Double Trouble? (2)
by Torsten Daerr
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%."
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%."
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