Recently, West Sanitation Services, Inc., decided to merge corporate and manufacturing operations, currently located in different states, and relocate to Baton Rouge. The company’s corporate headquarters are now in California and its manufacturing operations are in Illinois. Business law experts believe the move is in the best interest of the company and will result in significant growth and profitability.
The merger of West Sanitation’s corporate headquarters and manufacturing operations and the decision to relocate represents a $1.14 million capital investment for the company. The large investment is expected to create dozens of new jobs. West manufactures and distributes odor control products for commercial restrooms.
The company recently stated that its headquarters will move to Louisiana next summer, while manufacturing operations will begin in Louisiana as early as February. The addition of nearly 44 new jobs, averaging $38,000 per year plus benefits, will be a huge boon to the Baton Rouge economy, which has suffered in recent years.
According to the company’s president, the decision to merge and relocate operations to Louisiana was based almost exclusively on financial considerations, and the current tax and regulatory structures in California and Illinois “restricted … opportunities for growth and profitability.”
Whether moving across country or just across town, there are a number of legal issues a company must consider when contemplating a move. Merging business units under one roof can also present its own unique challenges. While the financial and tax implications of moving operations are important, they are only the beginning.
Depending on the type of business, it is important to consider such regulatory matters as local environmental and employment laws, which could greatly affect the expense to existing operations.
There may also be other regulatory concerns that are specific to your industry. Local business law experts will be versed in these issues and make a great resource if you are considering relocating your business operations.
Other issues include the business structure and the company’s legal presence in the new state. The impact of the structure of the business can vary from state to state.
These are only a few of the many factors that must be considered when relocating a business. Tax and regulatory issues are only the tip of the iceberg. Many more issues are industry specific. To fully understand these and other business law issues it is important to speak with a business law expert who can provide sound legal advice for issues that may arise.
Source: The Advocate, “West Sanitation relocating HQ and plant to BR,” Advocate Staff Report, Jan. 14, 2012.