Nevada has long been an alternative to Delaware for C corps. Any ideas what advantage Texas has over Nevada? Or simply: why not Nevada?
Texas gives out goodies. And fewer people want to live in Nevada than Texas.
This doesn’t give you a seat at the table. Living in Texas, having a large number of employees who pay taxes and vote, that gains you influence with the legislators and governor. Not relevant for most companies. Important for Musk and Mark.
And what goodies does Texas give out? Like the ones that Disney got?
Yup. Texas gives out tax breaks and grants more freely than Nevada. Its governor and AG are also more powerful, which is nice if they’re on your side.
That's honestly a really big problem.
Why?
Every business is going to be where its customers are not to some degree. That’s just fundamental to trade and, like, hadrons.
Every business should be prepared to deal with legal issues in whatever jurisdiction they're doing business in. Being incorporated somewhere else to avoid or prefer laws (such as taxes, or employment, or shareholders) is therefore reprehensible.
If you go to a different state and break the laws there, you can't magically claim that a different state has jurisdiction just because that's where you were born. Alas, that's exactly what businesses seem to have and abuse.
Yes. This is how it works.
> that's exactly what businesses seem to have
It really isn’t.
That’s the point. Musk and Mark are used to having influence. They don’t in Delaware because they don’t bring that much money to it and don’t control many votes. They have those things in Texas.