management of corporations
DESCRIPTION
TRANSCRIPT
MANAGEMENT OF CORPORATIONS
What We Can Learn from Amazon.com
Discussion led by: Lisa, Reza, Ara and Jay
Corporations
Not For-Profit
Government-owned
For-Profit• Public• Closed
• S-Corp
•Is Amazon a For-Profit?
Amazon
Regulation of Corporations
For-Profit Corp
Model Business
Corporation Act (MBCA)
Non-Profit Corp
Model Nonprofit
Corporation Act (MNCA)
Foreign & Alien
Corporation
Due Process
Commerce Clause
• Is Amazon a Foreign Corp?
Amazon
Regulation of Foreign & Alien Corporations
Due Process Clause Commerce Clause
Jurisdiction over the foreign corporation Minimum contacts a state Does not offend traditional
fair play & substantial justice
benefits theory
May require foreign corporations to comply with local laws Law serves a legitimate state
interest State has chosen the least
burdensome means of promoting that interest
Legitimate state interest outweighs the statue’s burden on interstate commerce
• Is there min contact with CA?
• Is there a state interest?
Amazon
Foreign Corporation Doing Business Subject to state courts Subject to taxation Qualified to carry activities in state State regulation of internal affairs
• Is Amazon a subject to CA taxes?
Amazon
The Board of Directors Provides general direction of
corporation; delegates day-to-day to executives
Authority to appoint and remove officers
Power to issue and repurchase stock, set dividend policy adopt laws
Most large companies have 15 or more board members
Elected by shareholders
Directors’ & Officers’ Fiduciary Duties Acting within authority of their position Acting in good faith Acting in best interests of the
corporation Duty of care (business judgment rule)
Liability of the Corporation Doctrine of respondeat superior – liable
for employee’s tort if authorized conduct Criminal liability of corporations when
criminal act performed by:Board of directorsAn officerHigh level administrator who has
supervisory responsibility
Unocal Test
Supreme Court of Delaware ruling Board must show
Make reasonable investigation into threats of takeover
Motivated primarily to protect company and shareholders against those threats
Only reasonable defenses against threat
The Sales Tax Battle: A Timeline
1992 Quill Corp. v. North Dakota• No presence,
no sales tax
1994 Amazon incorporates in WA• Strategy to
minimize tax collection
2008 Amazon revenue tops $19 billion• $10 billion in
the U.S.
2008-09 States face
severe budget
shortfalls
Amazon’s “Good” & “Bad” States
Estimated Losses• An estimated $11 billion
uncollected taxes from online sales last year
• Since the financial crisis of 2008, about $50 billion
• Amazon will lose about 1.4% of $45 billion revenue by collecting tax in all states
Entity or Liability Isolation
Shareholders
Amazon Corporate LLC (DE)
Amazon.com Int’l Sales, Inc
(DE)
Nv Services, Inc. (NV)
Amazon EU S.a.r.l.
(Luxembourg)
Amazon.com (WA)
Ethical Issues Issue
Unfair competitionUnfair price
advantageTax
avoidance/practicesHigher taxes on other
state improvements
AmazonRetreat from states
with unfriendly tax requirement
California Indian reservations tactic
Wholly own subsidiaries tactic
Limiting activities of candidates/employees