What are the problems with royalties
Concession business involves franchise transferors and transferees. The transferor generally provides the transferee with the right to use trademarks, trade names, etc., imparts proprietary technology, and provides equipment and special raw materials necessary for operation. The transferee needs to pay a certain proportion of operating income or other calculation methods after opening. Assignor's royalties. If the transferor fails to account for the royalties received, financial and tax fraud can result.
Royalties refer to payments for the use of patents, trademarks, copyrights or similar proprietary rights owned by other economic units. It is a payment as property income, not a payment for commodity operations. Expenses incurred for the use of proprietary assets of other units can only be covered by property income derived from the use of such assets. However, the expenses incurred in the manufacture of patented products, the use of patented methods or trademarks include technical or management services, and therefore should be registered as production expenses of the product. The use of exclusive rights is subject to restrictions. Enterprises must use these economic rights within the scope permitted by the exclusive right holder. If the scope and time limit are exceeded, the user will be punished.
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