Re-righting the Role of Companies and Other trading entities
Re-righting the Role of Companies and Other trading
entities
Wouldn’t it be nice if trading companies had a social
purpose, in addition to making profits for their shareholders?
The legal entity of a company was established about
400 years ago as trading routes opened up across the world. The limited liability status was added in the
early 1800s. Since then the role of the
company has been the primary form of wealth generation by manufacturing, transporting,
and selling goods and services.
There has probably never been a time when all of the
stakeholders were allocated a share of the profits i.e. after the owners paid
the lowest amount they could to the workers, then they kept the remainder. Maybe now is the time for this to change.
However, since the proliferation of tax havens in the
early 20th Century, the manipulation of profits and taxation has
become an industry in itself, and to some has become a completely acceptable
face of capitalism. Indeed, most top
Accountants have divisions of staff working on how to evade paying tax (legally
of course). But to quote President Bowis,
‘if it looks like a turd, and smells like a turd, then probably it is a turd’
i.e. tax evasion.
So, what can we do to make companies and wealth
generation more responsible for the whole of humanity, rather than just being a
way for a small number of people to increase their offshore tax haven bank
balances?
How about? :-
1. All
trading entities within the UK to produce Accounts declaring their UK sales and
UK direct costs (this stops Amazon off shoring their sales revenues to
Luxembourg). Auditors to confirm that
the accounts are produced on an ethical basis with all revenues declared and
just appropriate costs allowed (there is to be no transfers to costs outside of
the UK to lower tax regimes).
2. All
Accountants/Auditors to be precluded from promoting tax avoidance/evasions
schemes. Fines of the whole year profits
of these Auditors (pre-partner salaries/dividends) to be levied if any firm
does not follow the spirit of the new law.
Individuals that promote such practices to be banned from practising.
3. Corporation
tax at nil upto £12k, at 20% upto £100k and 30% thereafter.
4. Grants
for businesses that are deemed to be useful for our Economy (Yes to PPE equipment
manufacturers and NO to bookmakers).
These grants are to help expansion/job creation.
The following for all businesses of annual
£10m+ turnover or £1m+ profits.
5. An
Auditors report that lists what the Company needs to do to enable it to be self
sufficient and withstand shocks of up to 1 year without sacking staff and
Government Intervention. A plan and
annual progress to be detailed in the Accounts.
6. Elected
staff representatives to take up at least 25% of the board.
7. Maximum
top to bottom ratio of pay to be 15x. So,
if the lowest paid member of staff is £15k p.a. then the maximum pay for the
highest member of staff is £225k.
8. 10%
of pre-tax profits to be given to good causes with a simple staff vote on who
is chosen.
9. Maximum
working week of 35 hours, and to be reduced to 30 hours within 5 years.
10. Only people who work at the business to be
paid by the business. Owners cannot ‘employ’
family members to allow them to break ‘top to bottom’ ratio maximum.
11. Only valid trading expenses to be
allowed. Owners/Directors cannot create
invoices to 3rd parties that do not relate to the activities of the
business (to reduce tax/avoid top to bottom ratios).
12. Significant fines for businesses that do
not follow the spirit of the taxation laws and top to bottom ratios.
13. A profit share across all staff members
that bears some resemblance (maybe even equates to) the proposed dividends.
14. A pollution audit where any damage to the
Earth is put right. This is by direct
actions and indirect actions of, say when the Company outsources to a cheaper
region, and outsources the pollution to say India.
The following for all businesses with turnover of
£100m+ or profits of £10m+
15. Writing down Allowances to be allowed
equally over a 10 year period.
Maybe if the bulk of the
above could be adopted then we might all feel as though we have a stake in our
working lives. I would even think that
productivity and profits would increase as the staff buy in to their futures.
Now wouldn’t that be
nice if all Companies across the major world adopted this social usefulness. Not just for ourselves but also for our
children and our children’s children.
Love and Peace
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THANK YOU
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