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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
by 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 agoSaying 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 agoIt'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 agothere 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 agoI 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).
- vmception 5y agoI was just correcting you, I am completely fine with the current reality and wasnt advocating for anything
- danans 5y agoSure, and for my part, I'm not OK w/ the current reality as you describe it and would strongly consider voting for an AG candidate with a platform that included going after shady LLCs.
- vmception 5y agoAn AG needs probable cause for a criminal charge to subpoena all intermediaries, and "shady LLCs" lack probable cause. Similarly, a federal money laundering charge requires an illicit origin, so since the state doesn't know the origin and has no probable cause on what specifically criminal (or non-criminal) origin there is, indiscriminately going after random property owners and random LLCs is going to get curb stomped by every judge in the union. Fishing expeditions don't cut it in this country. Anonymity doesn't require a lack of paper trail. Only a benign paper trail. What did you have in mind for such AG to do?
- danans 5y agoOf course they wouldn't go trawling through LLCs. They would use probable cause established outside. LLCs are just a means for some crimes, not a cause in and of themselves.
- miohtama 5y agoAnonymous LLCs were forbidden in the EU couple of years back. Ultimate Beneficial Owners, or min. 25% stakes, need to be declared in Companies House. Of course, London real estate market complained loudly.