Businessmen often mistakenly believe that the main thing for running a business is having capital and a business idea. "Unfortunately, even with a great idea and the means to implement it, many go bankrupt in the first few months," says a lawyer from the law firm Alva Privacy, which provides subscription legal services to businesses in Kyiv https://alvaprivacy.ua/ua/poslugi/business/yuridichnij-suprovid.
Mistakes at the Start of Running a Business
What are the main mistakes? Let's figure it out:
Unsuccessful choice of business form. A businessman has two main options: register as a legal entity or register as a sole proprietor. Each option in Ukraine has advantages and disadvantages. An incorrect choice without considering the specifics of the business can lead to negative consequences.
Incorrect drafting of constituent documents and determination of the type of activity. What could be easier than downloading a standard charter from the Internet and changing something in it? That's the problem: after adjustments, errors and inaccuracies appear here and there, leading to refusal of registration. In addition, incorrect determination of the type of activity can become grounds for claims by the fiscal service based on receiving income from an unspecified activity.
Running a business without a license. Not all businessmen remember that some types of activities require a mandatory license, for example, mediation in employment abroad. Naturally, before even starting work, the businessman will be fined a large amount.
Inattention to document flow. No matter how boundless the trust in counterparties, relations with them must still be documented. And not even because one fine day the counterparty may simply fail to fulfill its obligations, but because any payments received from it without proper documentation may be deemed illegal. If you have not documented the receipt of money, then it is NOT your money.
Unofficial or improperly documented employees. A fine of 125,000 UAH – that says it all. Such sanctions can ruin any novice businessman who decides to use hired labor without proper registration. Moreover, it often does not matter whether the employee always works in the office without registration or is some freelancer who comes and goes and with whom no contract has been drawn up.
These, as well as many other mistakes, can lead to the collapse of the best business ideas backed by large capital. Therefore, an important part of doing business in Ukraine is professional, comprehensive, and timely legal support for business.
Based on materials: law firm ALVA PRIVACY, Kyiv.
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