Each business has a purpose and many entrepreneurs analyze it while considering how to write the corporate purpose of a company. However, when moving from the approach to writing, doubts arise. There is a difference between the general notion of a purpose (often related to the definition of a brand and the way it attracts its customers) and the legal definition: the specific commercial intention for which the company has been formed.
The latter is what must be taken into account if you know how to write the corporate purpose of a company.
How to write the corporate purpose of a company?
- The selection of one or more of the economic activities authorized by Order of the Minister of Justice and available at the Electronic Headquarters of the Ministry of Justice.
- The written record of their specific codes, with the corresponding description of the National Classification of Economic Activities (CNAE 2009).
- Bearing in mind that, of all the activities recognized as a corporate purpose, only one will be considered as the main activity.
Why is it relevant to know how to write the corporate purpose of a company?
It is important to keep in mind that those who know how to write the corporate purpose of a company do not focus on the present, but also look at tomorrow. For this reason, along with an activity identified as the main one, other accessories are included that make it easier to adapt to the new times without having to carry out a statutory modification.
The reason is that, otherwise, they could encounter complications derivated of:
- The lack of agreement of the Board.
- The need to return to public deed the new agreement, when it is achieved.
- The inconveniences of having to register again in the Commercial Registry.
- An increase in the cost of incorporation, as happens when the registration is too generic and does not allow proper identification.
What other mistakes can be made when defining the corporate purpose of a company?
In addition to not being able to establish a specific corporate purpose, In this part of the process of setting up a company, mistakes can be made such as choosing a social object that is not lawful or not possible.
Another quite common failure is to confuse the corporate purpose of the business with its purpose. A language misunderstanding that equates two concepts that are not interchangeable, since the purpose of the business is the reason why the company has been formed reduced to a single sentence. It can be industry-specific or general enough to include auxiliary and future business activities.
For the avoidance of doubt, it is best to resort to CNAE and look for what activities are more similar to what the company will do. Once the corresponding activity or activities have been identified, collect written evidence in the Statutes of the business.