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I was talking to an "entrepreneur" the other day, and he mentioned something about his corporate structure.
He wanted to have one of his companies contract labor to another one of his companies, which itself rents its premises from another of his companies, which holds property. As far as I could tell they were all incorporated in the same city.
What's the logic of separating them like this?
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>>1400500
Maybe he enjoys paying a fuckload of taxes.
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>>1400504
What if they were incorporated in a tax haven, but operated entirely outside it?
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>>1400500
Protection.
If one asset goes bust he still has the others. He can also funnel money from the best of the three to the rest by charging them insane rates for the services they provide to each other and take tax breaks on it.
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>>1400500
Spreading your assets over several corporations -> can only lose part of your assets from a lawsuit.
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>>1400619
Would your average small business lawsuit be against the management, the employees, or the property owner? Or would it default to the management?
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Bump. I get the concept of liability limitation, but why divide a single branch three ways?
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