8 ms·

Why is requiring each property to have a named, non-LLC owner not feasible?

by mjmahone17 5y ago

monkeywork 5y ago
who should be marked down as the property owner of Apple's campus?
- deleted 5y ago
  [deleted]
- fzzzy 5y ago
  Tim Apple
  - kube-system 5y ago
    He doesn't own Apple. The owners of some ~17 billions shares of AAPL own Apple.
    - fzzzy 5y ago
      It was a joke. Tim Apple is not a person that exists.
akomtu 5y ago
How would any largish business buy office buildings? I'm sure beneficiaries don't want personal liability.
micromacrofoot 5y ago
I had to buy my house under a trust to avoid a stalker because the ownership records are public. It's still possible to find me if you search the trust name (but you need to know the name first). It's been enough obscurity so far. I loathe the idea of public records required to show my name.
mashmac2 5y ago
Businesses don't have one owner. Think about all of the properties that a company like Apple owns. Now, if you're specifically referring to residential properties, maybe.... although there are lots of mixed-use properties, and ownership of land can be separate from the house that's on it, etc
- fock 5y ago
  so why do these businesses have to own their land then? Just let them only lease it...
  - kube-system 5y ago
    That might "solve" the Apple scenario but it's hardly universal. Many businesses lien or deal in land. For instance, mortgages as we know them would not exist without liens.
- HWR_14 5y ago
  Since he said "non-LLC owner", it pretty clearly is trying to tie ownership to a single (or married) real person owner. They probably intended to limit this to residential properties.
mindslight 5y ago
First, it destroys the entire mechanism of LLC protection. Second, privacy is a human right. You should not be forced to list yourself in a publicly accessible database to own real estate. Needing to pay a trustee to avoid this is bad enough. Registering the beneficial owners of entities privately with the government is as far as makes sense. Of course then we run into the problem that government isn't terribly incentivized to do enough analysis to catch the large scale evaders.
- munk-a 5y ago
  > Second, privacy is a human right. You should not be forced to list yourself in a publicly accessible database to own real estate. Needing to pay a trustee to avoid this is bad enough. I think there is a core of truth here - individual persons should not be forever tied to business they've worked for. Everyone should always have the right to "walk away". However - while you're executing actions on behalf of a business you should not have a right to privacy of your actions - you are actively executing them and if you're doing shady or illegal things that should be knowable. Freedom of speech doesn't free you from the consequences of that speech - and I think it's unreasonable to demand to be free from the consequences of your actions. I do whole-heartedly agree with your final point though - it's the beneficiaries that should be on the hook as the first point of contact - agents of the company may be shielded by the company but the beneficiaries should achieve that shield by making themselves clear points of contact.
  - mindslight 5y ago
    > while you're executing actions on behalf of a business you should not have a right to privacy of your actions Generally you don't. Most states require you to publicly declare managers of LLCs, and trustees of real estate. > it's the beneficiaries that should be on the hook as the first point of contact Nowhere did I suggest that beneficiaries should be points of contact, or otherwise available in a public database.
danans 5y ago
Because the primary function of an LLC is limiting financial (not criminal) liability of the owners, and the liability of the directly named owner would not be limited. Only 4 states in the US allow anonymous LLCs anyways: Delaware, Nevada, New Mexico, and Wyoming. The problem is that even with owner's identities, unless you follow the trail of money very far, it's hard to know whether the capital is clean or not.
- oh_sigh 5y ago
  Saying only 4 states allow it is mostly meaningless when one of those states is the state that by far registers the most companies per year.
  - munk-a 5y ago
    It's not meaningless - but it is good to observe that there's a bit of a tragedy of the commons when it comes to state-wise incorporation requirements. The weakest link effectively dictates for the rest of the nation. Delaware has incredibly low incorporation fees, taxes and disclosure requirements - and thus every other state just has to shrug and take it due to federal control of limitations on interstate commerce.
- vmception 5y ago
  there are many of states and entity types where the owner/member/director/principle disclosure requirement happens a long time later you can form companies, do the transaction, dissolve the company or let the state dissolve it automatically eventually the record of the title the stays as is, regardless who (or what) the property ownership passed through to but real estate aside, I know people do political contributions this way
  - danans 5y ago
    I agree that LLCs can be abused. The answer to this is stronger enforcement of anti-money-laundering, not preventing LLCs from owning property. But increasing investigation and enforcement of money laundering laws requires the political will of state prosecutors, who are usually elected officials. Only recently have prosecutors willing to actively go after this stuff (like AG Letitia James in NY). LLCs have a useful function (allowing business that limit their owners personal exposure to the business's liabilities, and vice versa).

Why is requiring each property to have a named, non-LLC owner not feasible?

monkeywork 5y ago

who should be marked down as the property owner of Apple's campus?

deleted 5y ago
[deleted]
fzzzy 5y ago
Tim Apple
- kube-system 5y ago
  He doesn't own Apple. The owners of some ~17 billions shares of AAPL own Apple.
  - fzzzy 5y ago
    It was a joke. Tim Apple is not a person that exists.

akomtu 5y ago

How would any largish business buy office buildings? I'm sure beneficiaries don't want personal liability.

micromacrofoot 5y ago

I had to buy my house under a trust to avoid a stalker because the ownership records are public. It's still possible to find me if you search the trust name (but you need to know the name first). It's been enough obscurity so far. I loathe the idea of public records required to show my name.

mashmac2 5y ago

Businesses don't have one owner. Think about all of the properties that a company like Apple owns. Now, if you're specifically referring to residential properties, maybe.... although there are lots of mixed-use properties, and ownership of land can be separate from the house that's on it, etc

fock 5y ago
so why do these businesses have to own their land then? Just let them only lease it...
- kube-system 5y ago
  That might "solve" the Apple scenario but it's hardly universal. Many businesses lien or deal in land. For instance, mortgages as we know them would not exist without liens.
HWR_14 5y ago
Since he said "non-LLC owner", it pretty clearly is trying to tie ownership to a single (or married) real person owner. They probably intended to limit this to residential properties.

mindslight 5y ago

First, it destroys the entire mechanism of LLC protection. Second, privacy is a human right. You should not be forced to list yourself in a publicly accessible database to own real estate. Needing to pay a trustee to avoid this is bad enough. Registering the beneficial owners of entities privately with the government is as far as makes sense. Of course then we run into the problem that government isn't terribly incentivized to do enough analysis to catch the large scale evaders.

munk-a 5y ago
> Second, privacy is a human right. You should not be forced to list yourself in a publicly accessible database to own real estate. Needing to pay a trustee to avoid this is bad enough. I think there is a core of truth here - individual persons should not be forever tied to business they've worked for. Everyone should always have the right to "walk away". However - while you're executing actions on behalf of a business you should not have a right to privacy of your actions - you are actively executing them and if you're doing shady or illegal things that should be knowable. Freedom of speech doesn't free you from the consequences of that speech - and I think it's unreasonable to demand to be free from the consequences of your actions. I do whole-heartedly agree with your final point though - it's the beneficiaries that should be on the hook as the first point of contact - agents of the company may be shielded by the company but the beneficiaries should achieve that shield by making themselves clear points of contact.
- mindslight 5y ago
  > while you're executing actions on behalf of a business you should not have a right to privacy of your actions Generally you don't. Most states require you to publicly declare managers of LLCs, and trustees of real estate. > it's the beneficiaries that should be on the hook as the first point of contact Nowhere did I suggest that beneficiaries should be points of contact, or otherwise available in a public database.

danans 5y ago

Because the primary function of an LLC is limiting financial (not criminal) liability of the owners, and the liability of the directly named owner would not be limited. Only 4 states in the US allow anonymous LLCs anyways: Delaware, Nevada, New Mexico, and Wyoming. The problem is that even with owner's identities, unless you follow the trail of money very far, it's hard to know whether the capital is clean or not.

oh_sigh 5y ago
Saying only 4 states allow it is mostly meaningless when one of those states is the state that by far registers the most companies per year.
- munk-a 5y ago
  It's not meaningless - but it is good to observe that there's a bit of a tragedy of the commons when it comes to state-wise incorporation requirements. The weakest link effectively dictates for the rest of the nation. Delaware has incredibly low incorporation fees, taxes and disclosure requirements - and thus every other state just has to shrug and take it due to federal control of limitations on interstate commerce.
vmception 5y ago
there are many of states and entity types where the owner/member/director/principle disclosure requirement happens a long time later you can form companies, do the transaction, dissolve the company or let the state dissolve it automatically eventually the record of the title the stays as is, regardless who (or what) the property ownership passed through to but real estate aside, I know people do political contributions this way
- danans 5y ago
  I agree that LLCs can be abused. The answer to this is stronger enforcement of anti-money-laundering, not preventing LLCs from owning property. But increasing investigation and enforcement of money laundering laws requires the political will of state prosecutors, who are usually elected officials. Only recently have prosecutors willing to actively go after this stuff (like AG Letitia James in NY). LLCs have a useful function (allowing business that limit their owners personal exposure to the business's liabilities, and vice versa).