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Comment by belinder | Hacker News Reader

That would be way too easy to take advantage of by a big company making lots of small side companies

I worked for a company that was structured like that.

Basically I worked for a very small company that was in the same offices as several other similar sized companies. All those companies where on the same network and there was no distinction of who was working for which company. They all just mixed together.

No one really cared who you work for anyway since it was all owned by the same 3 people and it behaved like a single large company. Technically though it was just lots of small companies as far as the Government was concerned.

You could just add a good faith clause that forbids it.

How would that work out in practice? Sounds highly unlikely.

Have you heard of contracting practices in the US? Rather than "highly unlikely", this is the norm for tech companies that want to skirt corporate responsibility.

That's an unrelated issue. In this context that could be avoided simply by counting more than half time individual contractors as employees when measuring entity size.

Splitting large companies into smaller ones to get tax breaks and other incentives is extremely common.

For example in the UK there are tax breaks for companies that spend more than a certain percentage of the revenue on research. Just below the threshold? Simple! Split out a research arm!

This is common because splitting a large company into five or six smaller ones is feasible, since the overhead of doing so is much smaller than even the smaller entity size. Setting the threshold such that a company the size of Google would have to split their operations into thousands of individual corporations would be a lot less feasible.

You could also avoid the issue by limiting the exemption to corporations not owned in any part by a corporation that wouldn't itself qualify for the exemption, since the point of the exemption is to help real small entities and not subsidiaries of huge publicly traded corporations.

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