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Company culture -

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.

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Company culture -

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.

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The company construct -

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.

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The company construct -

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.

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Anonymous companies -

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.

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Anonymous companies -

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.

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A company is born -

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.

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And little record is kept -

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.

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Secrecy jurisdictions -

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.

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Secrecy jurisdictions -

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.

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A friend or relative -

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.

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A nominee director -

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.

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The company as a legal person -

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.

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The company as a legal person -

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.

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A web of lies -

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.

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The argument for anonymous companies -

Advocates of financial secrecy argue that wealthy individuals need them for protection from unwanted media attention and even threats to personal safety.

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The argument against - However, we cannot skirt around the fact that anonymous companies are used in almost every type of economic crime, including many major corruption cases.

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Abuse by companies and governments -

They are used, for example, by companies who want to evade taxes and by governments who want to skirt sanctions.

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Organized crime -

Anonymous companies are also a favorite of organized crime groups who need somewhere safe and reliable to clean their money.

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Oligarchs -

Oligarchs with criminal convictions or a shady past sometimes use anonymous companies to purchase luxury apartments and store their money that way.

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To add insult to injury -

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.

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The fight for transparency -

Thus, there is a lot to be said for increasing transparency when it comes to companies, their owners, and their controllers.

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The fight for transparency -

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.

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Work in progress -

It has proven difficult to achieve international cooperation on this matter, however, since there are governments who benefit from allowing anonymous companies to register.

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Work in progress -

These governments are naturally reluctant to put a stop to anonymous companies and thereby increase financial transparency.

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The right direction -

However, the fight continues in recognition of the fact that outlawing anonymous companies could put a stop to corruption and other illegal activity.

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The right direction -

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.

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The right direction -

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

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