Tips for linking shell companies to their secret owners
gijn.org
gijn.org
The amount of information regarding beneficial ownership that’s out there varies by jurisdiction and entity type - and again, these tips are great ways to dig into those and quite likely come up with some interesting findings in a lot of cases - but in most cases a Delaware LLC is basically a black box.
Pursuant to M.G.L. Chapter 156C, §48, a foreign limited liability company doing business in the Commonwealth must submit to the Corporations Division within ten days after it commences doing business in the Commonwealth, an application for registration as a foreign limited liability company ...
I don't know what the privacy laws for foreign entities in registered in MA are (if any), but I suspect not the same as say Delaware. If you have a footprint in more than one state, you may be required to file as a foreign entity in multiple states.
[0] https://www.sec.state.ma.us/divisions/corporations/filing-by...
How/why is this true? IMO it should be straightforward to find the owner/director of a US based corporate entity.
[1] https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX...
And once a lot of finance is flowing through a country, I'd expect some sort of interplay with political influence to happen.
In general this is true but if you are one of the few tax havens in the world then you have so much money going through that a very small percentage tax adds up to enough money to keep your citizens quiet. This only works locally though. Globally, other societies are getting screwed.
I do not know whether this system exists anywhere, but it is possible.
Hate it when you are the 6/7 (actually much more) of mankind on the other side of the gun.
Sorry, but i hate these shrug "but it has some benefits" reactions. Without a perceived moral high ground, your military is useless, ask putin, and your displayed lacking critical stance is the ever green substrate for that.
Sorry again. Whenever i see such pro/indiffernt US foreign policy posts, i see the next war coming and i feel urged to reply.
With that said, I think most everyone agrees that a chain of command exists, with its apex in duly constituted civilian authority, that authority substantially if not overwhelmingly mandated with the consent of the public.
We do this. We fall for the propaganda, we spend more time concerned with joining a small elite than throwing their worthless asses out in the cold. We vote for these people or fail to vote for others. We fail to speak up a little bit each and shift the entire burden on the few magnificent bastards who do take on city hall.
Anyone doing any “typical” amount of anything (including your humble commenter who is at or near the front of the queue on not doing enough relative to privilege) is at best not helping: the status quo is extremely bad and it exists because we lack either the clarity or courage to so much as boycott a big corporation, let alone an entrenched special interest, soft money capture ratchet.
The armed forces of the United States, with some exceptions notable enough to be scandals, are carrying out our collective agenda.
Let’s at least be honest about where the buck stops on this. I know I’ve failed in my civic and human duty to object effectively enough, often enough, and fearlessly enough. The least I can do is acknowledge that I among many stood by and watched while it all went to hell.
I'd need some very good evidence before believing this for any country, not only the US. The people's interests haven't been in the equation for quite a while now. This phrase only works if you replace "our collective agenda" with "the agendas from the rich and powerful".
The typical counter-argument is that we indirectly choose our representatives, but that's a naive take at best. The only people with real power in a capitalist world are the ones with... a lot of capital.
Even if we are being moralistic and transparent; for some countries, being tax-free is their only competitive advantage. Instead we are now to assume that tax-free jurisdictions are evil and should be abolished. Might as well just restart colonialism; at least colonial countries got to be part of the big trade.
If your country's only advantage is to steal tax money from other countries, or provide cheap energy by burning coal, or cheap labor by using slaves, then it's perfectly fine to isolate that country to force it to stop. We obviously shouldn't just accept that everyone is worse off just so that a country with no other advantage can thrive.
Your assumption seems to be that countries have a right to someone's productivity even after they emigrate elsewhere.
Care to actually defend this point?
Only for non-residents though. So you can't have a green card, or US citizenship, and you have to stay well clear of the Substantial Presence Test (https://www.irs.gov/individuals/international-taxpayers/subs...).
it is fundamentally and deeply inconsistent to support consumer privacy except for joe six pack’s LLC for his general contracting business
financial privacy is hugely more important than google knowing whether i buy tide or downy
Those aren't the same at all. An LLC is a privilege created under state laws and it's perfectly reasonable for those states to require records that the public can access in exchange for that privilege and the benefits it offers.
Having consumer privacy is good for the American public. Having access to know who owns an LLC is also good for the American public. Perfectly consistent.
> While often partly obscured by secrecy jurisdictions — such as the British Virgin Islands, Panama, Cyprus, or Cayman Islands …..
I wish people were in a place to see where the ICIJ is misguided, like they play into a sentiment that is widely shared but heavily misunderstood
For example, the Cayman Islands was assumed to be super secret and shady and then the results of their information sharing agreement came out and it turns out the Delaware was waaay more heavily used and way more secretive. Jumping the US to the least transparent jurisdiction…. Up from spot number 2.
All this offshore money hiding stigma is capturing the minds of people that are being intentionally mislead. Not by the ICIJ theyre just as misled. just the collective apparatus of a more powerful state that does protectionist things for its own industries against smaller nations states. The US has difficulty bullying its constituent member states, and directs all of that angst outwards to anyone competitive, while the US is a bigger market participant in the same behaviors the whole time!
for both foreigners looking to hide ownership and money, and citizens, the US onshore offers a catalogue thats at parity or superior to financial services microstates, and flies under all scrutiny
Ugland House in the Caymans. 10,000sq ft, 5 stories. Registered offices of forty-two thousand companies.
Corporation Trust Center at 1209 North Orange Street, Wilmington, Delaware, United States, "home" to over 285,000 Delaware corporations.
straight from ICIJ itself "US lands top spot as world’s biggest enabler of financial secrecy in new index"
https://www.icij.org/investigations/pandora-papers/us-lands-...
> Meanwhile, the Cayman Islands, which ranked first in 2020, dramatically dropped to No. 14 in this year’s index, after disclosing new data on the financial services it provides to foreigners.
in reality, it should have always been No. 14 or assumed to be operating the way it was, and it was just assumed to be far bigger and shadier than reality. where no information is assumed to mean bad information. that's just not the case. there are robust domestic ways to avoid claims on assets and money even from tax authorities, stigmatizing the entire offshore industry is just protectionist mentality.
Basically it’s a requirement to have someone available as a point of contact for the LLC - typically name, phone and address for mail. This is to ensure that should the LLC need to be contacted, someone is available.
It can be a hassle if you list the owner or an employee as people come and go and companies can be bought and sold. You can list the owner, but it is there responsibility to make sure it’s constantly up to date.
Registered Agents offer a service to act as the Agent on behalf of someone else. The Registered Agent will make sure the phone and address is always up to date and there is always someone on the other end to respond.
It’s basically a “go between” as a service.
So why would anyone be surprised that 40,000+ businesses all use the same agent?
Are we talking 'primary place of business' or 'address of registered agent'?
Two very different things. There are entities that basically act as centralized places for service of process - just like banks act as centralized places for financial transactions, etc.
In a political/economic context, those are not "identities" but distinct roles in a power structure. Their political and economic interests are different and often fundamentally opposed to the extent that they're canonically considered two disting classes: working class* and capitalist class. It is ridiculous to consider them mere "identities."
It massively simplifies reporting requirements. If you’re forming a Delaware entity, you file and go.
There are so many ways that a person can be the beneficiary of a corporation that is not technically "owned" by them, depending on how you define "own". Does the corporation issues stock? Do they have investor agreements? Is it just a loan agreement? You'd have to register all those different documents. Follow that all the way down and you eventually have to register all assets and cash.
In the end, there's very little legitimate legal reason to have to know precisely who controls an asset or cash, so long as someone is responsible for the public obligations of taxes, unless there has been some crime.
skeptical of the "good" qualifier.
It would mean no privacy for anyone.
Some do, some don't. If you make that statement in the context of an actual group of persons it's an example of bigotry. (And a corporation is an actual group of people people.)
Some corporations are composed of one or few people who are all not sociopaths and are very much social contributors. As with a race, gender or religion it isn't fair or accurate to tar them all with the same brush.
The arms-length principle is not literally a requirement to be unrelated. It is a requirement to act that way. If one brother sells another brother a moving truck for 40000 USD, it is an arms-length transaction. If he sells it for 1 USD, that is not. It's a non-arms-length transaction because of the value, not because they are brothers!
In some of the cases you mention, it's difficult to assess fair value even when it's determined by an arms-length transaction, so the sudden disclosure of a relationship would not make it at all straightforward to take anyone to court over it.
The commercial property without a tenant for nearly a decade isn't worth 40k USD / month. When you say "...these two companies signed a contract that values it at that figure as collateral for a loan...", you are describing fraud. That could arise not because of any plan of fraud prior to the loan agreement but because of one formed during it!
If people own things in their own names, they're welcome to reasonable privacy. But the corporation is a special government program to enable certain kinds of collective action because we get broader economic benefits from things like the ability to limit liability. If people want special government support for financial activities in the broader economy, which is what corporations are, then I say key information should default to being public.
If people don't like that, well, they don't have to use the government program. But like any government program, I think voters should have enough information to be sure that it's not being misused.
What about private corporations?
And there's really no such thing as a "private corporation". The whole point of a corporation is to get government recognition for acting under another name. But assuming you're referring to companies so closely held that they're not not publicly traded, then yes, absolutely, ownership should be a matter of public record. I just recently filed for a CA LLC and my name is listed for all the world to see.
The thing you're failing to realize is that the concept of "ownership" and "benefit" aren't black and white. There are stockholders, investors, beneficiaries, members, clients, subscribers -- they all have at least some level of benefit from a company or organization, and depending on how it is organized, they may have some direct control or liability of it as well.
What you are asking for is mandatory violations of privacy with no legitimate purpose. It's the kind of "if you've got nothing to hide, then you shouldn't be worried" type of mentality that typically isn't tolerated elsewhere.
This is a huge government support of investors. It has some societal benefits, which is why we do it, but it's often abused. The notion of "privacy" when people are taking government-supported action in the public sphere is nonsensical. If people have a legitimate purpose for trying to dodge liability and responsibility for their actions, I think having that on the public record is a minimum.
Would it eliminate shell companies? No (and at the end of the day, dedicated fraudsters will just forge documentation to lie about control/ownership anyway). But it would definitely reduce their usage, which I believe would be a net benefit.
Its easy to forget that the US founding fathers wrote anonymously - including the federal papers.
Time will show which constitution outlasts all others.
Figuring out who actually controls it is nearly impossible.
https://www.delawarebusinessincorporators.com/blogs/news/ben...
"A. 3. Under the Corporate Transparency Act, who can access beneficial ownership information?
FinCEN will permit Federal, State, local, and Tribal officials, as well as certain foreign officials who submit a request through a U.S. Federal government agency, to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement. Financial institutions will have access to beneficial ownership information in certain circumstances, with the consent of the reporting company. Those financial institutions' regulators will also have access to beneficial ownership information when they supervise the financial institutions.
[Updated January 4, 2024]"
https://www.fincen.goc/boi-faqs
That includes prosecutors and courts.
After an authorised person obtains the information on beneficial ownership from the FinCen database, can they transfer it to their agents. If they share the information with others then will they, in every instance, bind those agents to appropriate obligations of confidentiality. What is the penalty if the information gets leaked, accidentally. If it is leaked, then what incentives are there to pursue enforcement. Arguably, for those affected, it's too late. The information has become public. There is no way to put the genie back in the bottle.
https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X/p...
This reporting requirement is relatively new. Maybe it really changes nothing. We shall see. But the number of parties who potentially have access to information about Delaware LLCs has increased, IMHO. At this point, is it even possible to know who might have it.
What’s the Matter with Delaware?: How the First State Has Favored the Rich, Powerful, and Criminal—and How It Costs Us All
https://press.princeton.edu/books/hardcover/9780691180007/wh...
Also it will almost impossible to link WY LLC with proxy ownership. Much of what really matters are hidden being the wall of client attorney privileges.
Others will be an top executive at one company, and also serve on the board as an advisor of a few other, non-competing companies (usually non-competing).
Those are probably the most common scenarios where some one would serve on multiple boards.
Thanks for sharing.
It's the writeup he has in the "why" section that blew me away. A very sober and deep analysis of why we are where we are and what might be done about it.
This, I think, is a fairly key differentiator between valid and invalid use of incorporation. If a company doesn't do any business, then it shall not have a right to exist as it has no reason to exist, as the reason companies exist is to do business.
One may argue there are other reasons a company may exist, but I'd argue those reasons only exist as an unintended consequence of the ability to exist as 'shields' or 'cut-outs' as discovered by those familiar with the peculiarities of international law and accounting/finance.
Any company, including shell companies, will have business activity on paper. In other words, there are invoices, financing or a combination.
This is why it’s difficult to define shell companies. A more realistic proxy is to look at the ratio of employed people by the particular entity to revenue or some other financial metric.
Most shell companies don’t have many employees while the financial figures might be huge. Again, this might be a bona fide structure as part of an international holding but at least you have an objective filter as a starting point.
One typical use of shell companies in mineral exploration is to obfuscate regions of interest from the prying eyes of competitors.
If some wants to gather lease ownership of a large number of small leases in (say) a province of Canada then it's a matter of public record that mining|exploration leases change ownership in public records.
The end goal here is to publicly declare ownership after exploration results (geochimistry, prelim drilling, etc) have been assesed by third party technical reports and put a prospect on the stock market to attract investors. This gets a bit complex when someone else owns a band of rights dead centre through your ROI.
This is a use of shell companies that's distinct from hiding assets from taxation, it's obfuscation for the purpose of getting ducks lined up before going public.
https://www.spglobal.com/marketintelligence/en/campaigns/met...
get around such things through the power of cross referencing. Initially with a lot of manual trawling through microfiche records, later with computer assistance and digital records, recently with fully automated approaches.
As to the existantial nature of your question, you might try The Evolution of Resource Property Rights by Anthony Scott, perhaps look back to Roman Doctrine and how their laws carried forward in Western civilisation, look to Chinese history, etc.
There's a brief narrow overview of some of that here: https://www.pheasantenergy.com/mineral-rights-history/ and a whole lot has been written about "The Commons", etc.
The intent of the regulations is to record who is searching for what and where (ie. can be contacted and are responsible for property damage, spills, destruction, etc) to have one prospecter per parcel, etc.
Can you point out a country where it is explicit that the intent is that (say) Rio Tinto has to directly list head office on every lease in the country and cannot spin off a copper division, an iron subgroup, a rare earth exploration subsidiary, etc?
- International holding companies: if there is Coca Cola France and Coca Cola Germany that economically belong together, you might not be able to just merge them into one entity for legal reasons (both countries might require you to have a locally incorporated presence). So to ensure that both always have the same owners, you create an international holding company that owns both of them.
- Investment funds: investment funds (especially passive ones) are companies whose only business is to own shares in other companies. There is no "real" operating business.
- Feeder funds: sometimes, the law requires foreign investment funds to create a local shell company to be allowed to accept investments from local retail investors. In this case, the only purpose of the shell company is to fulfill local regulatory requirements with regards to the legal form if the investment vehicle and to provide investors with someone local that they can hold liable in case things go wrong. There is no real business in such companies.
In fact, it is often regulation that requires you to create shell companies. If you want to get rid of shell companies, you should start by removing regulation that requires the creation of shell companies with no real business except to satisfy the regulators.
I.e. an indicator not really following the spirit of the regulation, only the letter?
Additionally, as the owner I must have up-to-date contact information in a public registry, have at least one employee, and rent a physical workplace where I can receive mail. Officials come by to check once in a while.
I think at worst I've gotten a few extra spam calls from all this, but not even that many. On the other hand, I use the registry to look up companies before deciding to sign a contract with them. A couple of times this has saved my clients or I from being the victims of fraud. I really don't mind it as far as systems go.
Anyway, I agree with you, and for the legitimate cases where "companies that don't do business" make sense, maybe we should create some other instrument to handle them -- because like you, I find that there are a lot of cases that don't make sense.
edit: ofc this is what the whole article is about, ive calmed down and read it now :D... still, dont know why these things are allowed to go on
edit: perhaps i wouldnt like my bank balance published... that may make some individuals targets. in thinking about it perhaps i would prefer financial "transaction" transparency. then we would have to guard against huge cash transactions tho somehow. its clearly a difficult topic but its also the source of a lot of the worlds corruption and misery.
Credit scores are a good example of a financial privacy violation used to keep the poorest poorer. When the data leaks and people suffer waves of identity theft a slap on the wrist is issued and 5 free years of credit monitoring are handed out. After year 6, well it's the consumers responsibility to pay for that, not the financial data hoarders.
Policies need to change
#1, someone who filed the formation paperwork, which can literally be anyone.
#2, a registered agent who will receive mail or an in-person courier deliver for the LLC so it can be sued. This service can be also be provided by literally anyone.
If fees are exchanged for #1 or #2, the payor might be an owner but that’s not guaranteed and the provider doesn’t have to disclose that either.
Actual ownership will be on documents the LLC owner maintains custody of and which can be kept private. They only become relevant if the LLC is sued and ownership is part of the question of the lawsuit. Even then, the LLC can be represented by attorneys who may keep the owner’s identity entirely private.
shell companies are just companies, suppose the vast majority of which are formed for perfectly normal reasons,
If they can have "free speech" and are "legal persons" then the public _surely_ has an interest in knowing who is benefiting (the ultimate beneficial owner) from that corporation's actions.
Would it be in the public interest that their identities were revealed and the lot be killed by the King ?
If sleeping with someone was a taxable event, would that mean that it's OK to spy on people's bedrooms? After all, it's in the public interest.
In principle, I think that taxing only land ownership and pollution is the theoretically fair way to do taxation. And land ownership doesn't require obtaining any data that isn't necessarily known by the government in the first place.
It would be immoral to make sleeping with someone a taxable event. And therefore immoral to treat it as a taxable event.
And by removing the privacy of corporations you’re just removing the privacy of people within it.
To put it differently, they're not groups of people, they're a distinct legal "entity" that can then be fractionally owned by people while shielding them from whatever it's doing.
This gives it special powers, you can't arrest a corporation or send it to jail. It can act against the will of some of its fractional owners, it can own its own property, and it can legally participate in electoral politics, beyond how any or all of its owners are legally able to participate.
So by reducing the privacy an LLC provides, you are reducing the privacy of individuals.
No different than say banks keeping account owner information private.
The fact the News cycle quickly forgot about who the Panama Papers exposed... proved there is a deeper cultural issue in North America.
This has been going on for over a century, and it is foolish to think one could stop someone's full-time job hiding wealth. =)
That’s not a thing.
One should get a well paying job in Monaco.
Perhaps things are more transparent now, but I doubt it... =)
Only posers build a private bank in the Cayman islands.
Socialism is concerned with distribution of resources to satisfy human needs, and bring about an equitable society. But those needs are material needs, and the equality is material. It's not about redistributing spiritual or intellectual resources to make everyone equally spiritual or smart! It's purely about keeping everyone warm, dry, in good health and with a full stomach.
The only non-materialistic aspect of socialism is the meta level: choosing equitable materialism over inequitable. The idea that all people deserve to be reasonably well off is a different form of materialism from "I want me and my family to be well off, screw the rest" that represents much of capitalism. Socialists regard themselves as supremely virtuous due to clinging to this idea of equality. It is almost religious. There are obvious links between equality in socialism and in Christianity. The proper socialist is like a disciple of Jesus who has renounced everything spiritual, and just remembers the stories about healing the sick, feeding the multitude, and "render unto Caesar the things that are Caesar's".
It's both preventative, and it also becomes another easy to prove charge against people circumventing it.
Red Alert
Alert: Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)
Updated March 11, 2024
On March 1, 2024, in the case of National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.), a federal district court in the Northern District of Alabama, Northeastern Division, entered a final declaratory judgment, concluding that the Corporate Transparency Act exceeds the Constitution’s limits on Congress’s power and enjoining the Department of the Treasury and FinCEN from enforcing the Corporate Transparency Act against the plaintiffs. The Justice Department, on behalf of the Department of the Treasury, filed a Notice of Appeal on March 11, 2024. While this litigation is ongoing, FinCEN will continue to implement the Corporate Transparency Act as required by Congress, while complying with the court’s order. Other than the particular individuals and entities subject to the court’s injunction, as specified below, reporting companies are still required to comply with the law and file beneficial ownership reports as provided in FinCEN’s regulations.
FinCEN is complying with the court’s order and will continue to comply with the court’s order for as long as it remains in effect. As a result, the government is not currently enforcing the Corporate Transparency Act against the plaintiffs in that action: Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024). Those individuals and entities are not required to report beneficial ownership information to FinCEN at this time.
Update [March 11, 2024]: This notice was updated on March 11, 2024, to reflect that a Notice of Appeal has been filed regarding this case.
It's very sad to see commenters here fail applying the same principle to both.
I have an answer to that, but instead of going down this route, I want to ask you: do you want to defend you right for privacy by coming up with uses that other people would find "legitimate"? Or do you want the right for privacy by default, without having to defend yourself in such a way?
I don't think the two are comparable, and just applying "are technologies to achieve privacy, and both are sometimes abused by bad actors" to both as if that's the start and end of the discussion is surprisingly dismissive.
The 'scope' of encryption is fairly limited in comparison to the scope of a company that can operate under the directorship of a person or persons who are entirely protected from any legal responsibility for the actions of said company.
I may be blinded by personal bias, but I just don't see but the most marginal comparison of these two concepts.
Huh, because the public can’t look up who the beneficial owners of a company are despite mean the company has any ability to avoid its legal obligations
Officers of a corporation are different from owners. Typically the role of shell corporations is to hide owners.
If someone who uses encryption also does bad things, the bad things are the problem, not the use of encryption.
The US Govt asserts jurisdiction over companies that do business with US entities, even if said companies don't do business in the US. As a result, many "not US" companies won't do business with US entities.
One solution involves a shell company outside the US set up by a US entity. That shell company then does business with the "not US" company on behalf of said US entity.
This is not a scheme to evade any law. Like any other company, the shell company is responsible obeying the laws of the country where it is based as well as the laws applicable to dealing with the "not US" company. Similarly, the US entity is responsible for obeying all applicable laws wrt its dealings with the shell company.
Yes, the US govt can go after the shell company but that doesn't reach the "not US" company.
Trusts in general are simply good estate planning compared to probate costs, at least on the topic of real estate holdings and titling.
the default for normal people is for all of this data to be public unless you can either navigate bureaucracy (costs time and money) or pay someone to do it for you (costs money)
To address inevitable replies: No, I don't know exactly where the line is (or lines are - it should probably be a tiered system), and I recognize defining those lines is itself a position of immense power. Those are solvable problems though and don't make the idea bad. (It could still be a bad idea, but for other reasons.)
It's in the public interest to understand what very powerful people are doing , because the public are usually getting the short end of the stick- this should override any ideology regarding 'privacy', 'freedom' and other fuzzy words (not that some interpretation of these things isn't also important)
Pseudonymity is perfectly valid, but there needs to be efficient, effective, and crystal clear means to pierce it and find the actual humans making the decisions with intent when there is a legitimate and well-supported legal need.
There are enough high profile cases of shell corporations being used for unsavory and explicitly illegal behavior, to the extent that it is literally a meme, such as the crimes unveiled in the Panama Papers [1] that simple and robust mechanisms to prevent abuse are warranted even if abuse is uncommon. It is not like being able to pierce the privacy with a court order is even some new mechanism, you can already do that, it is just expensive, time-consuming, and difficult if they fight.
It is then easy for you to take the first step in the cost-benefit analysis you wish to do by estimating the costs. The proposal is that a court order demanding disclosure, which are already routinely issued, can not be stalled indefinitely through the application of lawyers. So, all you need to do is identify the balance of cases where disclosure is fought and then see how often the disclosure results in illegitimate harm to the disclosed party versus how often it results in the discovery of legitimate harms caused by the disclosed party.
The disclosures in the Panama Papers alone resulted in 1.2 billion dollars of recovered taxes [1]. So you can compare the estimated costs against the benefits of preventing a singular incident for now. If you can present credible evidence that the harms of requiring disclosure on legitimate court orders is in excess of that, then a broader analysis of the problem size if warranted.
[1] https://www.icij.org/investigations/panama-papers/panama-pap...
> frequently abused to not only protect privacy, but to protect against legitimate legal need
Shell corporations are used for unsavory purposes being a meme is not proof of this as was implied by your other comment. Also 1.2B in taxes is pocket change so it doesn't really help your point.
As much as the wealthy rightly get shit on for various things, they are still entitled to the same rights as everyone else.
Has there ever been a time when the wealthy had less rights than the poor?
The speeding ticket fine which is charged as a percentage of ones wage comes to mind.
https://www.theguardian.com/world/2023/jun/06/finnish-busine...
And no, generally the more rich and/or powerful you are the more rights society provides you. Even countries which strive for more equality simply try to shore up the most egregious instances but there’s always a difference. That’s because not all rights matter equally to everyone.
For example, rich and poor both don’t have the right to sleep on a park bench but in practice that right is only particularly relevant to one party.
That's an interesting view. One could argue that a flat fine allows rich people to break the law more, because they can afford it. Which IMHO seems pretty unfair.
If any billionaire wants all the "extra" rights of being a normal citizen I'd be glad to swap anytime.
Who runs a corporation 100% should not be a secret, ever.
I'd argue instead that the public's need to know sometimes outweighs an individual's right to privacy.
But in any case, even if privacy was broadly recognized and protected (it isn’t, otherwise the government wouldn’t be allowed to buy your information from data brokers) that still leaves open the question at hand.
You said that the rich are entitled to the freedoms as anyone else but shrugs off that only the rich have the effective means to make use of these instruments. They are quite capable of being completely invisible to public scrutiny by holding all their assets as an individual.
They choose to take steps to leverage opaque often intentionally complicated corporate layering schemes to minimize risk, skirt (legally or not) tax, or to layer the sources of bad money.
Whatever the reason for engaging in these games, I believe they are no longer "living life like every citizen deserves privacy" (note your comment spoke of total privacy from oversight which no citizen pretty much anywhere actually has).
I'm at least happy that my home of Canada is starting to chip away the corporate veil.
A tangent, but this is in and of itself completely nuts. One should be able to read the text of the law, as written, and understand what you are and are not permitted to do - end of story. There should be no need to look at precedents. Courts only recourse if a law is unclear should be to send it back to an elected legislature for refinement.
However, note that the CRAs information collection did not make your personal bank account information public. Would you prefer that it had? I used the example of a blind trust here because "non-blind" trusts are one of the common uses of non-commercial corporate entities.
Also, I never once said "total privacy from oversight", all these corporate entities already supply financial and ownership information to the government, whose job it is to hold them to account. This is not the same and making information public so a rabid mob of people can enact vigilante justice, or whatever people like you hope comes out of it.
The wife passes away.
1. Should her husband pay tax on her share of the house when it passes to him? Assuming these are not wealthy people, this may force the sale of the house.
2. Should the house go through probate? Should everyone move out while that happens?
The old man wants to leave the house to his son.
3. Should the son pay tax on the house when his father passes away?
4. Should he move out while the house goes through probate?
It is because of cases like these that we have ways to avoid going through probate.
How does this hurt anyone though? That is not clear at all. The thing you're upset about here is that blind trust members information is reported to the government, but with no clear statement how this hurts anyone, wealthy or not.
Chances are, the information turned over the government has anyway.
If this is a legal mechanism to circumvent probate taxes, then its not a problem. If not, well, even regular people should pay their taxes, no?
Taxes aren't an ethical or moral topic, they are a legal topic. If you can avoid a tax through some legal structure, you are within your rights to do so and you can't judge this as some sort of shady business. Taxes are mostly used to create incentives and collect money, if people are allowed a legal structure to avoid a probate tax, then that might be an incentive on purpose. Just because you did something to pay less taxes does not mean that you are some bad actor exploiting a loophole.
For example, taxes are only paid on profit, so companies are incentivized to spend their money and pay less in taxes. No one sees this as a legal loophole that needs to be fixed, it is very much intentional.
Also you are making the false dichotomy here of "regular people" as something different from "somewhat versed in financial entities people". That's weird.
Sure you can. Legal tax avoidance gets judged all the time. See the Jimmy Carr tax "scandal" that was legal, and yet he received public pushback.
Allow me to make it clear.
https://www.smithsonianmag.com/history/1938-nazi-law-forced-...
If someone wants to argue you shouldn’t have to register things with the government I’m all ears but it is no way comparable to what the Nazis did.
Think about what it would mean that anyone could, at any time, look up all the investing choices of anyone in the country.
It's totally a thing to have trades pegged to US politicians' investment choices, because they often have the knowledge not available to the public to make "better" (financially) decisions.
As per your first comment, this is generally the difference between an active and passive investor which usually works out to someone who owns about 10% of any given company. It's probably a little too high as it isn't hard to imagine a cabal of 11 wealthy tax dodgers playing games with the reporting requirements.
I believe most laws getting enacted which are addressing corporate secrecy are primarily targetting the active owners of companies and usually unnamed beneficiaries who have a benefit to the company/trust who aren't specifically owners, who can reap the benefits of the company's assets without strictly their name of the deed so to speak.
Again, most of this revolves around what is asked by government officials for auditing and less about what information is being dumped into public information.
Some states allow you to claim anonymously, while others don't. For those that don't, you may be able to claim under an LLC, with your name and address "hidden".
Edge case, but I think it's legitimate.
We're not talking about individual assets though here – we're talking about the distribution of resources in our society and the people who own these resources have power over lots of other people.
Essentially - have US$1bn is structurally different to owning US$1 million.
Also, "It's 100 legal" is a pretty hilarious rejoinder to someone discussing changing what is legal.
Any offshoring calls that into question.
> they are still entitled to the same rights as everyone else
No, they're entitled to more because they can afford the services of those who can setup shell company structures to hide their wealth and their identities.
Unless they want do that, they can endure extensive scrutiny.
The owners of an abortion clinic, or a store that sells fur coats, or a therapy practice for the criminally mentally ill, all might have good reasons why they’d like additional privacy.
Further common situations involve trying to keep details out of the public record because they can be abused by bad actors; ones who may be looking to spam you, engage in a frivolous lawsuit, or personally harass you/your family. At least these are some of the scenarios mentioned by companies that do asset protection.
Edit: In regards to harassment, think about the abuse retail, fast food, or other customer-facing employees endure for perceived slights. It feels easy to understand why average small business owners would want privacy and to keep things in legal channels. Personally, I think the government knowing who's in charge (Corporate Transparency Act) is a good halfway point, but it's not unrealistic to be concerned about leaks or abuse with that system.
A more wealthy individual has no such privacy. Their wealth is not truly wealth and not truly theirs, it is fundamentally a trust-us IOU from a bank or a stockbroker which is shared with all kinds of parties, a publicly visible number on the screen which at any second could turn zero or negative on the orders of a corrupt official or due to a buggy algorithm or mistyped name on a sanctions list.
The more wealthy individual yearns for a glass jar - but no jar is big enough to hold the sums the more wealthy individual operates with.
Hence, shell companies.
Have you formed an entity? In Delaware it’s file and go. You don’t need a lawyer nor to fill out a bunch of paperwork. That’s efficient. Where we demand disclosure is when that entity touches money through the banking system.
On the same website, there is also apparently the following article:
"Following the Money, from Laundromats to Central Banks"
(by Laura Oliver, September 25, 2023):
https://gijn.org/stories/following-the-money-from-laundromat...
Potentially related:
Wikipedia article on Monetary Policy:
I often see advertisements for incorporating offshore but there is no legitimate way to know which are authentic and which are just skimming on top of what you can do by yourself.
It's quite fascinating enough that I need to hire a CFO or someone specifically familiar with IBCs
Non-public or public figure who doesn't want their name associated with certain business activities that they partake in.
I'm not a public figure and I don't want where I sleep posted all over the internet. I don't have the budget for security if some Twitter fool decides to give me a death threat because of a comment.
Why not install a camera on your toilet while we’re at it?
Or do you have something to hide?
This is definitely not true. Locks are to keep randos from invading your space — drunk, drugged, and/or mentally unhealthy people end up in the oddest places sometimes. My buddy had a guy high on meth open and climb through a laundry room window and start wandering through his house. I’ve twice had drunk people knock on my door loudly and try to let themselves in (different cities) and swear that they were at the right address. These were all in decent/nice areas (some not so nice areas a mile or so away, but still…).
Same with privacy corps…
You don’t want some rando who is irrationally angry at your business or at you to be able to find you easily.
You don’t have to be as famous as Barbra Streisand in order to be a person of interest to mentally unhealthy randos.
Just my 2 cents…
I make it pretty hard, actually.
From what I can gather most houses of public figures are already known.
Imagine that you own and run Acme Critical Publishing, which publishes exposés of crimes and ethical lapses of the sitting President. In speeches, he starts rambling about your company as an example of Horrible Very Bad People, and the next thing you know some supported of his casually looked up your home address online and now there are burning lower-case-t's on your lawn... I'd say the republic and accountability are both suffering in that scenario.
It's one of those "tools that can be used for for good or evil" things, and simply prohibiting the tool isn't necessarily the best way to maximize the good while minimizing the evil.
Neither of these failures have anything to do with the anonymity of company directors. The President could know you personally, and still leak your address. Similarly, there could be a mob vandalising your property even if you didn't run Acme Critical Publishing, because that kind of thing happens in riots sometimes.
In some countries there is almost no anonymity on the public record, but this doesn't seem to negatively affect the level of violence in their societies compared to otherwise comparable locations. Therefore I would opine that 'enjoying safety' and 'enjoying privacy' are two very different and mostly orthogonal issues.
Hold up, I didn't say anything about a riot, let alone a physical gathering. Just the contents of a speech where your hypothetical publishing company has become fingered as a target. It could very well be a video on a campaign-blog.
> the level of violence in their societies
The analogy isn't about violence, it's about kinds of damage to you (and to the republic) when the privacy is pierced, and violence just happens to be the most illustratively-obvious form of that.
There is no such legal requirement, right? What's holding the president accountable?
> the lack of a police response to disperse ominous gatherings before they become violent.
It's really not possible for the police to do this. Regardless, GP's comment was about one or a small number of people showing up to cause trouble. In reality, the police can pretty much do nothing to prevent this. If they could, there really wouldn't be any robberies or murder.
You try burning t's on the front lawns of politicians and see how quickly the police do exactly that. You seem to think it's a perfect crime and you could never be caught or held accountable. That's an insane view, but you're welcome to test it for yourself and see what happens. I think you might be surprised.
A lone person (or even a small group) could show up and cause trouble on anyone's property at any time. Why don't most people do it? Probably because police exist and there would be consequences. Should everyone have their addresses hidden from all people at all times? Why should a company have that protection and not you? What makes them so special?
I think it's far better to understand that transparency is important to our democracy and our freedom and that means accepting a certain amount of risk sometimes. The fact that someone, somewhere, might one day find out where you live is a risk almost all of us face right now. There's no reason for a privileged class of people who want to influence our lives and government while also hiding themselves from the public and accountability.
So, imagine if Trump exposed the contact info of people behind one of those groups showing anti-trump ads. His minions could use it as a signal to attack them.
We have been operating under these conditions since the advent of the democratic republic and to our good fortune.
Such a system requires a way to establish constructive notice. A taker for value should have known that the land he was buying belonged to another if its ownership was properly recorded at the time of the purported sale.
Mileage may vary in different jurisdictions. Recording office May vary according to property type under state law; e.g., DMV might record motor vehicle titles while the county recorder in the county of the property probably records real estate.
I’ve answered your question in another response.
A VC fund, PE fund, etc will often have a “manager” (the possibly big-name company that operates it) and a bunch of limited partners for that specific fund. If you own a piece of a BlackRock fund, for example, you don’t own BlackRock itself. And the corporate structure reflects this.
Also, Delaware corporations are very popular for many legitimate reasons even for businesses with no personnel in Delaware. But you still need an agent for service of process in Delaware.
I wish the states would allow designating the Secretary of State as the agent for service of process and paying a nominal fee for them to forward documents electronically. This would keep relevant information available to law enforcement and the courts, but it would avoid the need for paying mildly sketchy registered agents for their mildly sketchy services.
It’s not clear to me that there’s any sort of bright line between shell companies and any other sort of corporation, anyway.
A registered agent is, among other things, a services mailbox. And a “shell” company, whatever that is, isn’t necessarily offshore.
Many US companies, even very ordinary ones, incorporate in Delaware for various, mostly good, reasons. IIRC even YC strongly recommends this. Unless the company actually has an office in Delaware, it will use the services of a registered agent in Delaware to satisfy the requirements of Delaware. Then the company will register to do business in whatever state it’s in. Or it could break the law and not register.
The only funny business here is that, at least traditionally, there is no requirement to inform Delaware of the beneficial ownership structure of the company. This seems to be changing — the US is pushing back against companies with anonymous ownership.
The big question, to me at least, is why anyone expects bad actors to fill out fancy new forms correctly.
A related case is investors in or owners of a category of otherwise legal business whose relatives are targeted by nasty people for that fact alone. This includes businesses like coal and defense. Shell companies help shield themselves and their extended family from association with a business that attracts undue drama.
I think the goal is just not to leak information ahead of time, and perhaps to insulate the FAANG company in case anything goes sideways mid-deal.
The real question is, what legitimate reason do you have to know who owns a particular thing or asset. If you see a car parked somewhere, do you have a legal right to know who owns it? What about a lemonade stand? What legitimate legal reason do you have to compel people to register their assets?
It doesn't need to be available to the public at large, but should be available to those responsible for the jurisdiction that could be affected by that agreement.
Re: Car parked somewhere. If it has a numberplate, then there's a government agency that can track it's ownership (pending whether it's been registered to a company that then has some opaque international ownership structure).
Re: Lemonade stand. Minimum level of asset value for registration?
Because of the power differential between an employee who's given the responsibility of X versus a director/owner who threatened to fire said employee if they don't do legally questionable / flat out illegal thing in regards to X.
99.99999% of the time it's OK. It's those instances when it's not OK that it becomes societally important to demonstrate consequences for illegality.
I think it'd become a problem that governments around the world would prioritise if every individual conducted their private affairs through a shell company structure. I said elsewhere that doing so is going to be a potential retirement project of mine.
Don’t like it, don’t incorporate.
Would you use the same logic for everything else?
Yes to those things I would probably apply the same logic. Not the different logic you suggest. The same logic.
Nobody’s making anyone ask the government to grant them an LLC if they want to risk some money.
But if you want the public to grant you special protections for you and your investments, and to form from the void, for you, an entity that can act on its owners’ behalf and enter contracts and survive beyond its creators et c et c, it totally seems reasonable that the public should know who’s benefiting from that. Like, that’s the least that ought to be asked in return.
I think if someone asks the government to create an immortal, legal quasi-person with special privileges for their private use, the public ought to get to know who’s benefiting from and controlling it. I think it’s proper that the public know who’s involved in those, yes.
So like if you want to buy all the buildings on a block, or something like that, and want to pay fair market value for all instead of being gouged for the last few.
I suppose that’s arguable either way on policy grounds but it seems reasonable to me.
What is a fair market price? How does it differ from the market price, and who gets to make the distinction?
its the same process as incorporating in any US state, where you need an agent of service or registered agent if you dont live there
pick the country just like you would pick a state
and some countries have states too, the US is actually one of the weirder countries as you cant incorporate at the national level
whereas in st kitts & nevis - another federation - you can do both, a st kitts & nevis entity has one set of transparency and regulations, and nevis has a different set of regulations and generally seen as more favorable
its not really a taboo topic like ICIJ and some socioeconomic classes of people make it out to be. its a catalogue with offerings domestically and worldwide
There are also federally chartered banks, although that’s not exactly the same thing.
(Now I’m starting to wonder why my BizOrgs casebook was so short…)
even federal agencies register new entities with their states of choice
I’m always curious what a federal incorporation statute would look like, I bet it would suck as the loudest states’ representatives and delegates would want transparency
People in the comments are conflating layering with simply legit use cases like using foreign jurisdiction and shell companies for corporate/investment strategies.
1. Clear beneficial ownership of any company; and
2. Taxing at source when the beneficial ownership isn't clear.
This particularly applies to real estate. Two of the biggest tax havens now are the US and the UK. The US requires all sorts of financial disclosures from other countries but doesn't reciprocate. The UK (London in particular) seems to exist solely to allow billionaires from sanctioned countries to launder money through real estate. Like that's the entire business model.
It's not always about dirty deals of trafficking substances and arms, it's honestly desirable for a corporation to be located in a tax neutral jurisdiction and then the various owners can vote with their feet where to locate themselves according to their individual preferences.
The inevitability of death and the fact that you can't take money with you (and also the fact that people accostumed to a certain lifestyle would find their life pretty lacking in a 0% tax country) would compel the aforementioned owners to cash out and start spending at some time and then non-0% tax countries would get their fair share tax on their capital gains, income as well as consumption.
If a guy never cashes out and never spends, then what can you do? They are just monodimensional, obsessed individuals, perhaps heavily on the spectrum too, that's their tax right there, not a monetary tax but still a huge tax and a heavy burden that they "paid" throughout their lifetime.
That's not how taxation works.
That's not how autism works.
That's not how linear algebra works.
I do not remember if they require the owners to be human though.
Either way I was doubly disappointed...
I don't think there's yet any way for a non-human to count as a legal person. Entirely possible there may never be.
The question was in what country do you have to combination of the above. High income tax for low earners and low social security for elderly.
And he is also implying that it's worth to create a shell companies for a single person. Which AFAIK also cost money.
Every dollar transaction in the world is reported back to banks in Wall St.
Looking back at it, I did a bunch of code challenges crazy like that.
I'm not taking a position here, and I'm not saying even that these stances are necessarily contradictory, but just that the blanket argument "X shouldn't get to be secret because I don't think they have a legitimate reason" doesn't differentiate between these two cases.
No reason really, but I guess growing up hearing my grandparents stories about the communist take-over of our country taught me what happens when you are a target because you are publicly linked to your wealth.
One of those practical reasons would be the use you put it to; that reason might be outweighed by widespread use of the same mechanism to shield wrongdoing.
More seriously, merely because someone wants ownership of an LLC to be private doesn't mean it ought to be.
Is just as meaningful a sentence and the contrast in tone on hn when it comes to one type of privacy technology (vpn/tor/etc) and another (shell companies) does seem more visceral than logical.
It does give you a right to privacy, defined broadly as "the right to be let alone". These include the Fourth Amendment right to be free of unwarranted search or seizure, the First Amendment right to free assembly, and the Fourteenth Amendment due process right
Maybe the other man had already had his identity verified when he renewed, or was not doing what you think he was.
Maybe you are seeing a conspiracy where there isn’t one.
Maybe you could have used a bill or any piece of paper with your real address on it if you had asked what other pieces of paper would work.
Maybe I don’t for a minute believe that this is the full story.
Also, you can rent a private mailbox from any of the thousands of places that offer one if you so desire, and not deal with the post office.
What do you intend for me to infer from your assertion that one individual’s inferred race is more important to a postal worker than that specific individual’s identity or existing relationship with the post office in this case?
And where in the US do post office box rentals last longer than a year? I wasn’t aware that it was possible to lease one for more than 12 months at a go [0]
Are you familiar with Mail Covers? [1]
[0] https://www.usps.com/manage/po-boxes.htm
[1] https://www.uspsoig.gov/reports/audit-reports/postal-inspect...
Your LLC is intangible. It can't do people-y things like shake my hand.
Intangible IP would be something else that isn't people - we're just less confused about that.
Sounds good in theory, but we all know a true public record of the stuff would be mined by scammers, law enforcement, recruiters and lawyers.
> Some people say that about websites.
The individuals visiting those sites would be reasonable candidates for privacy. What the websites do as a public entity would be subject to public scrutiny.
And frankly, if revealing that sort of information to the public means less donations, I'm pretty fine with that as an outcome. The fact is, corporations can buy politicians/judges and that's a way bigger issue than the privacy of millionaires.
> For instance, who donated to NAACP during the civil rights era right?
Those individuals should not be a matter of public interest - yes. Was there a different point you are trying to make?
> just that the blanket argument "X shouldn't get to be secret because I don't think they have a legitimate reason" doesn't differentiate between these two cases.
Not only these cases -- that argument won't differentiate between any cases ;-).
Better I think to make sure we really understand the arguments being made. Good chance the real argument isn't quite _that_ bad.
“As soon as you run a business or have more than $X you have no right to privacy” is a position a bizarre number of otherwise normal people have, though never stated in those terms.
Why is this different when it comes to corporations? First, some jurisdictions (e.g. the UK) argue that limited liability is a privilege because it provides extensive legal protection for those undertaking a venture. With that privilege come certain responsibilities and duties, one of which is non-anonymity. There's also a pragmatic argument that it deters bad behaviour which is another reason to justify this.
Second, I think it's _really_ hard to argue that being able to have an anonymous, offshore shell corporation is essential for your self expression. Especially not when you are using it to hide large amounts of money. In fact, this infringes upon other people's right to self expression by depriving the state of funding that it would use to provide services to them such as education, subsidising the arts, etc.
There's a good piece in the New Yorker which explores exactly this question: https://www.newyorker.com/magazine/2022/06/27/why-the-privac...
The way they do it has been tried all the way to the top here and everyone agree it is legal.
They still lost all their contracts, again[1], after media found out and made a fuzz about the fact that nobody took out salaries but transferred the profit to causes they identified with. Media even pointed out that it was legal, but, big orgs don't care: they do whatever it takes to get media away.
[1]: yes, this isn't the first time.
But of course there is nothing in Norwegian law that that denies people the right to donate their share, as long as every other law is followed.
Which is why last time media even pointed it out in cleartext the article: everything is legal.
They just wrote the article in the style of a criminal investigation anyway and askes big companies questions the same way they would have done with if they were caught dealing with russian mobsters.
That way they can point to the fact that they have informed about it while still destroying the marked for someone they don't like.
(Sorry, English is nit my first language.)
But, without me being a legal expert in any way, shape or form, my feeling is it is relatively similar to the "Fjordteam" case from Sandefjord a few years ago:
Different owners, different jobs, but operated by volunteers who looked for a nore efficient (and healthier :-) way to finance their activities instead of the traditional Norwegian "cake raffle" ("kakelotteri")
Used for fundraising.
Everything legal. As proven by taking it all the way up to the department.
First of all, this unironically reminds me of Borat.
More importantly, you keep citing legality in this thread as if that should basically end the discussion. Quite frankly that strikes me as a position of convenience, because clearly HN is not a court of law and the scope is not restricted to whatever happens to be legal in any given jurisdiction.
Do you for instance support all legal acts in your country? Going out on a limb I suspect you find at least a few morally dubious or worse.
Just some examples off the top of my head : IVF for single women? State support for all mosques? Fosen windfarms and a broad co-signing of feel-good UN resolutions? Preferential hiring based on either gender or ethnicity? Slap on the wrist punishments for basically all offenses? Enshrined trans rights? Teachers being at the total (legal) mercy of abusive students?
I dunno man, almost like “it’s legal!” is not the QED you think it is.
Nice if you could tell which specific story this is, since I can't recognize it from your description.
Men ja, det dreiar seg om eit norsk AS som var oppretta berre for å subsidiere ei hjartesak.
Litt som Dinamo reklamebyrå som ble opprettet som en mer effektiv måte å skaffe penger til Stabæk (kjent fra "Ona Fyr"-boka som var innmari populær for noen år siden), bare i mindre skala.
(Orsak for blandinga av nynorsk og bokmål, det er berre eit ein måte å lage ein sjibollet så ingen tek meg for å vere ein utanlandsk påverkningsagent med Google Translate :-)
---
Sadly I cannot say more without doxxing myself.
But yes, it was a Norwegian AS (Ltd?) created for the sole purpose of financing something they cared about.
A bit like Dinamo, a Norwegian advertising agency that was created by fans of the Stabæk football club (and made famous by the much hyped book Ona Fyr a few years ago), just at a smaller scale.
(Sorry for my mix of Nynorsk and Bokmål above, it is mh attempt at creating a shibbolet so Norwegians don't take me for a foreigner with Google Translate :-)
Did you mean "moonlight"? Asking because when I hear "a moonshine operation to fundraise for causes", I imagine something akin to an alcohol-themed Breaking Bad storyline
that goes both ways .. tax collection, arbitrary and capricious enforcement of regulation, scrutiny-as-punishment .. these things are as old as cities
I think most people's tax affairs are pretty clear-cut to assess (e.g. if you are an individual earning an income or run a small business). People who structure their tax affairs in convoluted ways where it becomes non-trivial to work out what the correct amount of tax they should be paying is (or even a question which can't really be answered until you are in caught) generally have a lot of money or are trying something stupid (e.g. trying to pay yourself your salary as a loan through an offshore company where the tax authority are obviously going to think this is illegal, see https://taxpolicy.org.uk/2024/01/18/barrowman_fraud).
Individuals do not (unless backed by a corporation).
What about a one-person corporation?*
* I know that in some jurisdictions you need more than one, but let's not jump on that... Big business this isn't
> "X shouldn't get to be secret because I don't think they have a legitimate reason" doesn't differentiate between these two cases.
It does differentiate because what constitutes a 'legitimate reason' for having privacy is extremely different between the contexts. An individual human has much more latitude for seeking privacy than a chunk of capital given legal status by a contract, IMO.
US case law has entered the chat.
However, it doesn't mean we have to accept their usage for tax evasion or money laundering.
[0]: Caveats - depending on your jurisdiction, don't trade while insolvent, don't personally guarantee business loans or leases.
Companies aren't people.
Company = Tor client
Owner = Operator
To put it another way when a company breaks the law should its shareholders (aka owners) go to prison?
The governing body of a corporation isn't its shareholders.
If you're asking what happens if a company breaks the law, then look up VW Dieselgate. Yes, some executives were prosecuted; yes, some of them went to jail.
I'm not sure what (company) shareholders have to do with this.
The comment I replied to said this in reply to my original comment.
> But their owners are.
Shareholders are the owners, not executives.
Forfeiting dividends+penalty that were the product of illegal or negligent corporate practices seems like a reasonable start.
Stated more broadly: As far as investing in unethical and anti-consumer practices is a winner now - society would be better served if the opposite were true.
Umm, in many jurisdictions they are [almost]:
"In most countries, a corporation has the same rights as a natural person to hold property, enter into contracts, and to sue or be sued. Granting non-human entities personhood is a Western concept applied to corporations."
https://www.npr.org/2014/07/28/335288388/when-did-companies-...
https://www.purduegloballawschool.edu/blog/news/corporate-pe...
A person has rights other than to hold property, enter into contracts, and to sue or be sued.
Indeed.
In the context of this thread, how are those other rights relevant?
That a company isn't a person. We know this because a person has rights a company doesn't.
It would appear that this view is not widespread:
"In law, a legal person is any person or 'thing' (less ambiguously, any legal entity) that can do the things a human person is usually able to do in law – such as enter into contracts, sue and be sued, own property, and so on. The reason for the term "legal person" is that some legal persons are not people: companies and corporations are "persons" legally speaking (they can legally do most of the things an ordinary person can do), but they are not people in a literal sense (human beings)."
I'm happy to grant any corporation all the privacy they desire IF we had campaign finance and lobbying laws that prevented the corporations from interacting with politicians (At least, not without a significant barrier, IE, only being able to talk to a third party and getting criminal charges if they try and give them money).
The issue is money can buy sway. We saw this with Disney and copyright law becoming long and longer with more strict enforcement.
This would need to also a law otherwise it would fail to pass the court system.
I don't think politicians would ever pass this law, which tells you exactly what you need to know. However, you could probably get referendum support for it.
Actually, maybe a law would not need to be passed. You could force a change in rules to require the US passport # for every donor to match the name of the donor itself. It would make corporations disappear from the rolls, similar to what happened when the IRS required the SSN of dependents in the 1040.
In very, very few locations is it a good idea to let all but a small subset of people know you’re having them. Jealousy is an ugly thing.
Same with money.
Protecting yourself against the (ridiculously) surveilled internet is wildly different to going to the effort of hiding one's responsibility for, or ownership of, a company.
I'd argue there should be a line between openly public knowledge and knowledge available to agencies responsible for prosecuting corporate malfeasance, but the ability to completely hide from responsibility for corporate malfeasance should not be possible.
Intentional cherry-picking:
- I think the Sackler's are still doing "just fine"
- Sam Bankman-Fried should have spent more time speaking to lawyers in the Cayman Islands to upgrade his level of ownership 'protection' (although maybe the real owners did and SBF was a patsy).
How will the "rich people" maintain privacy/secrecy after the Corporate Transparency Act?
[1] https://www.uschamber.com/co/start/strategy/small-business-c...
A judge ruled it unconstitutional - narrowly only for the organizations and their members that filed the case - and its currently being appealed by the US gov
its going to the 5th circuit though so rich people don't have to do anything, this regulation is DOA
its interesting what cases make headline news and whats relegated to law journals
It certainly made headlines to people its impacts. 2 of my law firms sent out alerts. (They send out alerts maybe 1-2 per year whenever a significant legal change is happening - I think the last alert was the Wayfair sales tax Supreme Court decision)
I took one look at the law and figured that I won’t have to do it by 2025 because it’ll get declared unconstitutional
so far my bingo board is working out
When it comes to actual personal wealth management (not corporate tax optimization) there is also Austria, Lichtenstein, Geneve, Monaco, etc which are all very livable for HNWI and their families.
Geneva and Monaco sure but one thing you have to realize about Geneva/Monaco is that for simply HNWI(UHNWI is 25 mil and up) Monaco is too expensive and Geneva has a horrible ratio of living costs to living quality(the expensive hotel quarter is right next to the "open drug/prostitution market at midnight on a Saturday" quarter). Geneva basically lost its lustre for 10-20 million networth foreigners after Cologny became saturated and overpriced over the last 10-15 years.
There's a lot of talk about the increase in KYC for individuals setting up accounts with banks and other financial institutions for reasons of anti money laundering. And yet anonymity is still allowed (and effectively encouraged) in business ownership which could facilitate far greater amounts of money laundering more easily.
Ever since reading about Mossack Fonseca it has bothered me (not confused me though, since the rules are made by the people who most benefit from it).
Which is why homeless people and ne'er-do-wells get paid $10 to sign a piece of paper (which remains unread) but states this responsibility for shell companies X, Y, and Z.
Also, by design, shell companies don't tend to have assets worth seizing.
I know I'm mixing up limited understandings of Australian and US legislation, and sprinkling on top of that my frustrations with those two fairly strict legislative countries allowing business to be conducted with organisations that have opaque, international ownership structures. It's a glaring hypocrisy (that I'm likely missing a fair bit of nuance due to only a surface understanding) given the ratcheting up of the surveillance state on individuals.
The whole area is something that I would like to gonzo-research as a retirement project.
The basic operation of markets depends on having as little information asymmetry as possible between opposite sides of a transaction, and part of that means knowing who you're doing business with to make informed decisions about the reputation of your counterparty.
I'm not sure why ownership needs to be openly published in advance -- you can always query them confidentially through private correspondence -- or how having ownership compiled into a federal database that you don't have access to (unless you have corrupt influence over the relevant agency) will help you.
I mean, I think the whole point of the act is to stop "rich people" from maintaining privacy/secrecy in regards to the businesses they own. And that's a good thing.
No, the act has little effect on "rich people". It applies only to non-public firms with 20 or fewer employees, and exempts most firms in the banking and finance industries.
It encumbers your local barbershop and the mom-and-pop restaurant on the corner, but the "rich people" get a pass.
> And that's a good thing.
It turns out that "rich people" have as much right to maintain the privacy of sensitive personal information as anyone else.
Only those that dwell in darkness fear the light. Exposing who own these LLC's seems like a solid 'pro-truth' move for America.
Because if you insist on privacy for the “helping people escape rulers” business the money laundering and criminals will suddenly be in that building!
Happy to be proven wrong though, and to hear counter-anecdotes (I find it incredibly interesting). Systems and loopholes and patches and 'bugs'.
3D printers only just barely became viable as prototyping tools for molds in the last few years. Specifically the Form 3.
You don't fight discrimination by making yourself anonymous.
I agree that is a sensitive issue - but only in so far as 'gotta cover their ass' from a conservative job... which is... a weird place for a sex-toy designer to be... (which raises far more questions about the quality of toy-design if it isn't supporting a livelihood). Appeasement to conservatives is rarely a good strategy... appeasement through omission of data about who they are hiring seems like your family member put themselves in this precarious situation on their own volition. Everyone's got to eat, though, so can't be too bothered :)
But hiding who you are: feels morally dubious and self serving in that case you present.
I wonder: do you hold the same views when it comes to regular people's online privacy?
But a business's ownership is about the privacy of its owners/stock holders - which are regular people. Saying their privacy is "morally dubious and self serving" is akin to saying regular people's need for privacy is morally dubious and self serving. Is the old anti-anonymity argument of "if you're all legit, what do you have to hide?!"
There is an argument to be made here though when said owner is another corporate entity - that is not a person so maybe it doesn't deserve any privacy.
Agree on that point.
One argument I muster for the general case: say you disagree politically with a billionaire and don't wish to give them any money, if you don't know what companies they own: how can you act effectively in market actions with limited information? such an arrangement systemically gives power to the owner class compared to the consumer class on every exchange made between the two. We should strive for something fairer, something more open. And we should not be terrorized by the limited few deranged bad faith/violent actors.
As an individual you are entitled to hate whomever you want. After all, we all have the racist uncle or the commie nephew. But the law should shield the public from people like you, not help you hunt your victims. Anti-segregation, anti-discrimination and privacy laws are good for that.
I don't want to give my money to a billionaire fascist, or capitalist, evangelical, or -ism (What I want is proper market information to act rationally as a market actor). I don't want to hunt anyone. I worry about what internet content you consume to make you think that's what I think. I would examine that.
You are about ready to fight a battle with a scarecrow you constructed yourself.
Maybe escrow services that did not hide their identity would solve the problem (for a price)?
"Vote with your dollar" is for morons. I don't reconcile it because it is irrelevant.
That's all I care about or want: To know 'who', not where 'who' is.
Seems good to me.
One of her friends registered an llc with herself as the owner, and one of her followers looked her llc up and found her real name and address via the state llc registration web site. He then hid in the bushes outside her house and "surprised" her. Leading her to close the llc and move.
That's got nothing to do with attempts to force business owners to submit sensitive personal information into a central database, which you wouldn't even have access to unless you had corrupt influence over the organization maintaining it.
Yeah this has worked out so well historically.
The whole point of privacy laws is to allow for the idea of bad actors on the other side of the equation. I'm all for tightening up loopholes but off hand sayings like this are thrown around all the time and they're terrible logic that isn't at all backed up by evidence.
The unscrupulous aspect might not be the company, but the audience. It shouldn't be that hard to imagine that owners of companies might be targeted for harassment, violence, etc., and might even be reluctant to invest in a company at all because of the problems that would come from being publicly listed in association with that company. One might argue that ownership comes with these consequences, but of course the impact might be broader, extending to friends and family members, who wouldn't necessarily have any ownership stake in the business. The Internet being the Internet, this tends to be a particular problem for women and minorities.
Then there's cases where the information could be harmful to the company, not the owner.
There's cases where they're just trying to avoid PR/political problems that can be perfectly defensible, but if you're having to defend them, you've already lost the PR/political battle. The Internet being the Internet, even if they purge all public political positions from their personal discourse, even historical political activity going back well before they ever founded a business could be a problem. I know business owners who make sure their business avoids engaging in anything that would put them on any side of a political or hot button issue, and they extend that to themselves because their name is attached to the business.
Simple example: I know one person who is involved with shelters for battered women. They're fine that everyone knows they're involved in it, but there are some businesses they've invested in where they're a silent partner specifically because their partners don't want the harassment/violence/ill will that can come with that.
Every single one of them. If you don't want to do business with a firm that's evasive about its ownership, that's your prerogative, but forcing anyone engaged in business to have sensitive personal information about them recorded in a centralized database that will be a beacon for corruption and abuse is invasive, anti-social, and dangerous.
> Only those that dwell in darkness fear the light.
You are of course welcome to post your full name, home address, phone number, social security number, annual income itemized by source, credit score, and any other personal information you feel should be exposed to "light" right here in this thread.
It's funny that every bit of that information is demanded by employers, and they usually don't reciprocate. It's only considered "sensitive" information because our society is incompetent and corrupt. The secrecy that protects the rich and powerful is an artifact of that corruption. In a just and competent society, none of that information could be used against us, because we wouldn't be using identifiers as secret keys, and harassers could be identified and punished.
If you have to hide to feel free, you're not actually free.
Name, address, phone, SSN, credit card numbers, tax returns, itemized income statement, health records, SMS logs, phone logs, email account exports, relationship history.
> It's only considered "sensitive" information because our society is incompetent and corrupt.
"Society" is an abstract concept, and the concrete reality that it represents is a large collection of people who are mostly strangers to you, and whose interests and values are by no means guaranteed to align with yours even when they are totally honest.
> The secrecy that protects the rich and powerful is an artifact of that corruption.
The same secrecy protects you and me. And at the end of the day, I don't care one bit about "the rich", and "the powerful" are exactly who I want safeguards against.
> In a just and competent society
...the streets would be paved with gold, champagne would flow from the taps, we'd all live to be a thousand, and our pets would speak to us in perfect English.
> none of that information could be used against us
You are of course free to use HTTP instead of HTTPS for all of your web-based data transmission.
> If you have to hide to feel free, you're not actually free.
I think I'll stick with imperfect freedom in this reality over perfect freedom in a nonexistent one.
By hiring ex-CIA Agents having experience with setting up shell corporations after said act.
We could extend this argument to individual taxpayer info too. Have these things happened with taxpayer info, and does that mean the IRS shouldn’t get to know where you live?
Actually, yes. Same with voter registration. Hell in WA state voter registration is public knowledge, along with whether you voted in any given election.
Try it if you want it, but read the terms of service. Lots of "if you use this for advertising it's a felony" for anyone looking to grift
https://www.sos.wa.gov/washington-voter-registration-databas...
The BOI requirements of the CTA were recently ruled unconstitutional (as exceeding federal commerce-clause power and encroaching on powers reserved to states) in the first major test case before a federal court. [1]
Since it was ruled unconstitutional on reserved powers grounds, they didn't even reach the 4th amendment implications, but there may be further consideration as these cases make their way up the court heirarchy.
It's definitely not certain that this database is going anywhere.
> How will the "rich people" maintain privacy/secrecy after the Corporate Transparency Act?
The same way they do now. The CTA as formulated was only binding on non-publicly-traded companies with 20 or fewer employees. It also explicitly exempted companies whose primary business activity is financial services or asset holdings. This is why many regard it as an attack on small business disguised as an accountability measure for big business.
[1] https://www.thomsonreuters.com/en-us/posts/corporates/cta-un...
In the UK, all of that information is freely available to anyone via Companies House.
It's mostly picking up info from the regulators in the various jurisdictions. Glorified alternate UI frontend to public info basically.
That's not nearly enough to untangle what's going on in complicated multi-jurisdiction structures - even for structures not designed to conceal.
To put it into terms hn will understand - it's the equivalent of claiming to deduce how software works from the source code filenames only. I mean yeah kinda, but not really.
Also, article is missing WorldCheck.