4 ms·

what's with justifying an existence of a company by having employees? If a company is profitable and you as an owner are doing well financially, does it really

what's with justifying an existence of a company by having employees? If a company is profitable and you as an owner are doing well financially, does it really matter?

DreamSpinner 7y ago
I believe the general thought is that at a very simple level, operating as a company provides for a number of protections for the owners/operators. At a societal level, the broad justification for allowing unnatural beings with those benefits is that it still provides a net benefit to society through things like employment opportunities, taxes and the encouragement of economic activity. If the concept of a company no longer provides any non-trivial benefit to society (for example, no jobs or taxes), why should society collectively provide laws that allow them in the first place?
KaiserPro 7y ago
Shell companies are not the same as a person working as a "one man band" For example a company I worked for had a structure where the employees and customers (~250 employees and £50million turnover) were mostly interacting with the named company, but there were three other companies that "onion skinned" the company with the name. This was done to manage debt, primarily, which then allowed manipulation of taxes.
michaelt 7y ago
For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies. This produces the result that publicly traded company Tesco PLC has a great many sub-companies [1]. This is at odds with a lot of expectations about how companies are counted. [1] https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3JdZy4zFMkg0Vw/appointments https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3Jd...
- pjc50 7y ago
  Tax is the usual one. That list also includes a lot of closed or dormant subsidiaries. Perhaps it's best to think of them as being like AWS VMs that get provisioned and de-provisioned, some with short lives. Tesco is complicated by takeovers that haven't been fully incorporated; I see a lot of familiar brand names in that list, and a whole other pile of fragments of Booker (giant wholesalers recently taken over) I tried https://beta.companieshouse.gov.uk/company/07530494/filing-history https://beta.companieshouse.gov.uk/company/07530494/filing-h... based on "EBT" in the name (tax shelter scheme), but it's a dormant empty shell. TESCO GREY (2LP) LIMITED https://beta.companieshouse.gov.uk/company/FC027196 https://beta.companieshouse.gov.uk/company/FC027196 registered in the Cayman Islands? Obvious tax shelter of some sort. Also closed.
- dragonwriter 7y ago
  > For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies One of the common reasons for subdividing firms (in general, not particularly the UK) is to take advantage of liability limitations, which work as well for corporation as shareholder as for natural persons as shareholders. If it is less onerous to set up firms in the UK, you'd expect UK firms to do more of this, because the cost/benefit analysis would favor more of the cost is lower.
deleted 7y ago
[deleted]

what's with justifying an existence of a company by having employees? If a company is profitable and you as an owner are doing well financially, does it really matter?

DreamSpinner 7y ago

I believe the general thought is that at a very simple level, operating as a company provides for a number of protections for the owners/operators. At a societal level, the broad justification for allowing unnatural beings with those benefits is that it still provides a net benefit to society through things like employment opportunities, taxes and the encouragement of economic activity. If the concept of a company no longer provides any non-trivial benefit to society (for example, no jobs or taxes), why should society collectively provide laws that allow them in the first place?

KaiserPro 7y ago

Shell companies are not the same as a person working as a "one man band" For example a company I worked for had a structure where the employees and customers (~250 employees and £50million turnover) were mostly interacting with the named company, but there were three other companies that "onion skinned" the company with the name. This was done to manage debt, primarily, which then allowed manipulation of taxes.

michaelt 7y ago

For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies. This produces the result that publicly traded company Tesco PLC has a great many sub-companies [1]. This is at odds with a lot of expectations about how companies are counted. [1] https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3JdZy4zFMkg0Vw/appointments https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3Jd...

pjc50 7y ago
Tax is the usual one. That list also includes a lot of closed or dormant subsidiaries. Perhaps it's best to think of them as being like AWS VMs that get provisioned and de-provisioned, some with short lives. Tesco is complicated by takeovers that haven't been fully incorporated; I see a lot of familiar brand names in that list, and a whole other pile of fragments of Booker (giant wholesalers recently taken over) I tried https://beta.companieshouse.gov.uk/company/07530494/filing-history https://beta.companieshouse.gov.uk/company/07530494/filing-h... based on "EBT" in the name (tax shelter scheme), but it's a dormant empty shell. TESCO GREY (2LP) LIMITED https://beta.companieshouse.gov.uk/company/FC027196 https://beta.companieshouse.gov.uk/company/FC027196 registered in the Cayman Islands? Obvious tax shelter of some sort. Also closed.
dragonwriter 7y ago
> For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies One of the common reasons for subdividing firms (in general, not particularly the UK) is to take advantage of liability limitations, which work as well for corporation as shareholder as for natural persons as shareholders. If it is less onerous to set up firms in the UK, you'd expect UK firms to do more of this, because the cost/benefit analysis would favor more of the cost is lower.

deleted 7y ago

[deleted]