Business Organizations Law Commons^™

Basic And Non-Basic Tax Tips For Leasing Lawyers, Bradley T. Borden

Faculty Scholarship

No abstract provided.

There's A Problem With Buybacks, But It's Not What Senators Think, Daniel J. Hemel, Gregg D. Polsky

Scholarly Works

In a deeply divided Washington, one of the few issues on which leading lawmakers on both sides of the aisle appear to agree is that corporations should be discouraged from buying back their stock from shareholders. This short article argues that, while this anti-buyback sentiment is misguided, there nevertheless are good tax policy arguments for reforming the tax treatment of buybacks. The article recommends adoption of a 1969 proposal made by Professor Marvin Chirelstein that would recharacterize (for tax purposes) buybacks as a pro rata cash dividend, followed by sales of shares from the shareholders who participate in the buyback …

Teaching Legal Studies In Business Degrees: A Review Of A Method And Its Practice, Diane Kraal, Andrew Coleman

Australian Journal of Teacher Education

The legal studies teaching methodology IRAC (issue, rule, application, conclusion) is widely used in universities by both law and business schools. This paper examines the effectiveness of IRAC from a teaching perspective and its usefulness for business students. Data is generated from an Australian university case study using teacher interviews and a student survey. The findings suggest that, because of its flexibility and logical structure, the practice of IRAC has become normalised. However it is only effective if teachers disseminate these features consistently in their teaching. Students in the study understood the usefulness of IRAC for classwork, but encountered application …

Insulation By Separation: When Dual-Class Stock Met Corporate Spin-Offs, Young Ran Kim, Geeyoung Min

Ira M. Millstein Center for Global Markets and Corporate Ownership

The recent rise of shareholder engagement has revamped companies’ corporate governance structures so as to empower shareholder rights and to constrain managerial opportunism. The general trend notwithstanding, this Article uncovers corporate spin-off transactions — which divide a single company into two or more companies — as a unique mechanism that insulates the management from shareholder intervention. In a spin-off, the company’s managers can fundamentally change the governance arrangements of the new spun-off company without being subject to monitoring mechanisms, such as shareholder approval or market check. Furthermore, most spin-off transactions enjoy tax benefits. The potential agency problems associated with the …

Getting Their Fix: Doctor's Dependency On Big Pharma, Larissa Tiller

The Business, Entrepreneurship & Tax Law Review

Section 6002 of the Affordable Care Act, also known as the “Sunshine Act,” was intended to stop corrupt practices within the medical community by requiring pharmaceutical and medical device manufacturers to disclose all transfers of value of a certain amount made between them and physicians. This article suggests that the better solution to stopping corrupt practices is to ban some transfers all together.

Corporate And Business Law, Christopher L. Mclean

University of Richmond Law Review

The past two years have produced a number of pieces of legislation from the Virginia General Assembly that serve to bring the set of Virginia business entity statutes up to date with its peers around the country. Part I highlights changes to the Virginia Stock Corporation Act (“VSCA”) and the Virginia Nonstock Corporation Act (“VNSCA”). Part II highlights changes to the Virginia Securities Act (“VSA”) and other statutes affecting Virginia business entities. Part III reviews two significant cases that the Supreme Court of Virginia decided over the past two years with respect to Virginia corporate law. Those decisions provided guidance …

The Persistent Appeal Of S Corporations: How Tax Cuts Might Not Help Small Corporations, Manas Kumar

Michigan Business & Entrepreneurial Law Review

This Note will first review the tax preferences for entity choice under the old tax regime for the sake of context. It will then compare the tax benefits of electing to C and S corporation status under the regime created by the Act. The Note will conclude with an analysis of the factors sustaining the tax appeal of pass-through firms for lower-earning businesses with special attention to the largely unaltered state of tax law and business entity choice. It proposes that the Act did not sufficiently reform the Internal Revenue Code to close up the tax advantage that high-earning corporations …

How Shell Entities And Lack Of Ownership Transparency Facilitate Tax Evasion And Modern Policy Responses To These Problems

Marquette Law Review

The purpose of this article is to review the use and application of shell entities, as they facilitate tax evasion, impede investigations, and harm society. This article details the types and characteristics of shell entities, reviews actual cases to exhibit how shells are abused, outlines reasons shells disguise beneficial ownership, and analyzes steps taken by countries and organizations to thwart the abuse of shell entities. Many types of shell entities are used by tax evaders and are often layered in an intricate network which conceals the identity of beneficial owners. Nominees and bearer shares are used in tandem with shell …

Tax Havens As Producers Of Corporate Law, William J. Moon

Michigan Law Review

A review of Christopher M. Bruner, Re-Imagining Offshore Finance: Market-Dominant Small Jurisdictions in a Globalizing Financial World.

Fighting Technology With Technology: Taking Aim At Electronic Sales Suppression, Richard Thompson Ainsworth, Robert Chicoine

Faculty Scholarship

Electronic sales suppression (ESS) is a fraud that has been a (prominent) feature of the North American retail business since at least 1996. The first EES case in the US dates from 1981. ESS is a global problem. Depending on the jurisdiction, and the research study consulted, ESS is estimated to be present in 34% (of Canadian), 50% (of German – two studies), and 70% (of Swedish and Slovenian) businesses. It may be the case today, that “you cannot leave home without” encountering (or participating in) ESS.

The most common types of sales suppression technology are Zappers and Phantomware programming. …

Zapped! An Analysis Of Washington’S Electronic Monitoring Agreement, Richard Thompson Ainsworth, Robert Chicoine

Faculty Scholarship

The State of Washington v. Wong, Wash. Super. Ct., No. 16-1-00179-0 is the State of Washington’s first judicially resolved case involving an automated sales suppression device. Months of negotiations led to a plea agreement and the State’s first electronic sales monitoring agreement (August 30, 2017). The taxpayer violated RCW 82.32.290 (4)(a) by knowingly possessing, and knowingly using a Zapper to suppress sales.

The penalties in this case were severe. Not only were all taxes, penalties, and interest lawfully due required to be paid, but as a Class C felony incarceration of up to 5 years, a $10,000 fine, or both …

How Special Is The Special Timing Rule? Analyzing The Timing Of Fica Taxation In Nonqualified Deferred Compensation Plans, Alan J. Ponce

Georgia State University Law Review

Many employers offer nonqualified deferred compensation plans as a benefit to select employees, and those plans allow the employees to prepare for retirement in a tax-efficient manner. For employers,designing and administering such plans in compliance with federal law represents a paramount concern in order to achieve the tax advantages such plans entail. However, for these employers, there remains an inherent ambiguity in the tax code regarding how and when employers should withhold Federal Insurance Contribution Act (FICA) taxes—that is, Social Security and Medicare taxes—on deferred compensation in nonqualified retirement plans.

Tax regulations provide two distinct methods for withholding FICA taxes …

A Vatcoin Solution To Mtic Fraud: Past Efforts, Present Technology, And The Eu’S 2017 Proposal, Richard Thompson Ainsworth, Musaad Alwohaibi, Mike Cheetham, Camille Tirand

Faculty Scholarship

On October 4, 2017, in an effort to recover some of the VAT lost annually, the European Commission proposed “far-reaching reforms.” The immediate target is a €50 billion slice of an estimated €150 billion overall annual loss. In its proposal the Commission is looking only at Missing Trader Intra-Community (MTIC) fraud in goods.

Goods (alone) are targeted. If we have learned anything about MTIC fraud since January 1, 1993, it is that fraudsters engaged in this activity are exceptionally agile. MTIC frauds migrate and mutate on command. For example, MTIC fraud in cell phones quickly migrated to computer chips in …

Tax Havens As Producers Of Corporate Law, William J. Moon

Faculty Scholarship

This Review Essay situates Christopher Bruner’s new book, Re-imagining Offshore Finance, within the literature examining the regulation of cross-border finance and highlights its import for thinking about the complicated (and contested) relationship between territorially-configured domestic laws and the increasingly liberal movement of capital. Part I sets out the book’s central thesis. In addition to highlighting Bruner’s novel framework identifying the factors that propel certain small jurisdictions into becoming magnets for cross-border finance, I outline the limits of the framework in accounting for the stability in the overall demand for the commercialization of sovereignty, only one of which is facilitating …

Foreword – The 2017 Tax Cuts: How Polarized Politics Produced Precarious Policy, Michael J. Graetz

Faculty Scholarship

By lowering the corporate tax rate from 35% to 21%, the 2017 tax legislation brought the U.S. statutory rate into closer alignment with the rates applicable in other Organisation for Economic Co-operation and Development (OECD) nations, thereby decreasing the incentive for businesses to locate their deductions in the United States and their income abroad. Its overhaul of the U.S. international income tax rules simultaneously reduced preexisting incentives for U.S. multinationals to reinvest their foreign earnings abroad and put a floor on the benefits of shifting profits to low-tax jurisdictions. The 2017 legislation also added an unprecedented, troublesome lower rate for …

The Up-C Revolution, Gregg D. Polsky, Adam H. Rosenzweig

Scholarly Works

Over the past few years, a revolutionary new tax structure, known as the Up-C, has become increasingly popular, particularly in instances where an LLC is being taken public. In such an Up-C IPO, a newly formed C corporation is placed on top of the existing LLC, which continues to operate the business. Shares of the C corporation are sold to new investors, and the proceeds are used by the C corporation to buy an interest in the LLC. Meanwhile, the legacy owners of the LLC (typically, founders and private investment funds) retain their interests in the LLC, while receiving exchange …

The Cambridge Handbook Of Social Enterprise Law, Lloyd Histoshi Mayer

Books

Book Chapters

Lloyd Hitoshi Mayer, Creating a Tax Space for Social Enterprise, in The Cambridge Handbook of Social Enterprise Law 157 (Benjamin Means & Joseph W. Yockey eds., 2018)

While still relatively few in number compared to traditional nonprofit and for-profit organizations, the rise of social enterprises represents a possible disruption of not only existing models of doing business but also areas of law that in many respects have seen little fundamental change for decades. One such area is domestic tax law, where social enterprises currently find themselves subject to the rules of for-profit activities and entities. Here, both scholars …

A Vatcoin Proposal Following On The 2017 Eu Vat Proposals - Mtic, Vatcoin, And Blockchain, Richard Thompson Ainsworth, Musaad Alwohaibi, Michael Cheetham, Camille Tirand

Faculty Scholarship

The following proposal for an EU VATCoin was presented at the Digital Tax Transformations Conference, December 18 & 19, 2017 in Vienna, Austria at WU Global Tax Policy Center (WU GTPC) at the Institute for Austrian and International Tax Law of Vienna University of Business and Economics.

The EU Commission has proposed “far-reaching reforms” to solve some of the fraud in the EU VAT. It hopes to capture €50 billion lost annually to MTIC fraud in goods. It hopes to do this without addressing tradable services, a MTIC mutation which by all accounts is running strong.

Fortunately, the Commission is …

Can Taxes Mitigate Corporate Governance Inefficiencies?, Noam Noked

William & Mary Business Law Review

Policymakers have long viewed tax policy as an instrument to influence and change corporate governance practices. Certain tax rules were enacted to discourage pyramidal business structures and large golden parachutes, and to encourage performance-based compensation. Other proposals, such as imposing higher taxes on excessive executive compensation, have also attracted increasing attention.

Contrary to this view, this Article contends that the ability to effectively mitigate corporate governance inefficiencies through the use of corrective taxes is very limited, and that these taxes may cause more harm than benefit. There are a few reasons for the limited effectiveness of corrective taxes. Importantly, the …

The Technology Requirements Of The First Electronic Monitoring Agreement In U.S. For Zappers, Richard Thompson Ainsworth, Robert Chicoine

Faculty Scholarship

On August 30, 2017, a plea was entered in the case of case of State of Washington v. Wong, Wash. Super. Ct., No. 16-1-00179-0, and as a result the first electronic monitoring agreement of sales transactions in the US (the “Monitoring Agreement”) was legislatively imposed on a retail business.

The Monitoring Agreement was negotiated between the State of Washington Department of Revenue (the “WA DOR”) and the taxpayer over a period of several months and is comprised of two parts: the basic agreement, which covered the obligations and rights of the parties, and an appendix, which defines the scope of …

An American Football Team In London: How Tax Consequences For International Athletes Could Affect The Success Of A Potential Nfl Franchise In London, Brett Smith

The Business, Entrepreneurship & Tax Law Review

Although the NFL has not announced any definite plans to place a team in London, it has taken significant steps in that direction. By 2022, it could be a reality. As the laws in the U.S. and U.K. currently stand, NFL athletes playing for a team in London would face more income taxes than if they played for a U.S.-based team. The extra tax liability the players would face in the U.K. could prevent players from signing with the London team. If the London franchise struggles to field talent, it will struggle on the field as well. Without reform in …

Partnership Tax Allocations: The Basics, Walter D. Schwidetzky

All Faculty Scholarship

This article endeavors to help practitioners who are not partnership tax allocation experts identify when they should consult with those with that expertise. The partnership-allocation Treasury Regulations have been called "a creation of prodigious complexity ... essentially impenetrable to all but those with the time, talent, and determination to become thoroughly prepared experts on the subject." This article is written for those, to date at least, without that time and determination. At the same time, the article provides an introduction to the partnership tax allocation rules for those contemplating making the requisite investment of time and determination.

The term "partnership," …

Repricing Limited Liability And Separate Entity Status, William H. Clark Jr., D. Alicia Hickok

Seattle University Law Review

In this Article we discuss how U.S. entity law has evolved in recent decades so that (i) limited liability has become available to the owners of any form of business organization, and (ii) all forms of business organizations are now seen as having the status of entities separate from their owners. Those changes have occurred without significant consideration of their consequences or what they mean for the public policies underlying entity law. At the same time, there is an increasing awareness by businesses that promotion of social benefits and/or reduction of externalities is in the firm’s best interests. There has …

In Pursuit Of Good & Gold: Data Observations Of Employee Ownership & Impact Investment, Christopher Geczy, Jessica S. Jeffers, David K. Musto, Anne M. Tucker

Seattle University Law Review

A startup’s path to self-sustaining profitability is risky and hard, and most do not make it. Venture capital (VC) investors try to improve these odds with contractual terms that focus and sharpen employees’ incentives to pursue gold. If the employees and investors expect the startup to balance the goal of profitability with another goal—the goal of good—the risks are likely to both grow and multiply. They grow to the extent that profits are threatened, and they multiply to the extent that balancing competing goals adds a dimension to the incentive problem. In this Article, we explore contracting terms specific to …

Perspectives - Jonathan Denham And Paul Wolf Of Denham Wolf Real Estate Services, James Hagy, Kelly Padden

Rooftops Project

In a conversation with Kelly Padden and Professor James Hagy of The Rooftops Project, Jon Denham and Paul Wolf reflect on their experiences with not-for-profit projects across mission types to draw lessons about creativity in locating and securing permanent space in one of the world’s most expensive real estate markets.

Perspectives - Bms Building Management Systems, James Hagy, Frank Loffreno

Rooftops Project

How can not-for-profit organizations better prepare themselves to launch and sustain effective relationships with their outside janitorial, security, and maintenance service providers? Mike Doherty, President and CEO of BMS Building Management Services, and members of his New York City team consider these themes with Frank Loffreno and Professor James Hagy of The Rooftops Project.

Perspectives - Wework, James Hagy, Stephen Caracappa

Rooftops Project

While the concept of executive office suites has existed for decades, in recent years innovations have emerged seeking to provide a broader range of services and a sense of community combined with affordability and flexibility. Stephen Caracappa and Professor James Hagy of The Rooftops Project talk with WeWork executives David Fano and Mark Lapidus (Class of 2012) about the company’s business model, space concept and design, and the applications for not-for-profit organizations.

Perspectives - David Samuels And Themes Karalis Of Duval & Stachenfeld Llp, James Hagy, Jordan Moss

Rooftops Project

Federal and state law can impose compliance requirements affecting both disposing of and transacting in real estate by not-for-profit organizations. In a dialogue with The Rooftop Project’s Jordan Moss and Professor James Hagy, David Samuels and Themes Karalis of the law firm Duval & Stachenfeld illustrate situations, including some unique to New York law and regulation, in which compliance and care are warranted.

Profiles - Rosie's Theater Kids, James Hagy, Frank Loffreno

Rooftops Project

What started out as a single dance and song class in a borrowed New York City public school lunchroom has evolved into programming that touches the lives of students across all five New York City boroughs in a dedicated building near the heart of the Broadway theater district. The Rooftops Project’s Frank Loffreno and Professor James Hagy visit with Rosie’s Theater Kids cofounder and Artistic and Executive Director Lori Klinger and Director of Advancement Lindsay Miserandino at the Maravel Arts Center in New York’s Midtown West neighborhood.

Profiles - The Sammons Center, James Hagy, Brenda Alejo

Rooftops Project

A historic but disused water pumping station, sited between active freeways, became an early and enduringly successful innovator in mission-centered notfor- profit supportive space for the arts. Brenda Alejo and Professor James Hagy of The Rooftops Project talk with Joanna St. Angelo, Executive Director of the Sammons Center for the Arts in Dallas, Texas.