
Which one to choose, a corporation or a limited liability company?
Advantages and disadvantages of a corporation
Corporations have high social recognition and can issue shares to raise funds.The disadvantage is that it costs about XNUMX yen because it requires public announcement of financial statements.
Advantages and disadvantages of joint venture companies
Low set-up costs and no need to announce financial results.Depending on the situation, you can change to a joint-stock company later.Disadvantages include low social recognition and the inability to go public, but these tend to be almost no disadvantages in personal-scale real estate investment.
Establishment of Asset Management Company for Real Estate Investment
Incorporation is the establishment of your own asset management company, which can be broadly divided into three patterns.
Management outsourced type
This is a method of entrusting the management of income real estate already owned by the landlord "individual" to an established asset management company.
Income can be easily and stably recorded by an asset management company, but it is said that the management fee is limited to about XNUMX% of the rental income by the tax office.
Sublease type
This is a method in which profitable real estate owned by an individual landlord is rented all at once to an established asset management company, and the asset management company then rents it out to general tenants.Since the risk of vacancies is borne by the asset management company, the sublease fee can be set higher than the management fee of the management consignment type management contract type, and it will be about XNUMX to XNUMX% of the rent income assumed for full occupancy.
Direct holding type
In this method, the asset management company owns the profitable real estate and manages the rental property.All rental income from real estate rental will belong to the company, and capital gains (or capital losses in some cases) when selling real estate will also belong to the company.
Limited liability company can be established at low cost
As mentioned above, there are not many disadvantages of a limited liability company between a stock company and a limited liability company in real estate investment at the individual level.
We will introduce the procedure for establishing a limited liability company.
[3 days to 1 week]
1: Decide on a representative
Confirmation of side job regulations
2: Decide on a company name
3: Make a company seal
Registered seal, bank seal, square seal, horizontal stamp
4: Deposit the capital into the passbook
1 yen ~ OK, depending on the stake
5: Preparation of Articles of Incorporation (A)
Business purpose, officers, accounting period, etc.
6: Preparation of registration application form (B)
Registration application cover page
capital decision
Appointment letter of representative
payment certificate
Copy of capital passbook
Representative seal certificate original
7: Create a seal registration form (C)
8: Save items to be registered to USB (D)
9: Take the seal and (D) to the jurisdictional legal affairs bureau
10: Check for incomplete documents at the consultation desk
If you have a seal, you can correct it on the spot
11: Purchasing revenue stamps worth 6 yen (Electronic application can save money)
12: Paste the stamp on the application form and submit it
[After 7 to XNUMX business days ⇒ Registration completed]
13: Create a seal card application form
create in advance
14: Create a corporate card
15: Issuance of company copy and seal certificate
Summary
Regarding the form of establishment, we have introduced that there are not many disadvantages of a limited liability company between a stock company and a limited liability company.With regard to corporations, the scope of taxation, accounting, etc. will expand and it will be more complicated than investing as an individual. It is a more effective mechanism if
Asset management corporations mainly invest using business loans (property loans). We are also holding a type seminar, so please take advantage of it if you have the opportunity.
At Rich Road Co., Ltd., we will consistently support all aspects of investment real estate, from complete beginners to experienced people, from a wide range of real estate selection, loan consultations, post-purchase management, and renovations.
