I want to incorporate for my second building! What do I need to do?
Good evening♪ I'm Kamoko, and I'll be celebrating my first anniversary as a landlord soon (*/▽＼*)
I am currently working toward purchasing my second income property, and I have a goal to incorporate when I buy the second one♪
Based on my research so far, I think I need to do the following, but I would like to post an article later about how it actually went once I've done it.
Reasons why I want to incorporate for the second building
1. Because all the senior landlords recommend incorporating. Here is what I've heard:
I haven't experienced it myself yet, but there is a limit to the amount of bank loans you can get as an individual, and it seems you hit a ceiling around the third building, so many landlords incorporate at that point. (It seems about 10 times your annual income is the benchmark, though in that case, I wouldn't even be able to buy three buildings lol)
Also, while it's fine when buying real estate, you end up with a huge profit when selling, so it seems better to be incorporated for tax savings.
2. Because I read "Make Your Wife the President Right Now" by Hitoshi Sakashita.
3. A longing to start a company!!
With that, I have a vague dream of incorporating for my second building!
Can I switch the loan to a corporation after the second building purchase is decided?
The first thing I was concerned about was bank loans. Currently, the loan is for an individual, but I wondered if I could switch to a corporate loan once the purchase of the second building is decided.
I asked the bank about this, and they replied that it would be "no problem." Since a newly established corporation has no credit or anything, they said it would be the same because they would look at my personal attributes anyway.
I won't know until I actually try it, but it seems possible.
It seems a Limited Liability Company (Godo Kaisha) is better
Next, I heard that for incorporation, a Limited Liability Company (Godo Kaisha) is better than a Joint-Stock Company (Kabushiki Kaisha), so that is what I want to do.
It seems that the establishment costs for a Limited Liability Company are lower, and
the articles of incorporation for a Limited Liability Company do not require notarization at a notary office.
Then, without hesitation, I'll go with a Limited Liability Company!
Corporate establishment procedures are also online
Where should I handle the corporate establishment?
There seem to be various services out there, but I want to keep costs as low as possible.
It seems there are corporate registration sites that link with Myna Portal, but when I took a peek, it was full of technical jargon and seemed kind of difficult.
I've been reading various people's Note articles about incorporation, and I learned about a site called 'Kaisha Setsuritsu Hitori de Dekiru Mon' (You Can Do It Alone: Company Incorporation). This site summarizes what needs to be done and is very easy to understand♪
And, as expected, it's cheap online!
Among the online services, since I use Money Forward for my tax returns, I'm currently thinking that 'Money Forward Company Incorporation' might be the easiest to use. The price didn't seem to differ much from 'Hitori de Dekiru Mon'.
If I'm going to incorporate, I have to decide on a company name!
I don't even know when I'll incorporate yet, but since I want to take my time thinking about what the company name should be, I feel like I need to start thinking about it early.
I'm thinking I'd like a company name that isn't long, is concise, and doesn't sound strange overseas, so I'm coming up with various candidates, writing them down, and looking at them.
Thinking of a company name that you won't get tired of even after many years have passed is tough!
Preparing corporate seals
It seems corporate seals are also needed. And apparently, you need three types of corporate seals😳 (Well! That's Japan for you!)
It seems you need three: a registered seal, a bank seal, and a square seal.
When I looked it up,
The registered seal is what you register when establishing the company
The bank seal is what you use when opening a corporate bank account
The square seal is like an unofficial seal
That's what I found, so I, Kamoko, am wondering if I really need all three right away. Since it's for real estate acquisition, I don't think there will be many opportunities to stamp seals frequently, but what do you think?
I'm thinking of having my company seals made at my favorite seal manufacturer, but since they cost 15,000 yen each, I feel like an immediate expense of 45,000 yen is painful... (Making them at a cheap place is an option, but💦 if I'm going to the trouble, I want cool ones😎) Plus, there's the fear that if I want to change the company name or something, I'll have to have them remade😱
The lead time for the seals is two weeks, so I'm nervous about not wanting to miss the timing to order them.
Opening a corporate bank account
I haven't looked into this at all, but I'm thinking it would be best to just open a corporate account at the same bank that gave me the loan for the first building.
Corporate business card (credit card)
Furthermore, this might be getting ahead of myself, but once I establish a corporation, I'd like to create a credit card exclusively for corporate expenses to clearly distinguish them from my personal ones.
After looking into it, it seems I can create a corporate card for free with Money Forward, and I'm also interested in a corporate card called UPSIDER.
I read a post saying that UPSIDER is aimed at startups that are likely to grow to a fairly large scale, so it might not be suitable for a small, one-person corporation like mine!? It would be a shame if I applied and got rejected.
In the future, I'd like to aim for a Luxury Card, but since I'm still a long way from that, I want to take it slow.
What will the schedule look like?
Recalling the schedule when I bought the first building...
4/3 Approval of internal proposal
4/9 Real estate contract
5/13 Account opening
5/28 Loan procedures
6/5 Handover
The first building was a very fast pace, but it was handed over about two months after the internal proposal was approved.
Does the contract need to be made as a corporation?
If so, if I register the corporation as soon as I know the internal proposal is approved, order the seal at that time, and have the contract signed about two weeks later, would that barely make it in time?
No, no, corporate seal registration is also required, so three weeks later? I wonder if they would wait that long??
There is one month until the account is opened, so it seems I can at least handle it by then, so it would be good to confirm whether it must be a corporation at the time of the contract! I'll ask a senior landlord next time! ( ´▽｀)
For now, I think the above is about all the steps needed for incorporation.
Are there any others?
If there are, please let me know 😇