Does applying for business registration under another person's name violate the Punishment of Tax Offenses Act?

Business registration must be made under the name of the person actually conducting the business.

It is illegal to allow another person to register a business under your name when you are not actually conducting business yourself. Lending your business registration name can result in significant damages.

This is because various taxes related to the business are notified to the person who lent the name, and if the person who borrowed the name fails to pay taxes, the property of the person who lent the name may be seized and auctioned, causing significant property damage.

Regarding violation of the Punishment of Tax Offenses Act, according to Article 11 of the Punishment of Tax Offenses Act, a person who registers a business using another person's name or operates a business using another person's business registration for the purpose of avoiding taxes or evading enforcement may be punished by imprisonment of up to 2 years or a fine of up to 20 million won.

In this way, not only the person who borrowed the name but also the person who lent the name will be punished if they allowed another person to register a business using their name or allowed another person to operate a business using their business registration for the purpose of avoiding taxes or evading enforcement.

In such cases, the person who lent the name may be punished by imprisonment of up to 1 year or a fine of up to 10 million won.

If you are facing a police investigation on charges of violation of the Punishment of Tax Offenses Act, please be sure to seek the assistance of a specialist attorney with extensive experience handling violation of the Punishment of Tax Offenses Act cases.