If you are a CEO of a startup that will grow into a future unicorn company,
The first tax book you must read!

Knowing taxes makes starting a business easier!
At the critical moment of attracting investment, taxes are the deciding factor!
Startup tax savings techniques covered in one book!

The biggest concern for many startups is raising funds.
Startups need to raise funds to survive and overcome the Valley of Death.
Taxes are also important when attracting investment or securing policy funds or subsidies.
Taxation is not simply a tool for tax savings.
Because taxation has a critical impact on funding, startups must pay close attention to it and manage it systematically.
But taxes are difficult and complicated.
Everyone knows that taxes are important, but they try to avoid them.
Many entrepreneurs want to outsource their tax affairs and leave it to an outside agent, but if you want your startup to succeed, this is an issue you can't ignore.
If you want to survive, you need to get acquainted with taxes now.
This book explains difficult and complex tax issues in an easy-to-understand manner, so anyone can understand them, even without basic knowledge.
Rather than simply explaining tax law theory, it focuses on real-world problems that startups frequently face or struggle with.
This book is helpful to everyone from early-stage startups to those that have successfully attracted investment, as well as aspiring CEOs and accountants preparing to start a business.
Since each company has different characteristics, the appropriate financing method will be different.
If you understand the basics of taxation through this book and then apply it to your company's situation, it will be of great help.

When you say that a CEO needs to know about taxes, you get asked these questions. Of course, a CEO doesn't need to have the expertise to handle tax reporting themselves.
The representative can outsource tax affairs to an external tax accountant or entrust them to an internal accounting staff and receive reports on the progress and results of the work.
At this time, if the representative has tax knowledge, he or she can fully understand the contents reported by the tax accountant or accounting staff and delegate work more efficiently.
Therefore, a certain level of tax knowledge is absolutely necessary.
If the representative does not have tax knowledge, he or she may not understand the contents of the report and may make wrong decisions.
This can lead to unexpected tax risks and additional taxes that don't need to be paid.
Ultimately, the final decision regarding tax matters rests with the representative.
An outside tax accountant or in-house accounting staff can do your tax work for you, but they can't take full responsibility for your business.

--- p.14

Of course, the success or failure of a startup isn't determined by just one factor.
However, financing is paramount in determining the life or death of a startup, and tax management has a decisive impact on financing.
Because well-managed taxes build trust, which is the foundation for financing.
In particular, to attract investment, you must gain investors' trust.
No matter how excellent a business plan or model is, it will be difficult to gain investor trust if financial statements and tax management are poor.
I've seen many startups fail to raise funding due to poor financial statements.
Additionally, tax savings through tax management prevent unnecessary outflow of funds.
Even if you have the same sales and expenses, if you take full advantage of legal tax savings, the actual tax you pay can make a huge difference.
Additionally, poor tax management can lead to situations where unnecessary surtaxes have to be paid.
If taxes are excessive, the already insufficient funds will be depleted even more quickly.
Tax savings through faithful tax management are a way to protect scarce business funds.
If you fail to pay your taxes on time due to lack of funds, you will end up in arrears, which will further diminish the credibility of investors and grant-granting agencies.
Many representatives file for bankruptcy due to unpaid taxes.

--- p.18

Occasionally, some representatives take taxes lightly and say, “I’ll just pay the taxes later if I get caught.”
Moreover, they boast about these thoughts to people around them.
But ultimately, taxes are a matter of corporate trust.
A representative who says such things is lowering his own credibility.
Additionally, tax risks can have a significant impact on a company's brand and image as it grows.
Therefore, it is necessary for the CEO to have the mindset to faithfully comply with tax laws from the beginning of the business.
Meanwhile, you should meet with a professional who can manage your taxes well.
The representative is not a tax expert.
Tax laws are complex and are revised every year.
Therefore, it is essential to consult a tax expert to minimize tax risks.
But there are many tax accountants in our country.
So, which tax accountant should I seek out and hire? Ultimately, I need to find one with a deep understanding of the industry and characteristics of my startup, a highly specialized tax accountant, and someone who can effectively address various tax issues.
We will look into more details later.
--- p.26

When I consult with people preparing to start a business, this is the question I get asked most often.
Among the readers of this book, some are already running startups, while others are preparing to start one.
The first thing to consider when starting a business is whether to start as a sole proprietor or a corporation.
Looking at the startups around me, there are a lot of corporate businesses, but there are also some individual businesses.
So, what are the tax differences between the two forms, and what criteria should you use to choose one? To choose the right form for you, you first need to understand the differences between corporate and individual business owners.
Conceptually, businesses are divided into corporate and individual business entities depending on who is conducting the business.
In the case of a sole proprietorship, the individual is the subject, and in the case of a corporate business, the corporation is the subject.
A corporation creates a separate entity in accordance with the procedures of the Commercial Act and conducts business under the name of the corporation.
Of course, in reality, the person who conducts business is the founder and representative of the corporation, but formally, the representative is an employee of the corporation.
Because the business entities are different, if a sole proprietor changes the business name, the sole proprietor will go out of business, but if a corporate business entity changes its representative, the corporate business entity will remain the same.

--- p.32

There are many differences between corporate and individual business owners.
Therefore, when starting a business, it is necessary to choose a form that is right for you.
If your goal is to run a small business, a sole proprietorship, which is not subject to the Commercial Act, is convenient in terms of establishment and operation.
However, many startups dream of growing their business to a large scale, attracting investment, and then exiting, so if your business goal is investment, the answer is already set.
If you want to receive investment, you must operate as a corporate business.
Of course, there are disadvantages to being a corporate business, but you have to get used to the way it operates.
When operating a corporation, the provisions of the Commercial Act must be strictly observed, and the representative must not use corporate funds for personal purposes.
Therefore, in order to run a corporation without any problems, you should always keep an eye on experts such as lawyers and tax accountants.
However, it is not necessary to start a startup as a corporate entity.
If you want to start small, such as verifying business ideas, developing prototypes, and testing, becoming a sole proprietor is a good option.
This is because sole proprietorships do not require registration and entrepreneurs can make decisions quickly.
And even if you need to register your business quickly, it is better to start as a sole proprietor.
Sometimes, in the startup stage, business registration is needed quickly in order to apply for startup support funds within the deadline.
In this case, the individual business form that does not require establishment registration procedures is advantageous.
You can operate as a sole proprietorship in the early stages of your business and then convert to a corporation when you prepare to attract investment.
The timing and method of converting a sole proprietor to a corporation will be discussed in detail in Chapter 4.

--- p.35~36

To successfully grow a startup, you need to find a good tax accountant.
There's always a competent tax accountant behind every successful startup.
This is because the representative is busy and does not know all aspects of taxation.
That's why there are many tax accountant offices in office districts, and if you just search the Internet, you can find countless tax accountants.
Which tax accountant should I choose? I want to find one who can take good care of my business and help me save taxes, but it's like finding Mr. Kim in Seoul. To choose wisely, I need to meet with at least five tax accountants and receive consultations.
You can visit a tax accountant's office near your company, search the internet for a tax accountant with good reviews, or ask for a recommendation from a local startup representative.
If you get advice from several places like this, your chances of finding the right tax accountant for you will increase.
Finding the right tax accountant can go a long way in helping your business succeed.
So, it is well worth investing time and effort into selling it.
After that, you must select a tax accountant based on three criteria.

--- p.37

It should not be confused with the practice of taxation and other professionals.
Running a startup will require legal services in a variety of fields, so it's advisable to hire experts in those fields.
Corporate registration, articles of incorporation, various contractual matters, general shareholders' meetings, etc. are the domain of lawyers or legal scriveners, while patents, trademarks, and design rights are the domain of patent attorneys.
A labor attorney is a labor law expert who handles all labor issues.
Calculating salaries and reporting the four major insurances are also the duties of labor attorneys, but they overlap with the duties of tax accountants.
However, matters related to the interpretation and application of labor laws, such as drafting employment contracts, dismissal, and disciplinary action, are unique areas of work that only labor attorneys can handle.
Early-stage startups may lack opportunities to meet experts from diverse fields.
Therefore, people often consult tax accountants about general legal matters, such as labor issues and shareholder issues.
While you could certainly get answers from a tax accountant, you should consult with an expert in the field to avoid various legal risks.
So how can you get 200% of the benefits of a tax accountant while paying the same fee?
--- p.43

The income of a representative running a private business is subject to income tax as it is considered business income among the listed incomes.
Therefore, it is necessary to understand the income tax method.
Also, the representative who runs the corporation needs to understand income tax.
This is because income tax is applied when income is paid from a corporation to an individual.
When a corporation hires employees, it must pay them earned income, and when it commissions services from external experts, it must pay them business income or other income.
Since the representative is also an employee of the corporation, he or she receives employment income when he or she receives a salary.
Additionally, if you own shares and receive dividends, you will receive dividend income.
Therefore, even though it is a corporation, it is necessary to understand individual income tax in order to run a business.
Among the eight types of income listed in the income tax, six types of income, namely interest, dividends, business, employment, pension, and other income, are considered comprehensive income and must be combined to calculate tax.

--- p.53

For early-stage startups, where funding is scarce, figuring out how to reduce taxes becomes even more important.
But there is no royal road to success.
If you resort to excessive tax evasion or illegal practices to reduce your taxes, you will increase your tax risk and incur greater losses.
We must try to understand and reduce taxes as much as possible within the framework of tax laws.
Although tax laws may seem difficult and complicated, their essence is clear, so understanding the essence of tax saving is a priority.
The taxes paid by businesses are corporate tax, income tax, and value-added tax. Corporate tax and income tax are taxes levied on income generated, while value-added tax is a tax levied on added value created at the transaction stage.
Therefore, the tax calculation structures for income tax and value-added tax are different.
To understand the nature of tax savings, it is best to look at corporate tax savings, income tax savings, and value-added tax savings separately.
First, let's look at the essence of corporate tax and income tax savings.
As we saw in the previous chapter, the calculation structures for corporate tax and income tax are similar.
Therefore, corporate tax and income tax have similar tax saving principles.

--- p.60

Newly established businesses often ask this question.
Some CEOs are issued corporate cards and use them carelessly, while others are cautious about using them for fear of causing trouble.
As we have seen from the nature of tax saving, in order to save on taxes, there must be a lot of expenses recognized by tax law.
Looking at the corporate tax calculation structure, taxes are levied on income, which is a concept under tax law, after tax adjustments are made to the net income for the accounting period.
Therefore, if accounting expenses are high, net income and income will decrease and taxes will be reduced.
But it's foolish to spend unnecessary money to reduce taxes.
If you incur expenses necessary for business, they should be properly recognized.
So, what does it mean for expenses to be recognized under tax law? This means that accounting expenses cannot be denied through tax adjustments.
Tax adjustment is the process of adjusting whether accounting expenses are recognized as expenses under tax law.

--- p.64

Among the ways to legally reduce corporate and income tax, the most significant tax savings are through tax deductions and tax reductions.
The tax law provides various tax support systems for policy purposes.
For example, various tax incentives are provided to encourage startups in specific industries, job creation, and balanced development between the metropolitan area and local regions.
Even startup owners should check to see what tax incentives are available.
Depending on whether you know about tax assistance programs or not, the amount of tax you have to pay can vary significantly.
These tax deduction and tax reduction regulations may change annually depending on policy objectives.
Benefits may be enhanced or eliminated, so you should check the regulations annually.
If you take advantage of tax deductions and tax reductions, you may be able to receive a 100% tax reduction in some cases.
This is a very useful system, especially for startups that are short on funds.
However, the requirements for receiving the benefit can be strict, and if you apply the tax deduction incorrectly, you may be subject to a large additional tax penalty later.
Therefore, when applying actual tax deductions or tax reductions, you must consult with an expert.

--- p.71

According to the Ministry of SMEs and Startups, the average number of new entrepreneurs in Korea each year is 1.3 million.
Starting a business can be a means of self-realization for entrepreneurs, but it also has a significant positive impact on the economy, such as creating new jobs and revitalizing the local economy.
To encourage such startups, there is a system that provides tax benefits to startups.
This is the tax reduction system for small and medium-sized businesses.
If you apply for this system, you can receive a reduction of corporate tax and income tax from 50% to 100% for 5 years.
This is a huge benefit as you can avoid paying any taxes for up to five years.
Therefore, if you are a startup representative, you should know this system.
If you know in advance before starting a business, you can prepare to receive the most advantageous tax benefits.
This system provides tax benefits for a total of five years, starting from the time you first start your business, not from the time you start your business.
Initial income refers to profit, not sales.
Therefore, if there is a loss after deducting expenses from sales, it is not included in the 5-year period, but is 5 years from the year in which profit was generated.
Startups often experience losses in the early stages of their business.
However, the tax law does not wait indefinitely until a profit is made.
Even if there is no income for 5 years after starting a business, the deduction will be applied unconditionally starting from the next 5 years, and you will receive the benefit for 5 years.

--- p.79

Business expansion is not considered a start-up.
Therefore, adding a business type after starting a business does not qualify as starting a business and therefore does not receive tax reduction benefits.
Conversion of a sole proprietorship to a corporation is not considered a business start-up.
If you are receiving a tax deduction for starting a business as an individual business owner and then convert to a corporation, you will not receive the tax deduction for the remaining period.
However, if a company is converted into a corporation by meeting the specific requirements of Article 32 of the Special Tax Exceptions and Limitations Act, it may receive corporate tax reduction for the remaining period.
As such, the discount rate varies depending on the founder's age and the region where the business is established.
If a person other than a young person starts a business within the metropolitan area's over-congested area, he or she will not receive tax reduction benefits.
It's sad that you're old and can't receive tax breaks, but there is a way.
If you are certified as a venture business within 3 years of founding, you can receive a 50% tax reduction for 5 years.
It is independent of the founder's age or the region where the business was founded.
This is also a type of tax reduction for small and medium-sized businesses, so it is only applicable when starting a business in an industry eligible for reduction listed in the tax law.
Meanwhile, venture certification has a validity period.
To continue receiving the startup tax deduction for 5 years, you must renew it before the expiration date.
Please note that if your venture certification is canceled or expires, tax reductions will not be applied from that year onwards.

--- p.84

Startups often experience losses in the early stages of their business.
It is always difficult to cover operating expenses such as employee salaries with corporate capital.
So, the CEO doesn't even think about taking his own salary.
The reality is that CEOs don't receive a salary until they generate a certain amount of sales or receive investment.
Registered executives, such as representatives, are not subject to the Labor Standards Act.
Therefore, there is no problem under labor law even if you do not receive salary or work overtime.
Representatives are only required to subscribe to the National Pension and Health Insurance among the four major insurances.
If the representative does not receive a salary, he or she can report to the insurance company as unpaid and not have to pay insurance premiums.
However, if you file an unpaid report, your health insurance will change to that of someone else's dependent or local subscriber.
Local health insurance subscribers may be at a disadvantage because insurance premiums are assessed based on assets owned.
If the representative has a family to support and needs to sign up for health insurance, it is recommended that he or she report his or her salary as the minimum national pension income and become a health insurance employee.
If you report your representative salary, you will be enrolled in both the National Pension and Health Insurance, and since the minimum monthly salary for Health Insurance is lower than that for the National Pension, it is a way to avoid losses by following the National Pension standard.
As of 2025, the minimum national pension income is 400,000 won per month.
If you run a business this tight and make sales, you can take the CEO salary.
You may receive a regular salary, but you may also receive bonuses based on performance on an irregular basis.

--- p.90~p91

If shares are distributed to family members in the early stages of a corporation, the family members who own the shares can also receive dividends on a regular basis.
Since separate taxation is applied to each person, you can receive a slightly higher dividend than if you received it alone, and only receive 15.4%.
Additionally, if your children own shares, you can naturally transfer wealth at a lower tax rate over the long term.
Therefore, from a tax-saving perspective alone, it is advantageous to diversify your holdings in advance.
But if you have shares, you also have voting rights.
Therefore, investors may not like it when the shares are dispersed, as it may hinder stable business operations.
The stakes must be designed taking these various aspects into account.
One of the most common misconceptions among corporate representatives is that receiving dividends will save them on corporate tax.
However, dividends are a capital transaction, not a profit and loss transaction.
This is funded by after-tax surplus.
Since the remaining surplus after the settlement is disposed of as dividends, the corporation's profits do not decrease due to dividends, and corporate tax does not decrease either.
Then, you might think that if a corporation earns money and pays corporate tax and shareholders receive dividends and pay income tax, isn't this double taxation?
Double taxation is true.
Therefore, the current tax law provides a separate device to adjust double taxation.
The dividend tax deduction is applied to individual shareholders, and the dividend income non-deduction rule is applied to corporate shareholders.

--- p.94

I think one of the things startups are most interested in is attracting investment.
For startups to successfully attract investment, they first need to understand investors.
Why do investors invest in startups? What do they look for? And what do they expect from startups? For a startup to grow successfully, attracting investment isn't a one-time thing.
Statistics show that unicorn companies receive an average of 3 to 6 rounds of investment.
As a CEO responsible for the life and death of a startup, you need to understand the essence of investment from the perspective of an investor.
Why do investors invest in startups? Ultimately, it's to make money.
It's not about being a winged angel and doing charity.
Investors also invest with the expectation of an exit within a certain period of time.
The expectation is that when follow-up investments are made, the stakes held will be sold, or the invested company will make money through M&A or going public.

--- p.107

Startups and investors should have a win-win relationship where both parties achieve their goals.
Startups want to grow their companies based on investment funds, and investors want to get back much more money than they invested.
Sometimes investors are appointed as executives and interfere in management.
Receiving investment in this way may place restrictions on startups' independent business operations.
Even though we are in the same boat, there will be many times when we have different opinions while running a business.
A CEO may make decisions with a longer-term perspective, and may have a vision for the company that he or she wants to maintain even if it means incurring immediate losses.
However, for investors, it will be most important to exit within a certain period of time.
While it is necessary to coordinate differences of opinion, the relevant matters should be clearly stated in advance in the investment contract.
From a startup's perspective, it's important to choose investors who can help the company grow well, rather than focusing solely on the money when making investment decisions.
Ultimately, startups and investors need to build a strategic partnership that fits.
Investors will likely seek an exit through M&A or IPO.
It's also a good idea to present this exit plan when attracting investment. VCs also raise funds from LPs, form funds, and invest, but these funds often don't have long maturities.
It is usually around 5 to 7 years, so you need to exit within that time.
If a startup seeking investment makes its exit plan too long on its IR deck, it will end up making its product less attractive to investors.
It is best to plan for an exit within three years if possible.

--- p.109

Whether a company that has grown rapidly can survive is another matter.
Even looking at the past Timon and WeMakePrice incidents, if you focus too much on increasing your appearance, you could end up facing a crisis of bankruptcy at some point.
As a company's accumulated losses grow, it quickly exhausts its investment capital and must continuously receive follow-up investments or improve its financial structure to survive.
If you can't overcome the situation, you won't last long.
Ultimately, both metrics need to be managed well, but priorities may vary depending on your strategy.
The numbers that investors focus on most are sales and profits.
However, this does not mean that these numbers should be manipulated in accounting to attract good investments.
Manipulating accounting books to make accounting figures look better than they actually are is called fraudulent accounting.
One of the most important things investors pay attention to in a startup's financial statements is whether there was any fraud.
Investors use financial statement numbers to evaluate a company's value, and if the numbers are inflated, they will value it higher than it actually is.

--- p.116

If your startup is preparing to attract investment, there are many things to consider when negotiating investment.
Startups often have no experience in attracting investment, or if they do, it is limited to only 1 to 3 times.
But investors are people who make a living from investing.
Negotiating with someone who has experience with dozens or even hundreds of investments puts a startup at a significant disadvantage.
Therefore, it is necessary to know a lot about investing.
Investors will want to secure as much equity as possible and draft investment contracts that are favorable to them.
But startups shouldn't be dragged around all the time.
You must prepare thoroughly in advance to negotiate in your favor.
In relationships with investors, it is likely that you will be the weaker party due to the logic of power, but the art of negotiation is to give what you have to give and get what you can get.
How much investment you receive is directly related to how much equity you give away.
Receiving a lot of investment money is not necessarily a good thing.
Investors will want to value the company and invest in it to get a stake.
So, receiving investment money is ultimately a question of how much equity to give away.

--- p.124

Are there financial statements that are advantageous for attracting investment? Yes.
Investors don't invest money based on instinct or feeling.
It is about making rational decisions based on verified data.
The largest portion of that data is the financial statements.
Corporate valuation is also calculated based on financial statements.
Therefore, startups must manage their financial statements well to attract investment.
Financial statements are a set of documents that show a company's financial status or management performance.
These financial statements include the balance sheet, income statement, statement of cash flows, statement of changes in equity, and notes.
There are so many different types that it can be confusing, but don't worry.
For early-stage startups that don't undergo external audits, simply maintaining a balance sheet and income statement is sufficient.
Financial statements are often called the face of a company, as external stakeholders use them to judge a company.
The same goes for investors.
So, let's take a look at the six things investors most often check in financial statements.

--- p.129

Startups must understand the concept of capital erosion.
In the early stages of starting a startup, losses often occur.
It usually takes several years to develop a product or service, launch it, and start generating profits.
How well you survive this period of death valley can determine whether or not you can succeed as a startup.
One thing to be careful about from an accounting perspective during this period is capital erosion.
Literally, it means that capital has been eroded, and it is a phenomenon in which a company's original equity capital decreases due to deficit.
Capital is largely composed of capital stock, capital surplus, and retained earnings.
When a loss occurs, a deficit is recorded in the balance sheet rather than retained earnings.
Deficits are recorded in the balance sheet as a deduction from capital, i.e. as a minus.
Therefore, as deficits accumulate, capital is eroded.
Depending on the degree of capital erosion, it is divided into partial capital erosion and complete capital erosion.
If there is complete capital impairment, the total capital on the balance sheet becomes negative.
This occurs when accumulated losses are large or capital is small.
Partial capital erosion is a situation where the total capital is not negative, but losses eat away at the capital stock.

--- p.138

Startups can leverage tax incentives to attract investors.
The starting point for utilizing this system is to obtain venture company certification.
If you receive venture certification, you will receive many additional tax benefits in addition to the venture investment income deduction.
The most representative benefit is tax reduction for small and medium-sized businesses.
Please refer to the detailed explanation of tax reductions for startups and small and medium-sized enterprises above.
Additionally, you can receive benefits such as reduced acquisition tax and property tax when acquiring real estate, and tax exemption on venture company stock options.
We will look at the tax benefits of stock options later.

--- p.142

Startups can be divided into Series A, B, C, D, E, and F according to the order in which they receive investment.
They also receive small angel investments before Series A, which are called seed investments or pre-Series A investments.
Startups may continue to attract investments from D to F after Series C, but some may exit through M&A or prepare for an IPO before that.
However, even if investment is attracted in this way, the sustainability of the company is not guaranteed.
There are many cases where businesses are turned away from the market and withdraw before attracting follow-up investment.
The startup growth stages can be mapped to the investment stages.
In the early stages, seed investment is received, and once the product is launched and proven to some extent in the market, Series A investment is received.
After Series A investment, a follow-up investment, Series B investment, is received for the first scale-up, and then Series C investment is received for a larger second scale-up.

--- p.149

Investments are generally made through equity transfers or capital increases.
Therefore, if you have been running your business as a sole proprietor, you need to change to a corporate business.
This is called corporate conversion.
As we saw in Chapter 1, there are differences between individual business owners and corporate business owners.
In the early stages of your business, you may choose to become a sole proprietor, depending on your needs. However, if you are preparing to attract investment, you must convert to a corporation.
There are several ways to convert to a corporation.
If a self-employed person owns real estate such as land, buildings, or factories, he or she can use the tax-reduced comprehensive transfer or in-kind contribution method under the Special Tax Exceptions and Limitations Act to receive transfer tax deferral or acquisition tax reduction benefits.
If you are a self-employed person who does not own real estate, you can use the general comprehensive transfer method.
The general comprehensive transfer method involves the process of transferring all assets and liabilities held by a sole proprietor to the corporation after establishing a corporation.
Since most startups do not own real estate, they can proceed with a general blanket acquisition method.

--- p.153

When a startup receives Series A funding, it is its first significant investment.
The CEO, who has always been worried about lack of funds, will be able to breathe a sigh of relief.
Now, to fully expand the business, we will be hiring additional employees and increasing the marketing budget. However, the most important thing to keep in mind is internal financial management.
The money invested is depleted faster than expected.
Therefore, financial management through cash flow management and internal cost monitoring is essential.
In the early stages of a startup, the CEO handled everything on his own, but it is inefficient to handle everything alone even after receiving investment.
Therefore, accounting and financial management need to be left to the accountant.
However, if you hire a lot of accounting team members, the burden of labor costs will be quite large.
So, let's find out when it's a good idea to start forming an internal accounting team and how to do it.

--- p.163

Startups that grow in size sometimes face tax audits.
If you've raised investment at the level of Series C, it means your company has grown considerably in size.
Then, you should also prepare for tax audits in advance.
This is not a problem that can be solved by temporarily escaping abroad.
A tax audit is a process by which the tax authority verifies whether taxes have been legally reported and paid.
Potential tax risks from tax audits can turn into tax bombs.
If several years' worth of taxes are collected at once, even a successful business can suddenly become difficult.
Not only can a tax bomb cause financial difficulties, but it can also tarnish a company's and brand image in an instant.
If an article about a tax audit comes out, it will be an even bigger blow.
It takes a lot of effort and time to restore a tarnished image like this.
Therefore, it is necessary to understand tax audits and learn how to prepare for them.
Tax investigations can be broadly divided into general tax investigations and tax violation investigations.
A general tax audit investigates the appropriateness of tax reporting, while a tax violation investigation investigates tax violations.

--- p.175

First, you need to create a table showing your monthly sales and expenses.
It is also possible to predict future cash inflows and outflows based on past monthly income statements and actual cash inflows and outflows.
Additionally, projected scenarios and company-specific conditions must be established to forecast future sales and costs.
For example, to accurately predict future cash flow, you must set specific conditions for your company, such as a 5% or greater increase in monthly sales or the hiring of an additional employee for operational purposes once sales exceed 500 million won. Based on the sales amount and growth scenarios on the income statement, you can estimate future sales.
Additionally, even if sales occur, cash may not be deposited immediately.
When accounts receivable are converted to cash may vary depending on the type of business and the customer.
If the sales period and cash inflow period differ by about one month on average, adjust the cash flow management statement to reflect cash inflow one month later.
Additionally, since accounts receivable may not be fully recovered, the cash inflow amount can be adjusted by applying the average bad debt ratio.

--- p.200

When attracting investment, it is necessary to consider protecting the representative shareholding ratio.
When you attract investment, the investor usually takes a stake.
While a corporation's representative may want to see an influx of funds through investments from the perspective of running a business, he or she may not be so happy about having his or her stake diluted from the perspective of a shareholder.
Owning stocks means owning voting rights.
Of course, non-voting preferred stocks can be issued to investors, but if preferred stocks are convertible into common stocks, the CEO may not be able to secure independent management rights.
Securing that share is very important.
The Commercial Act requires that important decisions of a corporation be made through a general shareholders' meeting and board of directors meeting.
In addition, it was divided into ordinary resolution matters and special resolution matters, and decisions were made based on the number of voting rights held by shareholders.

--- p.211

If you are in the preparation stage for starting a business, it is recommended to apply for the preliminary startup package hosted by the Ministry of SMEs and Startups and receive funding to get started.
The Pre-Startup Package provides an average of 50 million won in startup funds to prospective entrepreneurs with innovative technologies and business models.
To apply for the pre-startup package, you must not have registered as a business as of the business announcement date.
Therefore, if you are preparing to apply for a preliminary startup package, it is better not to register a business first.
To be selected for this project, you must prepare a well-prepared business plan, including development plans, capabilities, and growth strategies.
Upon submission of business plans, patents, awards, and other necessary documents, applicants will be selected through document and presentation evaluations.
If you are selected for the preliminary startup package, you will register your business and receive business funds for prototype production, marketing expenses, and labor costs.
Business funding is provided in two stages.
Stage 1 is business preparation funding, and additional Stage 2 funding is provided based on an evaluation of the progress of the business plan.
Additionally, various entrepreneurship programs such as mentoring are provided.
Typically, government subsidies usually involve a certain percentage of self-payment, but the advantage of the pre-startup package is that, unlike other government subsidies, there is no self-payment.
There is no age limit for applying for the preparatory startup package, but if the founder is in default on personal debt or has unpaid national or local taxes, support is not available.

--- p.219

This is a question startup CEOs frequently ask.
After all, the largest portion of expenses is labor costs.
For startups operating in technology-intensive industries, the proportion of labor costs is even greater.
A large part of startups' lack of funds stems from personnel expenses.
Hiring employees involves a lot of expenses, including not only salary but also the four major insurances, retirement pay, and various welfare benefits.
Even if you carefully plan and manage your finances and hiring, personnel expenses are always a burden.
It will also not be easy to reduce staffing to grow the business.
At the national level, our country is encouraging employment by providing various benefits to companies to solve the unemployment problem.
Startups with limited funds need to make the most of these benefits.
These benefits include incentives and subsidies to companies to promote employment and stabilize employment, as well as tax reduction systems such as employment growth tax credits.

--- p.231

Many startup CEOs worry about this.
As we saw above, startups that hire workers benefit from a variety of employment support programs.
However, even with employment incentives, there are cases where hiring is difficult.
To attract top talent, you need to offer competitive salaries, but startups are always short on funds.
However, how well you can build a team is sometimes directly linked to attracting startup investment.
However, it is not possible to offer an unreasonable salary in order to build a good team.
A useful method at this time is to utilize stock grants and stock options.
Let's learn how to utilize stock grants and stock options and what tax benefits they offer.

--- p.238