Inverworld, Inc., et al. - Page 7

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               To establish an offshore corporation or trust for a client,            
          a promoter in Mexico completed a form listing the client’s choice           
          of jurisdiction, and in the case of an offshore corporation, its            
          name, and the names of those individuals to be appointed                    
          directors.  The form was then sent by the promoter to INC, which            
          passed the information to outside lawyers or fiduciaries                    
          qualified to perform the necessary paperwork in the chosen                  
          jurisdiction.                                                               
               The incorporation package completed by the lawyers or                  
          fiduciaries was then returned to INC, which returned the package            
          to the client in Mexico.  LTD's role, through the promoters, was            
          to provide the counseling on the structure and features of the              
          various incorporation options.  Board of directors' meetings for            
          at least two companies incorporated by LTD clients were held at             
          INC’s offices in San Antonio.  LTD's clients used as their                  
          address the address of INC’s offices in San Antonio.                        
               Clients establishing an offshore corporation or trust were             
          charged fees for the service, which were paid out of their                  
          accounts.  LTD charged the clients an "opening expense", which              
          consisted of LTD's fee and fees for third party lawyers and                 
          fiduciaries, and an "annual expense".  LTD’s direct costs were              
          its payments to the third party lawyers and fiduciaries, document           
          fees, commissions, and "incorporation expenses".  The gross                 
          receipts and direct costs relating to LTD’s "Client Incorporation           
          Fees" for each taxable year are as follows:                                 




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