4 ms·

The majority of businesses I have worked for, the company leases the building from another company owned by the founders.

• rahkiin 7y ago
  This is to protect the buildings from liability through issues with workers. You don't want to be sued by a worker for something and have the buildings on the table.
  • ckdarby 7y ago
    Would note it financially secures the founders as well. Even if the company removes the founders they're going to be getting that lease payment forever.
  • lotsofpulp 7y ago
    It’s also due to being able to take advantage of lower taxes on capital gains, which you can have if you structure the real estate part of the business to have income from “passive activity” versus “business activity”. https://www.irs.gov/businesses/small-businesses-self-employed/passive-activity-losses-real-estate-tax-tips https://www.irs.gov/businesses/small-businesses-self-employe...
    • deleted 7y ago
      [deleted]
• buboard 7y ago
  doesnt that sound like laundering?
  • Cthulhu_ 7y ago
    Not really, it sounds like a rainy day fund - a business may be out of business (or out of the building) within ten years, but the building will be around for at least another fifty, retain its value, and provide constant income. The laundering aspect may have a grain of truth in a way though; instead of having e.g. an investment or sale paid out (and consequently taxed), it's rerouted into buying a building. Why pay I dunno, 50% income tax to get the money right now instead of reinvesting the money and long-term earning a lot more?
    • empath75 7y ago
      For the CEO