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The board of directors and officers have a fiduciary duty to do what is in the best interest of the company and shareholders. If the choice is to invest our ext

by hop 16y ago

The board of directors and officers have a fiduciary duty to do what is in the best interest of the company and shareholders. If the choice is to invest our extra cash thru a CA based corp, pay more tax, have a lower return and ultimately less $ to reinvest in the company, or, to set up in the neighboring state so don't lose money, and its perfectly legal, the choice is easy. I think a better question is why have CA voters voted in so much spending and extra taxes, putting them at disadvantage to other states. Nevada actively encourages companies and individuals to come set up shop there. Capital gains tax by state - http://www.thereibrain.com/realestate-blog/2007/10/capital-gains-tax-rates-state-by-state/ http://www.thereibrain.com/realestate-blog/2007/10/capital-g...

_delirium 16y ago
You assert the opposite of my claim, but do you have any evidence? "Fiduciary duty" is an actual legal term; there are some actions or non-actions which violate a corporate officer's fiduciary duty, and some which don't. Failure to set up a tax shelter, even when it would be possible to do so and it would save the company money, is not a breach of fiduciary duty. I'd welcome any evidence otherwise, but I suspect you'll have trouble finding any, because I did research this at one point, and as far as I know, no corporate officer in U.S. history has ever been found to be in breach of fiduciary duty for not setting up tax-sheltering subsidiaries. I can imagine a scenario where something like that might happen, but I think it would have to be fairly egregious, probably more something like deliberately setting up a new tax structure to increase a company's taxes (maybe because you know the mayor and want to help him out with his budget or something).
- hop 16y ago
  Yes, you're very right. I more accurately should have said acting in the shareholders interest, which it certainly is in this type of non-shady way to lessen tax liability. If a director, maybe al gore, was against the idea for the pious sake of giving more money to support the govt, that would violate fudiciary duty.

by hop 16y ago

_delirium 16y ago

You assert the opposite of my claim, but do you have any evidence? "Fiduciary duty" is an actual legal term; there are some actions or non-actions which violate a corporate officer's fiduciary duty, and some which don't. Failure to set up a tax shelter, even when it would be possible to do so and it would save the company money, is not a breach of fiduciary duty. I'd welcome any evidence otherwise, but I suspect you'll have trouble finding any, because I did research this at one point, and as far as I know, no corporate officer in U.S. history has ever been found to be in breach of fiduciary duty for not setting up tax-sheltering subsidiaries. I can imagine a scenario where something like that might happen, but I think it would have to be fairly egregious, probably more something like deliberately setting up a new tax structure to increase a company's taxes (maybe because you know the mayor and want to help him out with his budget or something).

hop 16y ago
Yes, you're very right. I more accurately should have said acting in the shareholders interest, which it certainly is in this type of non-shady way to lessen tax liability. If a director, maybe al gore, was against the idea for the pious sake of giving more money to support the govt, that would violate fudiciary duty.