Black cash - a relic of post-Soviet times? Cashing out funds is often perceived as a magic wand. But is this really so? Let's figure out what cashing out is, when companies resort to it, what risks it carries and how to avoid this need.
In this article:
What is cashing out?
When Businesses Turn to Cash
Legal alternatives to cashing out
Briefly about the main thing
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What is cashing out?
In the business world, where every colombia phone data step must be thought out and justified, cashing out funds is often perceived as a magic wand.
Cashing out (also known as cashing out) is the process of illegally transferring funds from the current accounts of legal entities or individual entrepreneurs into cash for subsequent use outside of official accounting. Simply put, the money is withdrawn and is not reflected in accounting.
At first glance, this may seem like a simple and convenient solution for covering current expenses or settlements with partners. However, behind this simplicity there are serious pitfalls.
What is cashing out?
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This procedure involves withdrawing funds through front companies or individuals, which allows concealing their true origin and avoiding taxation. This process is a violation of the law and entails serious legal consequences - not only administrative, but also criminal liability.
In some companies, the process is so widespread that double-entry bookkeeping is required.
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When Businesses Turn to Cash
Often, businesses are faced with the need to resort to "cashing out" when using official channels seems too complicated or expensive. Here are some typical cases when companies may turn to cashing out.
Payment of salaries
Paying salaries is one of the most common reasons why companies resort to cashing out. It would seem, why take such risks for the sake of the regular salary of employees?
When a company operates in a grey area, meaning that part of its income is not reflected in the reporting, it has to find ways to pay salaries in a way that remains invisible to tax authorities. One option is to use cash.
Here the scheme looks like this: the company transfers money to the accounts of fictitious companies or individuals, who then cash it. Then this money is transferred to employees in cash. Of course, this approach allows you to significantly reduce tax liabilities, but it also creates a number of risks.
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