Starbucks has not paid UK corporation tax Case Study

Starbucks has not paid UK corporation tax - Case Study Example The legitimacy theory is also associated with social perceptions directed towards organizations in regard to their responsibility to meet societal expectations and social rules. In some instances, when these institutions do not meet social, legal as well as environmental benchmarks of operations, they may be exposed to sanctions and or even being barred from operations. Starbucks is one of the current companies that have shown a violation of the requirements of the Legitimacy theory. The Company is currently facing a court case in London. Starbucks is a major restaurant in Britain, the Company has been facing a serious allegations in regard to tax avoidance. Additionally, the Company has been controversies in regard to the information that it has been providing to the Investors. Apparently, a recent publication by a local newspaper in Britain indicated that the Company has been informing investors that it is making profits while in the real sense it has been experiencing losses. This has been perceived as controversial owing to the fact that the company has been providing different sets of information to its investors and taxmen. Research has indicated that over the last three years, the company has not made any profit and has also been avoiding taxes. This has created a negative image on the company, especially among the local British populace. The Company’s problem emerged from the issue of tax avoidance coupled with provision of controversial information to its investors as well as the taxman. From the year 2008, the company is reported to have made losses amounting to 26 million Britain Pounds. On the other hand, the Company’s Chief Financial Officer was providing controversial information to its investors as well as other members of the public. The research also indicated that the Company had not paid any taxes for a period