Starting a Business

How to Rank (Doing Business Methodology) in starting a business

In this business start It consists of 4 sub-components: Process, Time, Cost, and Paid-in Minimum Capital for small businesses. To medium size used to start and include formal business operations in the largest business cities in each economic zone. To make the data comparable across all 190 economies, only locally owned businesses were used. and has an initial capital equal to 10 times the per capita income. In addition, the business must be involved in general industrial or commercial activities and have between 10 and 50 local employees one month after inception. Gone Scoring will consider a limited company. Two types of local that are identical in all aspects. Except that one company is owned by 5 married women and the other is owned by 5 married men.

in the rating The World Bank records all the procedures it takes to formally start a business and run an industrial or commercial business as well as the timing. The cost of completing these steps and the minimum capital to start the business is paid. as the following figure These steps will include the processes an operator must take upon approval of a license and all necessary audit notices for the company and its employees with the relevant authorities.

 

Case study hypothesis

So that the data can be compared in many economic zones around the world. It is therefore necessary to formulate several assumptions about the business and its processes. It is divided into 2 parts: business and the business owner It is also assumed that all information obtained has nothing to do with conflicts of interest or bribery.

Business

1. Is a limited company or legal equivalent If there is more than one type of limited company The type with the highest volume will be counted primarily. Based on information from the most common forms from company attorneys. or a document from the Statistical Office
2. Startup data is drawn from the largest business cities in an economic region, with the exception of the 11 economies that use the second largest business city data.
3. The type of business used for information must be general industrial or commercial activities such as the production or sale of general goods and services. The businesses that cannot be used for information are those that engage in foreign trade activities and are not subject to special taxation systems such as liquor or tobacco, and include highly polluting production activities.
4. Are not eligible for any investment incentives or special benefits.
5. The owner is 100% local.
6. There are five business owners. where no one is a juristic person One business owner owns 30% of the company, two owners each own 20% and two owners 15% each.
7. Must be managed by a local director level up.
8. There are between 10 and 50 employees within one month of initiation, all of which must be local.
9. Have an initial capital of 10 times the income per capita
10. Have an estimated turnover of at least 100 times the per capita income.
11. The business itself must be a building or office rental. provided that the owner must not be the owner of the said property
12. There is an annual lease of office space equal to per capita income.
13. It has approximately 929 square meters (10,000 square feet) of office space.
14. The title deed of the company is 10 pages long.

Owners

1. Must be of legal age and able to make decisions as an adult If there is no legal age shall be deemed to be 30 years old
2. Are normal physically and mentally, in good health, and have no criminal record
3. If married Married couples are counted as sole business owners.
4. Where the answer to the question varies with the legal system that applies to women or men. (as in the case of a legally diverse economy) The answer used will be the one that applies to the majority of the population.

Procedure (Number of steps)

In this section, it is defined as the interaction between the founder of the company and outsiders. (eg government agencies auditor attorney or notarization officer) or spouse (if required by law). or company officials and employees will not count as a step

Procedures to be performed in the same building But being in different offices or at different counters will be counted as separate steps. If the founder has to visit the same office multiple times for different sequential steps Each step is counted separately. The founders have to go through all the steps on their own with no middlemen. facilitator accountant or attorney, unless such third party use is subject to law or is requested by most operators. If the services of a specialist are required, procedures are performed by such specialists on behalf of the Company. will be counted as a separate step

Each electronic step counts as a separate step. A spouse's approval to own the business or leave home is a procedure if required by law, or without such approval the spouse suffers legal consequences, such as the loss of financial maintenance rights. For obtaining eligibility determined by only one gender to register a company. Processing or obtaining the necessary additional documents is one step and for the identity card is an additional step. And in this case, only the steps required for one spouse are counted. It does not count any other steps before and after incorporation that are formally required or commonly done in practice. In order for the operator to run the official business will be recorded.

It also includes the steps necessary for any formal dealings or transactions with public authorities. For example, if a company seal is required or stamps on official documents such as tax declaration, receiving stamps or stamps are also counted as steps. Similarly, if a company is required to open a bank account in order to proceed with further steps such as VAT registration or providing proof of minimum deposit. This transaction is also included in the procedure. The reduction in steps is counted only if it meets four criteria: legal, available to the general public, Most companies use, and to avoid delays

This step count only counts the steps that are required for the entire business. This does not include industry-specific procedures. for example Environmental Compliance Procedures It is only included when it applies to all businesses that conduct general commercial or industrial activities. The steps the company takes to connect to electricity, water, gas and waste disposal services are not included in the business metrics.

Time (Duration counted as days)

Time is recorded on calendar days. This measure captures the average amount of time that an incorporation of a lawyer or certifier indicates it is practically necessary to complete a procedure, with minimum follow-up with government agencies and no payout. informally It is stipulated that the minimum time required for each step is one day. Except for the steps that can be done completely online where the minimum time required is recorded in half a day. The registration process is deemed to be completed once the company receives the incorporation documents or is able to officially start its business. In addition, if the process can be expedited legally at an additional cost. The fastest step is chosen if that option has a greater impact on the economy's score.

In respect of a spouse's approval, this will be deemed permitted at no additional cost unless a certificate of approval is required. Additionally, the time it takes the operator to prepare the information to fill out the form is not counted in this section. It is assumed that the operator is aware of all entry requirements and their order from the start.

Cost (The cost required to complete each step. as a percentage of per capita income)

Expenses are recorded as a percentage of the economy's income per capita. This includes all official fees and charges for legal or professional services if such services are required by law or commonly used in practice. Fees for the purchase and issuance of company books are also included in this section if these transactions are legal. Although VAT registration can be counted as a separate procedure. But VAT does not count as part of the cost in this section.

company law Specific trade codes and regulations and fee schedules are used as a source of cost calculations. In the absence of a fee schedule, government official estimates are used as the official source of information. But in the absence of government official estimates, estimates are made by consolidation experts. And if multiple mergers and acquisitions experts give different estimates, the reported median is used instead. However, the expenses in this section do not include bribes in all cases.

Paid-in minimum capital (Minimum Paid Capital to Start a Business)

The minimum paid-up capital requirement is the amount that the entrepreneur must deposit in the bank or with a third party (eg a lawyer) prior to registration or up to three months after incorporation and will be recorded as a percentage of the income of the entrepreneur. per capita economy The amount is generally stated in the commercial code or by company law. The legal requirements must be endorsed, enforced and fully applied. All other legal restrictions on the Company's operations or decisions related to the payment of minimum capital will be recorded. In case of specifying the legal minimum share capital per share, multiply by the number of shareholders who own the company.

In many economic zones, minimum capital is required. but allows the business to pay only part of the amount prior to incorporation, with the remainder to be paid after the year of initiation. For example, in El Salvador in May 2019 the minimum funding requirement is $2,000, 5% must be paid prior to registration. Therefore, the minimum paid-up capital recorded for El Salvador is $100 or 2.6% of per capita income.

Reforms

The Startup Metrics track changes related to the ease of integration and operation of a limited company annually, depending on the impact on the change data. Some are considered reforms and listed in the Business Reform Summary to document the implementation of significant changes. The reforms are divided into two types: those that make it easier to do business. and changes that make doing business more difficult. A business startup uses a single set of metrics to accept reform.

The effect of the data change is assessed based on the absolute change in the total score of the set of indicators. including changes in relative score gaps Any update of data leading to a change of 0.5 points or more in the score and 2% or more in the relative score gap is a reform except when the change is the result of automatic indexation of official fees as price index or wages For example, if a new one-stop shop operation for a company registration It reduces the time and procedure in such a way that the score increases by 0.5 points or more and the overall gap decreases by 2% or more changes. would be considered a reform Minor fee improvements or other minor changes in metrics that have an overall impact of less than 0.5 points per total score or 2% of the gap are not improvements to some degree. But the information will be updated accordingly.