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Double Trouble? (2)

Turner:  I know, I know! There doesn't seem to be an end to the problems; Truthfully, I've been thinking about taking an early retirement. Some of the board wants to move the company to Mexico.

Steve:  Mexico!

Turner:  Yes, lots of companies are moving there: Maytag, RCA, Brunswick, Hershey's, even medical companies. The labor is cheap, about $10 a day per person. Previously, U.S. corporations could only rent the land, but all that has changed. And there's a huge tax advantage. All things considered, I'm going to vote for a move.

Steve:  What about the building? Would it be difficult to sell? Turner I don't think so; we had a potential buyer make an offer a few months ago. Of course, we weren't interested in selling then, but now. (The other men come into the room.)

Webb:  Good morning, everyone! Ah, good someone's made coffee. (He pours a cup and sits down.) Gentlemen, I'm feeling optimistic today; I know we are going to be able to solve our problems and make this even better! (The other men agree with him.)

Steve:  Are you talking about solving the problems here or in Mexico?

Webb:  Mexico? Steve, what are you talking about? (He is confused.)

Turner:  I was telling Steve about some of the large companies that have relocated to Mexico when faced with insurmountable problems. I think that's what we have here.

Webb:  Nonsense! Can you imagine a move of that magnitude? And our employees; all of them out of jobs…You can't be serious!

Phillips:  Maybe we should hear him out. Just as another option…

Webb:  No, it's ridiculous. This company is going to stay here.

Johnson:  But, Martin, let's at least listen to what he has to say, before closing that door.

Webb:  (He is fuming) All right, Ron, you have any facts or figures on companies that have moved to another country?

Turner:  Yes, I do. Now don't be angry, Martin, I was just thinking of a way to protect our investments. If all of you will just wait here a minute, I'll go get the information from my office. (He hurries out the door.)

Webb:  (Disgusted) I just don't believe this! It's like giving up before the ship even leaks. What do you think, Steve?

Steve:  I'd like to hear what he has to say, before making any comments, O.K? (drumming his fingers on the table.)

Turner:  (running back into the room and waving a fistful of papers and a DVD.) Let me read a little bit of this and then I'll have the secretary make copies for anyone who wants them. I also have a short film from Luis I'd like you to see.

Webb:  This is a waste of time!

Turner:  This information is from my friend Luis who is an attorney in the San Diego and Tijuana region. "There are three typical forms: 1. a Participation Agreement 2. A Joint Venture Agreement and 3. An International alliance.

Phillips:  So, where would that place Omega?

Turner:  Luis says "an international alliance may eventually lead to the incorporation of a registered company. There are several types of commercial companies. Either a Limited Liability Stock Corporation or a Limited Liability Partnership is recommended. Both may adopt the form of a variable capital the increase or decrease of their capital may be made by a mere Stockholders'/Partners' meeting without modifying the By-Laws."

Johnson:  So how would this affect the shareholders and the directors?

Turner:  "In both the SA and the SRL (i) the shareholder's/partners' liability is limited to their capital equity contribution; (ii) the directors are liable for loyally and diligently administering the company; (iii) must have at least 2 shareholders/partners, and (iv) the corporate tax rate will be 34%."
Author: Torsten Daerr