Tuesday, June 10, 2008

Project V - Corporate Musings

Now, I've created companies with all kinds of structures in all kinds of companies in my time, and the first question arising for Project V is what its corporate structure should be.

The objectives are to keep the company small, profitable and very virtual, so it could live anywhere in the world.

The US has become a very business-unfriendly environment with high fundraising costs and serious regulation issues, especially for small companies. You also have the ridiculous variations in corporate regulation from state to state. So, Delaware and Nevada are out.

Almost all of Europe retains archaic attitudes to forming a business. It can take many months in most EU countries, so they're out. The exceptions are Ireland and the UK.

Ireland is attractive for low sales tax and low corporation tax. The UK has relatively high rates of corporation tax and very high sales tax. There is an in-between option - the Isle of Man, which has no corporation tax and very low personal tax. Unfortunately, to really benefit from these you need to live on an island in the Irish Sea.

I've decided to keep things simple and to continue contributing to the phenomenal amount of tax I have paid in the past to the IR in the UK.

For a small company, the red tape is getting worse and the tax regime is nowhere are near as attractive as it once was for small corporations, but it is probably the easiest option to manage and oversee since I have built up a network of great advisers over the years.

Project V will therefore be a UK based company.

3 comments:

michal said...

Why would you think about any corporate structure - wouldn’t it be better to keep it small and simple - flat structured to endure great working conditions, fast pace, the ability to hear anyones opinion and input as well as great attitude towards the unknown, unexplored areas? In my experience any corporation or a small company thinking about becoming one has much less ability to move and react quickly.
Anyway - based on your previous posts I hope that the small and simple is really the way you want to go.
Good Luck!

michal said...

Why would you think about any corporate structure - wouldn’t it be better to keep it small and simple - flat structured to endure great working conditions, fast pace, the ability to hear anyones opinion and input as well as great attitude towards the unknown, unexplored areas? In my experience any corporation or a small company thinking about becoming one has much less ability to move and react quickly.
Anyway - based on your previous posts I hope that the small and simple is really the way you want to go.
Good Luck!

Iolo Jones said...

OOps, your comments got published twice somehow..

Corporate formation structure and management structure are two different considerations; my next Project V blog shall be on corporate structures!