marketed to accounting firms whose clients included multistate businesses
in need of services with respect to taxation in the various states. The
target accounting firms were not the national accounting firms, which
might be expected to have personnel in their various offices who could
cope with taxation in the state where those particular offices were located.
The target clients (the clients of those accounting firms with the multistate
presence) were those who did not have personnel in their home offices
or elsewhere versed in state taxation in one or more of the states where
the target clients were operating. Big would offer its services to accounting
firms where neither the accounting firms nor the target clients were equipped
to provide the needed services.
In the course of its marketing, Big discovered that it was not necessarily the accounting firms who were the decision makers with respect to the services Big offered, but that in many cases the law firms representing the target clients were the decision makers. Further, in some cases the businesses with the multistate presence were the sole decision makers, instead of leaving that chore to their accountants or to their lawyers. Big expanded its marketing accordingly.
In the course of Big's activities, further market opportunities presented themselves, including but not limited to businesses with a multistate presence reached directly (not through their accountants or lawyers), businesses reached through their accountants or lawyers or directly who had need for different state regulatory services, such as services related to licensing and regulation for insurance, for contractors, for mortgage brokers (and so forth), and businesses with only a single state presence, and so forth. While Big expanded its marketing accordingly in many cases, it did not do so where the market appeared overcrowded (e.g. dealings with secretaries of state regarding corporate entities).
In order to handle the additional business brought in by its marketing, Big would either expand and handle the work directly, create (or acquire) a subsidiary for that purpose, or farm the work out to an affiliate in the state in question, depending upon the circumstances.
As we have previously stated, we are not concerned about these other aspects of Big's activities, other than the aspects directly involved here: (1) Big's activities related to state taxation and related qualification to do business matters on behalf of the clients provided to it through accounting or law firms or directly from major corporations and (2) Big's approach to inquiries involving choice of entity questions for start-up businesses, tax filings for such start-up businesses and entity qualification or formation services for such start-up businesses.
As we will see later, Big did not provide the services referenced in item (2) directly, but instead referred inquiries concerning such matters to a sister corporation (NewBiz, sometimes referred to as "NB").
(c) Copyright 2010 Ragents LLC