SAN FRANCISCO — Facebook CEO Mark Zuckerberg spoke out publicly on Thursday on why he and wife Priscilla Chan established a limited liability corporation to give away 99% of their Facebook shares over the couple’s lifetime in a bid to solve some of the world’s most complex problems.
Setting up an LLC, rather than a charitable trust or personal foundation, to distribute the massive wealth, currently valued at $45 billion, allows for more flexibility, Zuckerberg said in Facebook post. He denied the corporate structure allowed him to dodge paying taxes.
“By using an LLC instead of a traditional foundation, we receive no tax benefit from transferring our shares to the Chan Zuckerberg Initiative, but we gain flexibility to execute our mission more effectively,” Zuckerberg wrote. “In fact, if we transferred our shares to a traditional foundation, then we would have received an immediate tax benefit, but by using an LLC we do not. And just like everyone else, we will pay capital gains taxes when our shares are sold by the LLC.”
The Zuckerberg Chan initiative is set up as an LLC, owned and controlled by Zuckerberg. Philanthropy experts say the corporate structure gives the couple greater latitude and flexibility both in the investments they make, from funding nonprofit organizations to making private investments to taking public stands on public policy issues, and in the activities they engage in. The couple will have the freedom to lobby lawmakers or engage in other political activities and will be able to more easily enter into joint ventures with for-profit organizations.
Zuckerberg also responded in the comments to questions or comments from Facebook users on everything from the LLC to paternity leave.
One user wrote: “Just a way to get your billions tax free … Yeah well done.” Zuckerberg responded: “This isn’t correct.”
On paternity leave, he wrote: “I love telling her stories and reading her books, even though she doesn’t understand them yet
Last month, Zuckerberg said he would take two months of paternity leave after the birth of his daughter. Max was born last week.
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