The terrestrial impact of the Three Gorges Dam
The omnipresence of companies makes it easy to forget that they do not really exist; that they are merely an artificial construct designed to allow real people to do business.
In many cases the owner of a so-called “anonymous” company is almost impossible to trace, because he or she has done everything within his or her power to hide ownership.
In the modern world, it is virtually impossible to go about your daily life and not interact with a bunch of companies. They feature in just about everything we do.
The majority of companies and corporations are simply vehicles that their owner or owners can use to conduct their business without incurring personal financial liability.
There are some companies, however, that do not engage in any business at all. Instead they exist merely to cover up their owner’s malign and often criminal activity.
In some secrecy jurisdictions there is simply no requirement to collect and submit information about who owns or controls a company that wishes to register.
Most anonymous companies are incorporated in what we call a “secrecy jurisdiction,” where it is possible to register a company providing only minimal ownership information.
The lack of incentive to identify and verify the true owner of a given company means that it is all too easy for bad actors to hide and cover their tracks.
In others there may be such a requirement, but once the information is submitted it becomes so confidential that it is virtually impossible for anybody else to access it.
He may also use a “nominee director,” who follows the instruction of the company’s actual owner but keeps the identity of that owner under wraps.
For example, a criminal wanting to establish a company to launder money may not register the company in his name, but in the name of a friend or relative.
Once incorporated, a company has legal personality. That is to say, it can do many of the same things as a human person, such as taking out a loan or transferring money.
Advocates of financial secrecy argue that wealthy individuals need them for protection from unwanted media attention and even threats to personal safety.
It can also own other companies, including ones that are listed in countries where there are stricter rules about which ownership information should be made available.
They are used, for example, by companies who want to evade taxes and by governments who want to skirt sanctions.
Anonymous companies are also a favorite of organized crime groups who need somewhere safe and reliable to clean their money.
Ownership of a company can also be transferred at any time, meaning that it is possible to weave an ownership web for a single company that could take years to unpick.
Oligarchs with criminal convictions or a shady past sometimes use anonymous companies to purchase luxury apartments and store their money that way.
Thus, there is a lot to be said for increasing transparency when it comes to companies, their owners, and their controllers.
However, the fight continues in recognition of the fact that outlawing anonymous companies could put a stop to corruption and other illegal activity.
These governments are naturally reluctant to put a stop to anonymous companies and thereby increase financial transparency.
It would also help the general public to better understand the flow of the enormous sums of money that impact us on many levels, from political to personal.
As long as anonymous companies continue to be used maliciously, good actors will argue the case for their abolition and try to make it happen.
Sources: (TED-Ed)
See also: The biggest missed business opportunities in history
It has proven difficult to achieve international cooperation on this matter, however, since there are governments who benefit from allowing anonymous companies to register.
Some effort is already being made. International authorities and NGOs have called for requiring companies to say who ultimately makes the decisions and has the benefit of the assets.
Even in the event that a criminal is convicted, their anonymous assets may be extremely difficult to locate, making it much more difficult to compensate victims.
Whether we are buying a company’s products, using its services, or suing it for one reason or another, most of us interact with multiple companies on a daily basis.
Check out this gallery to learn about anonymous companies and why they are dangerous.
What are anonymous companies and why are they dangerous?
A peek into the world of economic crime
LIFESTYLE Crime
When we think about companies, we tend to picture those that are actively involved in business, i.e. the shop that we buy our morning coffee from, the bank where we keep our money. But there are some companies that don't do business at all. Sometimes they are benign, but in other cases they exist simply to hide the criminal activity of their owners and/or controllers.
Check out this gallery to learn about anonymous companies and why they are dangerous.