Corporate anonymity

Ultimate privilege

Finding out who owns a company can be tricky. So is changing the law

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Readers' comments



Britain does not "allow" bearer shares; shares in british companies have to be registered. The UK recognises bearer shares from other countries where they are permitted - but that is a very different thing. This article should be corrected!


Warrants are not the same as shares; they are a right to receive shares in the future - when exercised you become registered as a shareholder. Until then, a warrant holder is not a shareholder who controls a company.


Another idea could be to require a clearance certificate from an independent body set up or appointed to perform specific due diligence on the beneficial ownership . Banks would refer the customers to such body and anonymity could be kept but vetted by such authority first.
It may sound bureaucratic but those who want to keep anonymity would surely consider this only a small price to pay.


Excuses for the unset of BIG GOVERNMENT. Tax avoidance is the result of complicated tax laws, extremes tax rates driven by politicians perpetuating the money flow to their own kin. Drug Money and its laundering cousins is the result of the utopian war on drugs that is killing so many in Latin America and Asia so some American or European citizen can, by dodging their own insane drug use laws, enjoy into one of the most destructive but eternally linked to humanity PLEASURES; while the war on drug's state's budget keep feeding the political system. CIVIL LIBERTIES gets squashed in the name of a stupid political elite.


before I stumbled on this article, I thought that the problem of corruption was solely attributed to weak laws in Kenya, how wrong I have been. Actually, the west is responsible for allowing registration of entities and shareholders of Kenyan companies whose ultimate owners cannot be verified. Delaware and the british islands keep featuring in corruption scandals in Africa.

teacup775 in reply to Kioi

Undoubtedly laundering is one of those service industry areas that the US economy is supposed to expand into, as manufacturing, and the vital economic expertise that goes with it, moved overseas.

Add Wyoming to the list. The US provides ample safe harbors for shell corporations. No need to go abroad.

aidan clarke

Hernando de Soto makes a compelling case for why markets cannot function efficiently and economic growth potential cannot be maximised without complete transparency of transactions and ownership.

With this in mind, they should really approach this from the other end. Have every physical person declare what they own. Compare this with an inventory of what assets exist. Anything unclaimed would apparently be no one's, so no one should object to it being seized and sold off by the State.


But for the time being, self-interest has trumped efforts to clean up company law. Moneyed capital's survival now bound west to take in this regard.Evolution of capitalism has reached on such a stage that crises are going to be occurred as suggested time and again by greatest man of The Capital.


My, my. And to think that some of the biggest users of these sorts of things are guys like Ralph Nader, George Soros, John Kerry, and associated sorts. Prediction: "Lots of smoke and noise. Little practical effect."

USS Geometer in reply to ShrNfr

Soros would have use for these convoluted corporate structures; Kerry might to a lesser extent, to shield his assets (though you will have to prove that to me).

You conveniently didn't mention someone much more relevant these days - Mitt Romney. Why oh why? How about John McCain and his wife? Or Darrel Issa? Or Sarah Palin for that matter? Or are they the "associated sorts"? LMAO.

But Ralph Nader? Nader has fought against corporate corruption for a long, long time. Exactly what reason would he have for setting up complicated corporate structures? Is this the perceived wisdom in AM Radio / Fox Propaganda Land?

I agree with you that not much will get done about this, but it will be major corporations looking to keep their complicated and effective tax shelters in place, along with their partners in government, that will prevent it. And very wealthy people like Romney.

But not Ralph Nader. It is very tenuous and partisan for you to include someone who has championed Main Street, over corporate interests, in this group.


It would be nice to establish a legal precedent:
To hold rights to a property - whether tradable equity stakes, gold or land - full disclosure must be made to tax authorities.

If you don't admit your ownership to the law in a timely manner, then you have no recourse to the law. Contractual rights are void if you refuse to disclose them. Where you try to conceal assets, other parties are entitled to screw (by being first to legally claim your stake).

One aspect of this is the end of paper money - we must move to an entirely electronic system (whence denying ownership of cash will intrinsically clear your accounts). Then, all financial bodies must be legally obliged to disclose all transactions to tax authorities. And all public companies must disclose all payments they make to private individuals.

With effective implementation of the above system, it becomes tough to conceal illicit income (got to barter), and near impossible to

And to really wreck the black system, we need full legalization of drugs, sensible excise duties and lower marginal tax rates (max 35%).

Do enough of the above, and there is enormous potential to raise additional tax revenue - disproportionately from the rich, and with minimal economic damage.


Funny how governments can find billions to fight the "war on drugs", but cant get their act together in order to sort this mess out.

Vested interests?


As always, more intrusive and cumbersome regulation imposed on innocent people for the sake of, perhaps, improved likelihood of, maybe, catching bad guys. I, for one, am sick and tired of filling out ever more complex banking forms every couple of years just to prove that I have the right to manage my (squeaky clean) money.

The comment about BVI is telling. It's not that information is not available to law-enforcement officers. It's just that pesky things like court orders and official request cramp their style. And, sometimes, reduce the potential for a shakedown.

Want to get more information to reduce corruption? Le's go for mandatory annual asset declarations from law-enforcement and judiciary personnel...

Yukon Dave

Drop all deductions, Flat scaled income tax paid when it is earned or drop it all together and use a sales tax. Government cuts checks to encourage behavior or support those in need.

Legalize drugs as well and the whole issue goes away. We all know what happened to the Al Capone gangsters when they repealed prohibition and legalized and taxed alcohol. Who cares who owns a corporation when it pays taxes every time it buys something, pays an employee or cuts a dividend. Lets get government out of that business, long term it is bad for the people.

Escalus in reply to Yukon Dave

If all we were concerned about is improving tax efficiency you may have a point. It isn't though.

The dismal science is notorious for being completely useless in situations where its requisite rational actors operate in a cloud of ignorance. You can't really hope to win a game of poker if you don't know how deep your opponents pockets are. Not even knowing who he is masks all signals of motive that might cast light on his betting strategy. A trivial game of cards with knowledge asymmetry in this regard is evidently unfair.

The real life business of making stuff and providing useful services is riddled with complexity, trade offs and specialisms that often make relative value hard to assess even with the best available knowledge. A buyer presented with apparently equal value at better prices appears to have a straightforward decision to make. The prerogative of the inefficient monopolist is to price his competition to death and profit subsequent to his inevitable demise - at the expense of the innocent buyer.

Many jurisdictions have laws against such obvious anti-competitive behavior. Governments are supposed to see fair play at this table and can't do so without making it illegal to back a competitor anonymously.

In the mean time, buyer be very ware indeed.

Yingnam Fong

A little side track here. Some Nigerians will teach you how to launder money without routing through any bank account. They use only the chemicals and stories.

dave md

This is tangential, but hilarious: "Yet change of any kind [of law] is painfully slow [in America]." The Stop Online Piracy Act aka Protect IP Act aka internet censorship laws seemed to be cruising through all branches of government pretty quickly. The National Defense Authorization Act for Fiscal Year 2012 that allows indefinite detention of American citizens without trial was swiftly passed on December 31st 2011.

Change of laws that protect/benefit lobbying special-interest groups in America is swift. Change of all other laws is slow at best. Campaign finance reform now: Get corporate/special-interest money out of our democracy.


Other than the screw the public, what legitimate reason is there ever to hide the real ownership of any incorporated entity?


The real reason is to hide corruption and money derived from it... Biz guys avoid competition at all costs; corruption is the easiest road on this path.


let us put on our thinking tin caps for a second.
the entire purpose of corporate structure is LIMITED LIABILITY. hence you have LLCs, and sub-chapter corps. You also have limited partnerships.
A smart person starts a business and structures it as a corporation. this shields them from the crazy 'sue happy' lawyers, and allows him to better manage his financial affairs in the sense of eliminating pass-through taxation.
eliminating the essence of a corporation will accomplish several things:
a. it will increase the amount of taxation the government can levy on people doing business
b. it will essentially reduce the level of business growth
c. it will kill the stock market
d. it will make lots of money for lawyers.
if i want to launder money, i don't need a corporate entity, all i need is an off-shore account.
so once again, our good buddy uncle sam wants to reach deeper and deeper into our pockets and snatch any tiny, little extra pennies we may have in there.
i propose instead that we do the following:
a. eliminate the payroll tax (which is unconstitutional and has been struck down twice by the US supreme court)
b. eliminate (or at least audit) the federal reserve
c. hang all the lobbyists at massive public rallies


Here is something that Anonymous could do that would benefit teh majority of people. Find all these hidden owners and publish who owns what for the all the worlds companies. It is set as a challenge! Are they capable of doing this?



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