Why 295,000 businesses are in this little building
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- Опубликовано: 19 май 2024
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My inspo for the story! Tooling around on here: www.atlasobscura.com/places/c...
What's the Matter With Delaware (affiliate link: amzn.to/4aq3D9Q):
The definite 101 book here! I will be real with you - normally when I rely on a book I like to put it on screen, praise it, etc. Ultimately, this one just ended up being more anti-Delaware in weird ways and also a little dated in light of the past couple years. I also just didn't gibe with the premise: I don't think there's anything wrong with a state that's following incentives in a big system. That said, check it out if this video left you hating DE.
The Freakonomics version: freakonomics.com/podcast/why-...
Chancellors Roundtable: • The Chancellors: Past ...
Interesting watch! I actually found this surprisingly accessible for a newb. The thing I mention at the end of this video (and didn't get into in Patreon) is about the Trulia case - basically lawyers were spamming the court to get legal fees on case settlements, and the DE bosses said, "Cut that out!" I was gonna use it as an example of how the court routinely pruned itself to stay fit and lean.
A classic combined reporting lawsuit in the genre (that I ended up not mentioning because it's a bit dated). www.mtc.gov/wp-content/upload...
The boss herself on a panel: • The “State” of Delawar...
Most of this was a bit narrow for this video, but it was good to get a vibe and a couple quotes.
Hang with the court!: courts.delaware.gov/chancery/...
Strine on a panel:
www.law.virginia.edu/news/vid...
Strine's article: www.wlrk.com/webdocs/wlrknew/...
This article is a bit old, but I thought it was a great gut check and fun to read.
I found a few random journal articles but didn't rely on them much for this.
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IKEA uses the loophole mentioned in this video. They "don't make a profit" because the IKEA name and logo is owned by a separate corporation, who by sheer coincidence, charges a yearly licensing fee that just so happens to be equal to the amount of profit that IKEA made that year. So Ikea "doesn't make a profit", and thus doesn't have to pay taxes on their profits.
ok, but then doesn't the owner of name/logo make a profit from the licensing fee?
Doesnt the separate company just pay the tax for them then?
@@gibberish5388it's in a different jurisdiction that pays no corporate tax.
Ikea should just start in that area then
@@gibberish5388 The company that owns the trademark registers itself in a tax haven country that either doesn't have corporate income taxes or has lower taxes than the country where the real headquarters are. IKEA has somehow figured out a way to register the corporation that owns their trademarks as a charity, so it won't have to pay taxes at all. No idea how they get away with it. A charity with 40 billion dollars in annual revenue.
Now we know why Phil left Vox - they probably shot down his suggestion for Batman cutaways :D
all my scripts were just me as batman over and over again.
Phil left because Vox didn't allow him to do Batman cut scenes without pants 🩳
In Amsterdam we have a similar building. Crazy how this is legal and not considered tax evasion.
In the business they call it: minimizing tax 'leakage'.
I believe that the payroll taxes on salaries tide over most states, at least enough so that they don't rock the boat or bite the hand that feeds them. Accordingly, next innovation is for all Netflix employees to live in the same Delaware basement and work from home :p
Wasn't that loophole in NL closed two years ago?
lol This is hilarious that you did a Commissioner Boredom gag. I've long felt that you have a passing resemblance to Gary Oldman when he played Commissioner Gordon.
you are not alone haha
@@PhilEdwardsInc erm, I had you more as a Tinker, Tailer, Soldier, Spy Oldman
@@PhilEdwardsInc I look forward to the Gary Oldman Gag Cinematic Universe
Yes - this made my day 😄 thank you
@@PhilEdwardsInc I look forward to Fifth Element Gary Oldman personally
Imagine a business meeting between all of them
Companies are persons. And they don't take up spaces. Are they actually faeries/genies/trolls?
It's all cake in the break room, until somebody replies to all
why would they meet? i think you're confused, it's basically just a postal operation for businesses, thus why over 200k businesses can "operate" in that small building, anything that actually needs to be done is forwarded to corporate HQ which are located across pretty much every state in the US. they are not incorporated, that building only handles the business structure side of things for all these different companies around the nation
I said imagine, mr. businessman
As long as corporations pay taxes to the states that they operate in, I don't care how they are organized.
The problem comes when they find a way to stop paying taxes, and then we can't maintain our infrastructure or schools.
This.
The issue with the way you think is that corporations will bounce around state to state until they have the optimal tax situation for themselves. Thus you need to implement a federal tax for these individuals that they can't avoid so their part is actually paid. If Delaware changes its tax laws they will only move, not pay Delaware.
There's an address in Dallas that's a base for a couple of hundred Texas businesses too.
Which is?
I feel like you could make an entire video on Wolters Kluwer itself. Just looked it up, they started out as a bookshop and now they essentially cover Silicon Valley. Fascinating!
it's pretty crazy.
I knew I recognized the logo and the name Wolters from somewhere. They are one of the largest publishers of school books in The Netherlands, at least back when I went to high school. Never knew publishing was only a fraction of their business!
Sounds like Amazon
You fit right in the part of commissioner Gordon now that I think of it lol
Some countries have regulation that each commercial address can only be used for one corporation
Thanks philtoss for updating the photo and congratulations on your first edit.
As a Georgetown, Delaware native, I can attest to the lack of quaintness. Great video!
Yay - the wikipedia page is updated !!!!
Switzerland we have whole town for this. It is called Zug.
That makes Switzerland a big player in the trade of natural resources
even Switzerland has non of them.
People form LLCs around aircraft & base them in Delaware too.
i actually ran into a lot of these in my sec edgar search
As always, I'm here for the dad jokes. Commissioner Boredom? Grade-A stuff.
You definitely have a Commissioner Gordon/Gary Oldman thing going on. Fingers crossed that a Sirius Black cosplay comes in at some point.
Just for those who might not know Lord of War (2005) was based on Victor Bout.
I hadn’t noticed the Gary Oldman resemblance until now
I have a business registered at 30 North Gould St in Cheyanne WY. I was just using some online service but i later realized when i was looking up my corporation that thousands of businesses operate out of this tiny building. The whole city has only 64k people in it and the state doesn't break a million
Wyoming is the next frontier (or hopes to be)!
I appreciate the dedication of going to the Christiana Mall for the Cheesecake Factory shot. I'm a Wilmington native, nice to see our small but powerful place be covered.
You left out the fun part how legal agreements between states allowed all the corporations based in Delaware to force plaintiffs to file lawsuits against corporations in Delaware, where their suit would then be heard by the Chancery court, which would always rule in favor of the defendant aka the corporation?
Until some states started passing corporate laws that require corporations who do business in their state to have to face lawsuits in the state as well and not pass it off to Delaware or somewhere else.
The Batman skit was hilarious. Also gees Delaware is such a tax free state
I can’t believe after I said to you that you looked like him with the tash you did a skit! That’s amazing Phil. Never change 😂
I figured it was either something in Delaware or good old "Department 1, Richmond, Virginia"
This feels like a tale of corruption where corporations bought the smallest state they could find and turned it into a low accountability haven…. And then you frame it as an innovation story where one ingenious little state made the better corporate law machine/mousetrap? Strange choice.
totally fair to disagree!
I really love the style of this video - but I gotta say I share your suspicions about the storytelling as a quaint americana story.
@@yuotueb totally get it! you'd probably like what's the matter with delaware, which is way more negative on delaware law than i am
@@PhilEdwardsInc thanks for the pointer, and hats off for engaging with critical comments like that!
I think it’s simply a matter of agency: as a smaller state with a similarly small population, they have a smaller tax base to begin with, and with not much room for stuff like industry, they have to find ways to make money. Combine that with its strategic location, and it makes sense they’d choose to attract corporations.
This title made me think of these huge mega buildings, featured in the game Cyberpunk 2077. These block length apartment complexes, where businesses and apartments co-exist.
Sounds like the “mixed use” buildings popping up all over the place here these days
Probably similar, just on a massive scale@@safetinspector2
Publicly traded companies aren't LLCs. They're just incorporated in Delaware.
Went to High School down the street from here.
Finally, Phil shows off his impressions of Gary Oldman! 🦇
Great video. Had to go check and there it was, thanks for upholding your civil duty and fixing the grievous transgression of the miscolored Wikipedia image.
I assume this ties in to Delaware giving corporations voting rights in some elections. Anything to unpack there?
Yeah, I think What's The Matter with Delaware would hammer on that a bit more than I would. I think they're largely local, city-council style elections that are often low stakes.
Like london
Corporations are people, where's your inclusivity and diversity. You're being a bigot and probably a racist. (this is sarcasm)
Stunning as usual (Very illustrative). "Corporate law superstar", nice closure. As non english native (excuse grammar), i really appreciate the use of an extense vocabulary. BTW, my favourite tape to rip, is the blue masking tape 🤣 Regards mate...
you were in wilmington??? man i would’ve loved to meet u you’re a real inspiration! maybe you’ll be back again
Fun day Monday! I thought we were going to have to wait till Sunday, thanks Phil!
When the rules only help a small portion of people and the rest don't even know theres a game on. I don't like that.
If only we can be employed as a shell company in a tax haven so that all our salaries go to that company. We won't have to pay income tax as we take no salary and everything we buy is paid for by the company.
Great videos as always mate!
One errant lit cigarette and someone could crash the entire economy
Glad to see more people talking about this, we have a few of these in my country too
I heard about this from a Legal Eagle video. Not that I remember all the details. I’m just impressed that I remembered it.
I have no problem with each state being unique, but I do have a problem with one state letting the rich and powerful cheat on their taxes
The part where you are talking about stupidity and the people hand Mr. Pennybags the bored apes was hilarious
THE GREAT STATE OF DELAWARE!
When are we getting a "Serious Grey" perody?
*Play on Sirius Black
It's a tax heaven, people, not a "business oriented state".
Haven is the word you were looking for
Isn't this how some scammers get money out of the country? I follow a couple of scam baiting channels where they try to foil the scam calls, email, text, ect. And if I remember right, in one video they tried to follow the money from grandma being duped into emptying her savings all the way to Nigeria or wherever the money ends up. At one point, they end up at a tiny building just like this where there's nobody working except one receptionist, and she just tells them there are 30 companies with that address, some of which are scammers.
I wish you were on CBS Sunday morning news. You have the perfect vibes that show.
I wish I had this video to watch when I was taking my basic corporate finance class. I always wondered why all companies I had to look for their 10-K forms had "Delaware" somewhere within their first few pages, but back then I was too lazy to dig deeper about it than what my homework asked for.
DELAWARE: Every day I'm corporatin'
Great video on something I knew nothing about.
Thank you.
So you're telling me that Delaware's two biggest exports are tax evasion and money laundering?
Speaking of Delaware and DC, did you know that the cartoon ‘Steven Universe’ is set in an alternate universe version of the Delmarva Peninsula where it’s under one state?
And Metropolis is in Delaware too! I guess they just looked at the east coast and said “put it in the middle!”
I know I shouldn't be surprised, but every Phil video is a hit in my book! Another banger
I really love Batman’s business acumen and informed management reflections. 😂 Also, I can’t believe you got Gary Oldman to star in your video! Fantastic video as always, Phil.
Great video Phil, always love your stuff. Just in case you’re not aware (and in case viewers don’t know), the Corporate Transparency Act was ruled unconstitutional by an Alabama federal court, and is currently in the briefing stage on appeal. Depending on how litigation goes down, that loophole may remain open for some time yet.
yes and thank you! that was why i tried to include some vagueness in my description...but totally
I was telling my mom the other day that nobody thinks about Delaware being weird. Thank you Absurdity, you sly, coy stranger you.
lol that quick cutaway to the fountain.
I deadass drive by this building every day on my way into work! I was shocked like the matrix was collapsing when I saw the thumbnail! Thank you for this fascinating look into its actual purpose!
9:35 Nailed that edit
I'm pretty sure I pushed through an order for this address earlier today. I know it was in Delaware and I think it was in Wilmington.
The electric tape rip is the best
skits like that are why we love Phill
Who works in that building?!? What do they do there?!? We MUST KNOW!!!
probably watching their phones all day
I knew so much about this story already... nearly every edyoutuber does it at some point on their channel, but I liked your twist on it. I also like the callout to the Dutch company - that is something I wasn't aware of.
yeah i cringed at the topic a bit once i researched it, but i felt like the chancery court was really undercovered in the other videos, as was the general corporate law. and then there are some updates to the loopholes too. thanks for being patient with it!
dang! somehow i missed this notification, well glad I found it
I've been aware of the role that Delaware has played, but not to this extent. Great title to capture the attention and honor the research you had to perfrom!
In this episode, Phil finds out just how fun fictions of law can be!
The CTA only affects Limited Liability Companies (LLCs) and not corporations. And since most LLCs in the United States are single-member LLCs, the alleged "money laundering prevention" powers of the CTA don't really apply to them, and they certainly don't apply to corporations. Regardless of their good intentions, the CTA was essentially a waste of time and energy.
Delaware being a "laboratory of corporate law" is a good thing for the nation. As just one example, Delaware was the first state to introduce the concept of the LLC, and of the Series LLC.
Phil,
Another great video! 👏 And I want to share the funny way I learned about this topic. When I was in elementary school one of my favorite TV shows was _Get _Smart_ . For those who don’t know, it was a satire of spy movies of the ‘60s where the good guys belonged to an agency called CONTROL and the bad guys belonged to an agency called KAOS.
In one episode KAOS took over the airwaves and threatened the country, as they often did. At the end of the announcement the KAOS agent said, “KAOS, a Delaware corporation.” It wasn’t until late in high school that I understood the joke. 😂
EDIT
I found the episode! It was episode #59, “A Man Called Smart, Part 2".
hahah this was in my nick and nite circulation but i don't have as good memory retention. a very on point reference!
So they finally settled on "Delawareans" as opposed to "Delawarites"? Good for them.
Need to have laws on the books that state how many businesses can be in one building and these corporations need their assets seized and given back to the people.
i’m watching this video on Chancery Lane in London, where many lawyers and courts have been for 100s of years
Batman in shorts is such a vibe
Ah so the company that publishes most of the nursing textbooks I used also (checks notes) runs that building in Delaware.
Thanks. This is really an interesting perspective of it. I thought Delaware was just the place to go to avoid taxes. Of course it had to be a little more complex than that.
“… it's even worse-shell corporations.” “… yeah.” 😂
Tl;Dr
That many businesses can fit into a single building because all of them are clowns
The health of the US economy needed those businesses to pay their taxes. Not for them to commit quazy legal tax fraud.
I'd like to point out to the Americans in the comment section that we, the non-Americans, love Delaware! When I started my tech company I registered a C-corp in Delaware and this allowed us to do business faster in the States. And whenever we do contracts with companies in other states, we pay taxes! willingly! :D
And then some of those taxes get back to us as part of the USAID program and majority goes to America. So it's a win-win!
I like your casio. And the video.
thank ya! casio 4ever.
Lot of kickbacks in Delaware...correction kickups.
Reminds me of the often sighted Maine registered semi truck trailers all over the road. Maybe another story to consider covering. I'm sure there are states that aren't happy that Maine essentially 'steals' their own registration fees from them.
oh that's a good one!
The chancery court was also rather notable in the Jim Crow era. One of the cases that preceded Brown v Board (and was argued by one of its attorneys, Louis Redding) was argued at the chancery court because it involved segregation at the University of Delaware (all white at the time) who wouldn’t take black students, mostly forced to go to Delaware Dtatue University (still a historically black university).
Two of the cases in Brown v Board also came from Delaware: One in Hockessin and one in Claymont.
didn't run into this! thanks for mentioning.
Phil, what are your thoughts on Trump ? Not sure who to vote for Biden or Trump ?
I went frame-by-frame to catch all the map gags
While you're talking registered agents, you could also talk about Wyoming. There's a particular agent there that's affiliated with dozens if not hundreds of business entities which have been accused of or associated with various fraud schemes, etc.
The covid bailout money was interesting. I found out the "family owned" business I worked for was dozens and dozens of corporations created to essentially always make it look like the visible businesses were losing money because these heretofore unknown to me businesses all owned by the same LLCs were taking all profits and of course covid loans. Money creates more money. That should be written on the Delaware flag.
ha new motto!
A lot of credit cards companies are also based there or South Dakota because of usery laws.
i pass San Francisco Standard every day on my way down to the office. i think of you.
Damn Phil I live here. I drive past that building all the time. You should have reached out. 😁
Too funny, the company I work for is filed in DE for the corporate law advantages as well... But I noticed your RUclips handle is now PhilEdwardsInc... You don't want to go the DE LLC route??
doesn't really benefit a small fry like me! though i am an llc. i'm just philedwardsinc because my name is too darn common.
Whether I find ripping electrical tape satisfying hinges on what I'm using it for. Depending on the application, the way ripping deforms the tape can sometimes be like "arrrghhh!" Otherwise, yes. Yes I do.
agreed. it does really take the rip harder - it's like you really made a dent in it
goated as usual
It's green now!
Great video as always. This hits close to home figuratively and literally. Most of the people you shown, I have known for many years. You should look into the Delaware bar exam, and all the weirdness that comes with that.
Also, the extra pink you added to the map covers Seaford, DE. They recently gave corporations the right to vote. I’ve known Mayor Genshaw before he was mayor.
Finally, be careful about leaving things out in the open in Wilmington. Wilmington is pretty safe right now, so it isn’t that big of a deal.
If you read this, you should do a video on how Delaware State had the Prime Minister of Jamaica give a commencement address. There’s a lot of history in that story.
i will look into that jamaican delaware connection.
the delaware law school situation is interesting to me too (though not the same as the bar obviously). my hotel was down the street from widener "delaware school of law" and it was pretty unique.
@@PhilEdwardsInc haha. My brother went to Widener. UD doesn’t have a Medical School or a Law School. UD couldn’t afford to purchase Widener Law. I remember years ago, when UD was considering it.
@@anon69_q it was a crazy coincidence because i booked the wrong doubletree. the tgi fridays was good though haha, so i can't complain!
*DELWARE MENTIONED HELL YEAH*
(also love this breakdown of the crazy tax haven that is here)
The awning is greenwashed. 😊
Congratulations on your Wikipedia photo update. Your family must be very proud.😊😊
I'm partial to ripping flagging tape, myself.
Damn, that was interesting : )
I want to hear Legal Eagle's angle on this