Bill Moyers: Why are there so many anonymous corporations in Delaware?
From the Federal Election Commissions suggestion that it might finally begin scrutinizing donations to super PACs from mystery limited liability companies (LLCs) to the revelations in the Panama Papers, LLCs are very in right now. The leak of the Panama Papers reportedly shows the use of offshore shell companies to hide cash by many high-profile foreign figures, from highly-paid soccer star Lionel Messi to the prime minister of Iceland, but the lack of Americans implicated in the investigations has raised eyebrows in the international community.
Wed all like to believe that its because most Americans are law-abiding folks; but there might be another answer: Americans dont need offshore companies in tiny island nations to hide their money. America has Delaware.
Delaware is home to more than a million companies, meaning it has more companies than actual human residents. In 2012, The New York Times reported that a single building in Wilmington was the legal address of over 285,000 separate businesses. About 65% of Fortune 500 companies are incorporated in Delaware. Many companies choose to incorporate there because of the business-friendly climate and extensive body of corporate law, or because Delaware has much lower corporate taxes than most states. The New York Times says incorporating in Delaware has enabled corporations to reduce the taxes paid to other states by an estimated $9.5 billion. But it also happens to be one of the easiest places in the world to set up an anonymous company, making it a great place to establish an LLC to do business that you dont want anyone to know about or you dont want to be easily connected to.
The New York Times quotes the chief executive of a registration agent a company that registers companies as saying Delaware has the most secret companies in the world and the easiest to form. A senior researcher at the Tax Justice Network quoted in its piece concurs, calling Delaware the biggest single source of anonymous corporations in the world.
Even though its the easiest place to set up an anonymous company, Delaware isnt the only state whose laws allow corporate anonymity. Several states like New Mexico, Wyoming and Nevada dont require public disclosure of a companys owners, though they may compel the release of more information through subpoena. And even if these states dont provide complete legal protection through anonymity from lawsuits or federal investigation, they can make it significantly more difficult for law enforcement or the public to look into whos behind these business entities. That matters a lot when those LLCs are, for example, making big donations to super PACs.
As long as any US state has rules this lax, it affects the entire country just look at how many impossible-to-trace LLCs we found donating to super PACs, contributions that the public will never know the true source of.
At: http://billmoyers.com/story/why-are-there-so-many-anonymous-corporations-in-delaware/
merrily
(45,251 posts)friendly for corporations all over the US to file there and maintain an illusion of existence there.
Nitram
(22,794 posts)forest444
(5,902 posts)Must be those warm Panamá breezes.
http://www.democraticunderground.com/10027740070