It all depends on what this arrangement is designed to secure:
Tax avoidance could be a likely risk depending on whether the arrangement is being used to create tax savings whilst lacking any commercial substance.
Where there is evidence of a criminal intention to evade reporting tax by the use of this structure, tax evasion could be an issue.
The above two are complex but one way of simplifying the whole exercise is to stand back and look at whether the arrangement has any commercial substance and/or legal basis, both domestic law as well as international treaties where the arrangement extends to foreign acquisitions..
Corporate civil and criminal law could be a problem as well if the arrangement is being used to either milk investors of startup or working capital or deprive them of a fair share of the profit.
Finally, money laundering also comes to mind if the arrangement is being used to redeem illegal earnings.
hardtootell-2 wrote:I have an idea and some questions surrounding it. I hope this forum is open minded enough to have a discussion without getting too judgmental.
So here it is:
Supposing we suspend our sense of "morality" for just a moment:
An individual forms a corporation for the intention of acquiring other corporations. The acquired corps (lets call them daughter corps) would need to have a mix of liabilities and assets. The aquiring corp strips the assets from the daughter corps and deposits them into the acquiring corp and then into her personal assets and folds the daughter corp or leaves it to wither.
Has any common law been broken? How about civil law? Has anyone seen this done or done it? As far as morality is concerned- lets just say, for the purposes of discussion that we are going to hell any ways
Let me know what you think
