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I have two companies. One has no income nor expenses per…

I have two companies. One...
I have two companies. One has no income nor expenses per year, however, it holds the account to our health insurance and credit cards. The expenses are not incurred due to business "A" but due to business "B" so business "B" records the bill and pays the bill. Is this legal?
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Answered in 21 minutes by:
1/18/2018
WiseOwl58
WiseOwl58, Attorney
Category: Business Law
Satisfied Customers: 4,470
Experience: Senior Associate at White & Case LLP
Verified

Technically, there is nothing illegal about this arrangement under Georgia or federal law. As long as the bill is paid, you are allowed to do this.

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Customer reply replied 4 months ago
I just want to clarify to ensure as we have an executive that is questioning ethics and is considering leaving hinging on the legality of this. My company "A" receives a bill for health insurance of company "B's" employees. Company "B" records the bill and pays the bill. When it comes to taxes company "A" reports 0 income and 0 expenses. This is legal under Georgia Law. Correct?
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 124,197
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only. Please feel free to ignore any phone service request, the expert does not send those unless asked by customer and they are sent by the site automatically.

I am a DIFFERENT CONTRIBUTOR, as you opted out your previous contributor.

What you are describing is essentially a holding company. Holding companies frequently make no money, they have no income, they simply are used to hold equipment or contracts and they do not take in any income and have no expenses and hence pay no taxes. So it is ethical and it is a common business tool.

Please do not forget to leave positive feedback by clicking on the 5 stars at the top of your page, as the experts are not employees of the site and get no credit for spending time with customers unless they leave positive feedback. Thank you.

Law Educator, Esq.
Category: Business Law
Satisfied Customers: 124,197
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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Law Educator, Esq.
Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
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Experience: All corporate law, including non-profits and charitable fraternal organizations.

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