is this legal??

[z0mb13]

a hypothetical situation:

I own both company A and B..

company B uses product and services from company A, but since I own company A, I give company B a very low price for the product and service..

 

[PunDogg]

umm for some reason i think that is illegal, well do you do any gov't contract jobs???

Dogg

 

[KingNothing]

How could that be illegal? If it was then you'd be robbing Peter to pay Paul, essentially.

 

[z0mb13]

Originally posted by: PunDogg
umm for some reason i think that is illegal, well do you do any gov't contract jobs???

Dogg

why would it be illegal??

is there a law against special pricing??

 

[z0mb13]

Originally posted by: KingNothing
How could that be illegal? If it was then you'd be robbing Peter to pay Paul, essentially.

I am asking because I want to know if there is a pricing law... the one that states u have to give the same price for everyone...

 

[olds]

As far as I know, you can price the company right out of business.

 

[CPA]

It is not illegal that I'm aware of. You can do any sort of intercompany transaction you want. Just report it as so.

 

[XZeroII]

I don't think there is a problem unless you sell it for a loss.

 

[z0mb13]

Originally posted by: XZeroII
I don't think there is a problem unless you sell it for a loss.

there would be a problem if I sell it at a loss??? why???

 

[JustinSampson]

Originally posted by: z0mb13

Originally posted by: XZeroII
I don't think there is a problem unless you sell it for a loss.

there would be a problem if I sell it at a loss??? why???

You might be able to get a tax deduction if you sold it at a loss... I'm not sure what your business does or where you are, so it's hard to say.

 

[theNEOone]

well, as you've explained it, there's no problem at all. but you're speaking in very general terms. if, for example you own Internet Explorer, Inc. and Microsoft, Inc. and you sell Internet Explorer, Inc. at an extremely low cost (perhaps even at a loss) and use Microsoft's market spread as a means of invading the market, then yes - it's illegal. you would be called out on anti-competitve practices. can you say, "antitrust"?


=|

 

[XZeroII]

Originally posted by: z0mb13

Originally posted by: XZeroII
I don't think there is a problem unless you sell it for a loss.

there would be a problem if I sell it at a loss??? why???

I believe there is a law against selling products at a loss. It may only apply to trying to undercut a competitor, but you should do some research on it.

 

[theNEOone]

Originally posted by: XZeroII

Originally posted by: z0mb13

Originally posted by: XZeroII
I don't think there is a problem unless you sell it for a loss.

there would be a problem if I sell it at a loss??? why???

I believe there is a law against selling products at a loss. It may only apply to trying to undercut a competitor, but you should do some research on it.

well selling products at a loss isn't illegal per se. it usually has to be combined with other anti competitive practices, but the deciding factor is really your intention. are you selling at a loss simply to establish a monopolistic situation? remember microsoft sells the xbox at a loss per each unit, but isn't being called out on illegal business practices. (jeez, i think i need to lay off the microsoft examples.)


=|

 

[DaveSimmons]

If you own 100% of each company maybe. If anyone else owns even 0.001% it could be seen as embezzlement.

If you are a contractor receiving government money there are likely to be regulations on how you subcontract.

If either company is funded with political contributions or is tax-exempt, more regulations apply.

Or if this is done as a tax sheltering scheme, IRSalarity may ensue.

 

[The Stigenator]

nope... happens all the time.. got to have a contract between the two (written) but it is legal.

 

[EMPshockwave82]

but you own both companies... so basically you are paying yourself for your own product....

why not just merge the companies? - not necessarily merge brand names, just make into 1 company

i dont think it's illegal unless there are other people involved, then you would have to get their approval of course

 

[RbSX]

Originally posted by: z0mb13

Originally posted by: KingNothing
How could that be illegal? If it was then you'd be robbing Peter to pay Paul, essentially.

I am asking because I want to know if there is a pricing law... the one that states u have to give the same price for everyone...

uhm no, what about employee discounts? negotiating a car price? hmm?

 

[halik]

i was soo hoping for underage sex question... damn