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Sunday, July 1, 2012

Bad company

In a race to the bottom to see which state can have the sleaziest corporate laws, Delaware has always been the leader. It's where the wealth creators go when the Caymans are too far away. But now Oregon's been listed close behind Delaware in the bottom 4, along with Nevada and Wyoming. Kate Brown, say it ain't so!

Comments (8)

Hey. Our companies are people, too, my friend.

Good people.

I'll believe that corporations are people the day that Texas executes one of them.

Oh, they do. It's called administrative dissolution. Brown rolls out the gurney every weekday.

As I've commented before:

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."

Judge Learned Hand (1872-1961), Judge, U. S. Court of Appeals
Gregory v. Helvering 69 F.2d 809, 810 (2d Cir. 1934), aff'd, 293 U.S. 465, 55 S.Ct. 266, 79 L.Ed. 596 (1935)

That's wonderful, but the point is that the tax avoidance here is state-sponsored.

Anyone who's ever tried to find out the owner of an Oregon company is in for a lot of hard work, most times, leading to a dead end. The Sec. Of State Corporation Division does NO checking on the registration information that companies send in. It's all done on the honor system. All members of a LLC are supposed to be listed (and published), but in many cases, only an agent is named. Likewise, the principal place of business is typically an office that has no relation to the business itself. Names change and companies own or manage other companies...

If someone wants their ownership kept private it's easy to duck the system and create a maze of names th at are hard to disentangle. I once had to go to the county records office to see who we're the actual owners of a property by looking for the names on the recorded mortgage. This too, may have been deceiving since many people make deals outside their mortgage terms. Would that everyone was honest and deserving of the honor system, or perhaps Oregon can spot check random registrations and enforce its own rules.

I bet Judge Learned Hand had some other interesting legal views back in his day that no longer apply to the 21st century.

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