The strategy discussed below provides an overview of how a business can benefit by engaging in business with another corporation. The concept is presented in basic terms. Employing the strategy to suit the specific needs of your business requires input from an experienced business person. Corporations Today suggests that you contact one of our account executives for assistance in making the best use of your corporation. As always, we invite the input of other professionals that you rely upon, such as your CPA, attorney, and/or financial advisor.  We can also make a recommendation of non-affiliated professionals based upon your request.

This sound business strategy takes advantage of two powerful features of corporations: 1)Corporations are considered independent legal entities, separate from their owners; 2) Corporations can be based in any state, regardless of where their stockholders, directors, and officers live.

The principle behind this strategy is based upon two companies engaged in business with each other. The first business entity is one's home state company which may operate in any state.  Simply, this is your current business. The second business entity is a Wyoming corporation. By establishing a business relationship between these independent corporations, one's home state company is likely to achieve greater asset protection and a reduction in state income taxes.  Consequently, the economic status of one's business improves.

A number of points should be expanded upon. First, the issue regarding limiting one's liability does not indemnify one's negligence or wrongdoing. It does, however, attend to matters such as frivolous lawsuits and unexpected creditor claims. In addition to all the precautions and insurance that a business utilizes, this business strategy is a crucial and prudent way to reduce your likelihood for a lawsuit. Second, one might inquire about the nature of not profiting in business. A fact of this strategy is that a business does profit. The profitable business, however, is not your home state corporation (when compared to the Wyoming corporation). Therefore, your home state business is referred to as Loss, Inc.  The proper use of Loss, Inc., a business with little taxable earnings and limited assets, can not only meet one's business expectations but it can do so by engaging in a more efficient use of its revenue.

To achieve the benefits of one's home state corporation, although it exists as Loss, Inc., this particular business must work in conjunction with a Wyoming corporation. In general, Loss, Inc. will engage in business with Best Holdings.  Best Holdings, the name appropriately referred to the Wyoming corporation, is an independent business from Loss, Inc. Its corporate base, business license, office, telephone, and employees reside in the business preferred state of Wyoming.

The basis for this strategy is to have both corporations do business with one another. An exchange relationship exists whereby the assets of Loss, Inc. are encumbered by Best Holdings, hence, constructing a form of judgment-proofing one's business. Also, the revenue of Loss, Inc. is offset by expenses incurred from doing business with Best Holdings. Thus, Loss, Inc. earns little, if any, taxable income. In exchange, Best Holdings provides a required and legitimate service for Loss, Inc.

The Wyoming corporation is referred to as "Best Holdings" because it essentially has encumbered assets and accepts much of Loss, Inc.'s revenue as payment for services rendered. Best Holdings can also participate in a loan agreement with Loss, Inc.

There are a number of particular factors omitted from this discussion thus far. For example, questions concerning the control of Best Holdings, the capitalizing of your Wyoming corporation, establishing a legitimate business arrangement between both corporations, the federal taxation as a controlled group of companies and specifics regarding the use of stock issuance, promissory notes, security agreements, and interest payments need to be addressed. These particular issues can be clearly and concisely explained by a professional once your specific situation is presented. Sound complicated? It doesn't have to be.

What is important to note is that the Best Holdings/Loss, Inc. strategy can provide a significant economic benefit to the business person and a viable method for protecting Loss, Inc. assets. A prudent business person should discuss this strategy with their appropriate professional counsel before acting. Since Corporations Today does not provide legal, accounting, or other professional service advice, our account executives not only welcome the input from persons that the client may require for additional assistance, but will recommend such persons based on the client's request.

The goal that Corporations Today, Inc. continues to strive for is to suggest the most effective and efficient business strategy suitable for the client. Corporations Today provides a way for you to achieve the maximum benefit from your corporation. In addition to providing quality customer care to make our service convenient, reliable, and comprehensive, Corporations Today also offers a variety of services as an educational complement to devising a sound business strategy.  

Call Corporations Today and ask one of our account executives to review the Best Holdings/Loss Inc. strategy with you.

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