Does this work and/or is it allowed (I do not want to break any rules) ?
I outgrow my domestic market, so I setup subsidaries in open market countries.
Now, I need to figure out a way to channel income from said subsidiraies back to the holding. After I've established and stabilized the sub, I do an IPO and then buy back most of the shares. In order to make sure that the IPO is successfull, I might even ask for a friendly company to participate in this transaction ie. he subscribes and I then buy back the shares after the IPO.
End result: I have a public company of which I own 100% or somewhat close to that figure, and it pays dividends to the holding.
As far as I'm concerned, that's completely "legal".
Or just transfer a plane for free and buy it back, without the hassle to go through IPO. This works of course only if neither of the two companies is listed on the stock market.
Also you can subscribe to IPO with other subsidiaries of your own holding (but not of other holding you own on worlds that allow multiple holdings), if such subsidiary complies with the requirements (e.g. minimum equity levels, etc.). The money you use for subscription of IPO (by using a different sub within the same holding to subscribe in an IPO) come from (has its deep origins in) your original seed funding of 10 MM$, so there is no undue advantage.
The plane transfer hack is more like an emergency funding system. What I want to achieve, is a way to actually benefit from the investment.
Why does a company need to be public, in order to pay dividends to the holding ? It would make so much more sense if we could just tick a "Pay dividends to holding" checkbox of a subsidiary settings page...
After all, dividends is a fundamental feature of any LLC, Gmbh, Oy, Ab out there ;-)
Yes, this works and is legal.