3 ms·

Obviously, this gets handled under UK charity law, not US — but I wonder if this would fly in the US. Charities can own for-profit entities, but pay taxes on t

by Digory 5y ago

Obviously, this gets handled under UK charity law, not US — but I wonder if this would fly in the US. Charities can own for-profit entities, but pay taxes on the Unrelated Business Income. But this is closer to a for-profit hospital conversion on steroids, where the driver becomes the profit, not the the charity. There’s a very obvious conflict of interest between the charity, management, and the public investors, which could turn into a carnival for lawyers.

detaro 5y ago
Related: Some US states have "public benefit corporations", that can (have to) put other goals over stockholders. Can those IPO?
- m-watson 5y ago
  If you are talking about for profit benefit corporations (B-Corps), they can IPO. They are essentially just C-Corps with non-financial tracking metrics written into the bylaws.
- consumer451 5y ago
  User m-watson's comment made me look up if any B Corps have gone public and there certainly are IPOs. [1] Including subsidiaries of majors like Coca Cola. The few I looked up listed on NASDAQ and had overall flat performance. Which I guess is what you would expect? Disclaimer: I am an investment neophyte, would love to be corrected or expanded upon. [1] https://kb.bimpactassessment.net/en/support/solutions/articles/43000632643-publicly-traded-b-corps https://kb.bimpactassessment.net/en/support/solutions/articl...
vmception 5y ago
They are selling pieces of a subsidiary, subsidiaries taxed at the entity level (instead of pass through) always block regulatory restrictions of the shareholder. see “blocker corporation” when formed for this specific purpose It is interesting to think of this under US law since non profits are regulated heavily, but its not really that absurd The US version would require reducing shareholdings to below 35% or 20% - depending on what kind of foundation/nonprofit it actually was registered as, and what kind of decision making is being done. It wouldn't be unrelated business income tax it would be excess business holdings tax which I think can be way worse of an excise tax, up to 200%

by Digory 5y ago

detaro 5y ago

Related: Some US states have "public benefit corporations", that can (have to) put other goals over stockholders. Can those IPO?

m-watson 5y ago
If you are talking about for profit benefit corporations (B-Corps), they can IPO. They are essentially just C-Corps with non-financial tracking metrics written into the bylaws.
consumer451 5y ago
User m-watson's comment made me look up if any B Corps have gone public and there certainly are IPOs. [1] Including subsidiaries of majors like Coca Cola. The few I looked up listed on NASDAQ and had overall flat performance. Which I guess is what you would expect? Disclaimer: I am an investment neophyte, would love to be corrected or expanded upon. [1] https://kb.bimpactassessment.net/en/support/solutions/articles/43000632643-publicly-traded-b-corps https://kb.bimpactassessment.net/en/support/solutions/articl...

vmception 5y ago

They are selling pieces of a subsidiary, subsidiaries taxed at the entity level (instead of pass through) always block regulatory restrictions of the shareholder. see “blocker corporation” when formed for this specific purpose It is interesting to think of this under US law since non profits are regulated heavily, but its not really that absurd The US version would require reducing shareholdings to below 35% or 20% - depending on what kind of foundation/nonprofit it actually was registered as, and what kind of decision making is being done. It wouldn't be unrelated business income tax it would be excess business holdings tax which I think can be way worse of an excise tax, up to 200%