Comment by Darmani
16 years ago
How are they defining small business? There are quite a few definitions that exclude startups.
Still, since I've spent the last few months hearing rumors about a bill allowing the president to seize any business that "threatens the economy," this is welcome news indeed.
The article says:
"To qualify as a small business, the corporation, when the stock is issued, may not have gross assets exceeding $50 million (including the proceeds of the newly issued stock) and may not be an S corporation."
"..the corporation must be engaged in a trade or business other than: one involving the performance of services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services or any other trade or business where the principal asset of the trade or business is the reputation or skill of one or more employees; a banking, insurance, financing, leasing, investing or similar business, ..."
Looks like we're out, guys..
I don't see that as exclusionary; I read it as intending to exclude professional corporations, i.e. where you bill for time (performance of services) as opposed to charging for a product.
I imagine if they didn't exclude such, you'd have a rash of LLPs turning into C-Corps; not sure what other negative consequences they're hoping to prevent.
they should state that more clearly then, if that is their intention.. like this it seems to me as if an engineer who designs some important technological invention and starts a startup around it, would be excluded... Also, would it be that bad if a significant amount of companies changed their formal structure in order to take advantage of this? It would mean an across-the-board incentive to create (and grow) companies, does it really matter that much what sector they're in?
4 replies →
Only consultants are out. If you're selling a product, you're fine. If you're offering some sort of cloud computing service, it sounds like you're fine. All the businesses listed sell people.
how so? i read it as meaning we're in. i doubt they mean engineering in the computer engineering sense, and even if they did, most of our business are consumer services, not engineering services. further, i wouldn't say the principal asset of the business is the reputation or skill of one or more employees -- presumably the asset is the software developed and the user base around it.