Does applying for business registration under another person's name also constitute a violation of the Punishment of Tax Evaders Act?

Business registration must necessarily be made in the name of the person who operates the business.

It is illegal to permit, while not actually running a business yourself, another person to make a business registration under your name. If you lend your business registration name, you may suffer great harm.

This is because not only are various taxes related to the business assessed against the person who lent the name, but if the person who borrowed the name cannot pay the taxes, the property of the person who lent the name may be attached and sold at public auction, resulting in great property damage.

In relation to a violation of the Punishment of Tax Evaders Act, under Article 11 of the Punishment of Tax Evaders Act a person who, for the purpose of evading taxes or evading compulsory execution, uses another person's name to make a business registration, or operates a business using a business registration in another person's name, is subject to imprisonment with labor for up to 2 years or a fine of up to 20 million won.

Likewise, not only is the person who borrowed the name punished, but the person who lent the name is also punished where, for the purpose of evading taxes or evading compulsory execution, they used their own name to permit another person to make a business registration, or permitted another person to operate a business using a business registration in their own name.

In this case, the person who lent the name is subject to imprisonment with labor for up to 1 year or a fine of up to 10 million won.

If you are facing a police investigation on a charge of a violation of the Punishment of Tax Evaders Act, we recommend that you necessarily obtain the assistance of a specialized attorney with much experience handling violation-of-the-Punishment-of-Tax-Evaders-Act cases.