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> Larger companies that employ more than 20 people, have revenues above $5 million and a physical presence in the US, are exempt from the act. Churches, chariti
by joe-collins 6y ago
> Larger companies that employ more than 20 people, have revenues above $5 million and a physical presence in the US, are exempt from the act. Churches, charities and other non-profits are also exempt.
Those seem like extremely non-negligible exemptions. Which is not to say that this law is useless, but it could use more teeth.
- SEJeff 6y agoIt is a really good start however. No doubt under a different US administration, it stands a chance to be improved upon.
- onetimemanytime 6y agoit is me...or smaller companies should have the ones exempt?
- boomboomsubban 6y agoWhy should any company be exempt?
- ryanlol 6y agoPrivacy, there’s no need for this information to be public. You could already sue the anonymous shell company if you wanted to.
- jachee 6y agoIf a business entity going to conduct business in public, why does that entity deserve any expectation of privacy?
- capitol_ 6y agoHere in Norway the register of who operates a company is public information in Brønnøysundregistrene [1] It's convenient but it also generates a huge amount of telephone spam and fake invoices fraud attempts. So I could see the argument of keeping that information private. I still think that it's better to have it public, but it generates some additional problems that needs to be handled. 1: https://www.brreg.no/ https://www.brreg.no/
- hkt 6y agoWe have the same thing in the UK, Companies House. Anyone who is a director has their address in public. It doesn't generate much spam though as we don't do phone numbers or email addresses, and companies who spam people who aren't opted in to spam can be fined.
- namdnay 6y agoThe problem is that lists the director, not the owner. So you just have a secretary in a law firm listed as the director of 200 shell companies
- tialaramex 6y agoBy law Companies House requires that "Persons with Significant Control" be listed. PSCs are small numbers of specifically humans (not corporations) who, somehow, in effect control the company. The PSC entries are supposed to list all such humans (assuming any individual humans have "significant" control which they wouldn't at e.g. a publicly traded company) and only those humans. The law is in practice fairly toothless, Companies House has typically insisted that it simply doesn't have the funding to pursue errors even though it's illegal to make false filings - despite a large volume of obviously bogus information in their system every year. It did find the money exactly once in recent years, to prosecute one person. That one person was making a point of how toothless it is, by creating bogus data that was embarrassing to named politicians. What an excellent way to make their point for them.
- cnorthwood 6y agoNo, Companies House also requires you to declare "persons with significant control" in the ltd company, which includes the owners. (for example, this is my company https://find-and-update.company-information.service.gov.uk/company/11846968/persons-with-significant-control https://find-and-update.company-information.service.gov.uk/c...)
- tialaramex 6y agoFor quite some years now the rule for Companies House is that a director may provide an office address and that's what is shown in the public records. Companies House will still ask for their home address, but it isn't public. There are actually three levels: A public address available to anybody who knows how to enquire, an address available to a large number of authorised users, including Credit Reference Agencies, numerous government agencies and so on, and finally a home address intended primarily for law enforcement (e.g. if the director is to be arrested it wouldn't do for police to have no idea where they live). You can set them all to be the same, but you don't have to. The reason for the last extra grade is that in the UK there are businesses which are legal but broadly unpopular. For example, somebody is breeding animals that will be used for medical research. Historically protesters have harassed the directors of firms like that, vandalized their homes and cars, physically attacked them, or threatened their lives. Such directors are entitled to request that their home addresses be suppressed from most uses for this reason.
- tt433 6y agoWe all have the resources to sue anonymous Delaware LLCs
- simon1573 6y agoThe cab company?
- tt433 6y agoTo give some meat to my post, some landlords of low income housing abuse Delaware's unusual business regulations to obscure their identities and operate illegal roach motels in other states; these same people make excuses about how they're at risk of being harassed by the same tenants they underserve and evict, and therefore feel justified in hiding their identities. Edit for clarity: the tenants can't sue, being low income. My original post about suing anonymous shell companies was facetious.
- jrs235 6y agoI disagree. Tit for tat. quid pro quo. If you want the privileges provided (limited liability) and recognized by the government, then I have no problem if privacy is given up in exchange.
- DennisP 6y agoNone of the information is public anyway. > The information about the true owners would not be publicly available, however. FinCEN could release information only after receiving a proper request from a local, state, tribal or federal law enforcement agency, or a request by a foreign country. That means ownership information would not be publicly available to identify who is actually behind an investment. https://www.nytimes.com/2019/07/11/business/dealbook/llc-shell-companies-money-laundering.html https://www.nytimes.com/2019/07/11/business/dealbook/llc-she...
- acrefoot 6y agoFiles from FinCEN were leaked in September to Buzzfeed and icij.org
- DennisP 6y agoI'm just saying I don't think privacy was a motivation for the exemptions. Would policymakers have considered the possibility of FinCEN leaks? That'd be pretty unusual, since usually they assume it's fine for government agencies to collect as much information as possible.
- deleted 6y ago[deleted]
- FabHK 6y agoSee above excellent answer by https://news.ycombinator.com/item?id=25612615 https://news.ycombinator.com/item?id=25612615: > Tracing the beneficial owners of economically-active entities (i.e. not shell companies [2]) is expensive. Imagine doing this for Apple. You would need to look through every ETF that holds it to its mutual fund owners to their pension fund owners to their holding companies to their pensioners.
- twic 6y agoThe UK version of this rule doesn't exempt large companies, it exempts small shareholders. You don't have to declare anyone who owns less than 25% of the company.
- hedora 6y agoThat makes a lot more sense. That way, to have a shell company, you need 5 owners, which is a bigger nightmare than hiring 20 employees.
- odiroot 6y agoNo, usually the shell companies have zero or minimal number of employees.
- onetimemanytime 6y agosure, but unless money moves through them, what's the harm? The could have done it so any one person can only have "shell" companies up to the point when x million is moved through them in any one given period.
- odiroot 6y agoThey do move money but, because it's so easy and relatively cheap to open them, they can split the flows into tens of hundreds of them. So you have fractions of a million moving at once, not a big lump sum.
- onetimemanytime 6y agotens of hundreds of them....but if the total is more than $x a year you must declare. Anyway, the decided this way and so it is.
- HeadsUpHigh 6y agoThere is nothing to declare because the beneficiary wasn't needed. Now it is.
- csomar 6y agoIt is not useless. Countries love money laundering when the money is coming from overseas and the crime happened not in their jurisdictions. It's free money that circulates in the economy, pays some taxes and help their exchange rate. The only reason some of these money laundering hot spots (like Hong Kong or the Emirates) started clamping down on these operations is that the USA and Europe pressured them to. Switzerland removed its secrecy because of FATCA, not because they wanted to. This law passed because 1. The regulator do not care about small guys; 2. They don't think small guys are moving that much money and are more trouble than profit; and 3. It looks like they are doing something. It also helps employ some people and maintain big cities real-estate by fake restaurants or shops. Ever wondered how some of these joints are able to pay rent and employees with so little customers?
- danenania 6y ago"Ever wondered how some of these joints are able to pay rent and employees with so little customers?" I have always wondered about this. In Manhattan, for example, you fairly frequently hear about restaurants that seem to be popular and busy all the time closing because they couldn't keep up with rent increases. And yet it's also somehow full of corner stores, gift shops, laundromats, pizza places, Chinese restaurants, lunch buffets, etc. etc. that no one ever seems to go into and have 2 stars on Yelp, but are still there year after year. I figured that in some cases it could be a family that owns the building or a sweetheart lease deal or whatever, but there are just so many that it doesn't seem to add up.
- coliveira 6y agoIn many cases they own the location and think it is a reasonable way to defer property costs, which maintaining ownership. But you're right, there are also shady operators that are making money in illegal ways.
- giardini 6y ago"small guys" ? Like the Roman Catholic Church, which likely has been moving it's money and holdings, just as it moves its guilty priests around, to hide them all so the pedophile lawsuits cannot get to it? Exempting churches was a terrible, terrible mistake.
- DennisP 6y ago> the law also exempts some entities from the disclosure requirements, including domestic investment funds that are advised and operated by a registered investment adviser. Gascoigne said that exemption was the result of lobbying by the private-equity and hedge-fund sectors. https://www.washingtonpost.com/us-policy/2020/12/11/anonymous-shell-company-us-ban/ https://www.washingtonpost.com/us-policy/2020/12/11/anonymou...
- coliveira 6y agoIn other words, the law is toothless, you just need to open an illegitimate business that is operated through an investment company.
- JumpCrisscross 6y agoNote that RIAs have to file paperwork with the SEC and are subject to its regulation. I would still prefer they be subject to the law. But it’s night and day from a Nevada LLC, which doesn’t even require ID to form, buying up hundreds of millions of dollars of property.
- DennisP 6y agoOk but if they're not required to submit ownership information for shell companies, it seems the only practical impact is that RIAs get gatekeeper revenue.