8 ms·

These are great techniques and helpful advice, but note that they are basically of zero use whatsoever in the case of (for instance) a Delaware LLC. The amoun

These are great techniques and helpful advice, but note that they are basically of zero use whatsoever in the case of (for instance) a Delaware LLC. The amount of information regarding beneficial ownership that’s out there varies by jurisdiction and entity type - and again, these tips are great ways to dig into those and quite likely come up with some interesting findings in a lot of cases - but in most cases a Delaware LLC is basically a black box.

jgalt212 3y ago
very true, but you can glean some clues regarding any entities that came before the Delaware LLC, or another state LLC that has a similar name, or does transactions with the Delaware LLC. Or you can search on those you think may be involved with the Delaware target. Their names often show up in other less opaque filings. So, you man not find the smoking gun, but you can sure gin up a lot of smoke.
- nocoiner 3y ago
  For sure. By way of further example, if you’re looking into land owned by an LLC (or other entity), the LLC had to be conveyed that land at some point - searching the county grantor/grantee index of deeds will turn up who owned the land before and may be suggestive as to who owns the LLC (or maybe not - maybe ownership of the LLC was conveyed instead of the real property interests specifically to avoid showing up in the county records - it’s a fun puzzle).
- lsllc 3y ago
  In fact many states require LLCs created in other states to register as a foreign entity if they do any business in that state (incl. having a presence there). For example in Massachusetts [0]: Pursuant to M.G.L. Chapter 156C, §48, a foreign limited liability company doing business in the Commonwealth must submit to the Corporations Division within ten days after it commences doing business in the Commonwealth, an application for registration as a foreign limited liability company ... So even if you form your LLC in Delaware, if you live/work/conduct business in Mass, then you must also register there -- it costs $500/yr and the statute requires that a non-trivial amount of information about the company be supplied including the names/addresses of "managers" for the entity as well as the registered agent. I don't know what the privacy laws for foreign entities in registered in MA are (if any), but I suspect not the same as say Delaware. If you have a footprint in more than one state, you may be required to file as a foreign entity in multiple states. [0] https://www.sec.state.ma.us/divisions/corporations/filing-by-subject/limited-liability/corporations-foreign-limited-liability-company.htm https://www.sec.state.ma.us/divisions/corporations/filing-by...
binarymax 3y ago
I didn't know this until I searched for myself in the linked OpenCorporates site - was surprised to see my Delaware LLC not listed. How/why is this true? IMO it should be straightforward to find the owner/director of a US based corporate entity.
- sealeck 3y ago
  A lot of jurisdictions do maintain a beneficial owners database (e.g. Companies House in the UK maintains a list of all companies) but often these are not public. For example the ECJ recently made these illegal in the EU (see e.g. https://www.ft.com/content/e4b31a4e-a79d-40f7-8a19-c1e451a95c4b https://www.ft.com/content/e4b31a4e-a79d-40f7-8a19-c1e451a95...).
  - Animats 3y ago
    That may clash with the European Directive on Electronic Commerce for businesses which do anything online. If you just have a shell company to own your yacht, that may be entitled to privacy, but if you do transactions online within the EU, the entity has to be properly identified.[1] [1] https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32000L0031:EN:HTML https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX...
- throwaway22032 3y ago
  Why should it be true?
- tomrod 3y ago
  Banks require additional paperwork for Delaware-registered LLCs because they can't search the company structure directly at the Secretary of State website (this was explained to me last week).
- lobochrome 3y ago
  Because the US, after bullying countries like Switzerland, Lichtenstein and Luxembourg to clean house, is now left as the single biggest western tax haven in the world.
yieldcrv 3y ago
from the article: > While often partly obscured by secrecy jurisdictions — such as the British Virgin Islands, Panama, Cyprus, or Cayman Islands ….. I wish people were in a place to see where the ICIJ is misguided, like they play into a sentiment that is widely shared but heavily misunderstood For example, the Cayman Islands was assumed to be super secret and shady and then the results of their information sharing agreement came out and it turns out the Delaware was waaay more heavily used and way more secretive. Jumping the US to the least transparent jurisdiction…. Up from spot number 2. All this offshore money hiding stigma is capturing the minds of people that are being intentionally mislead. Not by the ICIJ theyre just as misled. just the collective apparatus of a more powerful state that does protectionist things for its own industries against smaller nations states. The US has difficulty bullying its constituent member states, and directs all of that angst outwards to anyone competitive, while the US is a bigger market participant in the same behaviors the whole time! for both foreigners looking to hide ownership and money, and citizens, the US onshore offers a catalogue thats at parity or superior to financial services microstates, and flies under all scrutiny
- FireBeyond 3y ago
  > the Cayman Islands was assumed to be super secret and shady ... it turns out the Delaware was waaay more heavily used and way more secretive Ugland House in the Caymans. 10,000sq ft, 5 stories. Registered offices of forty-two thousand companies. Corporation Trust Center at 1209 North Orange Street, Wilmington, Delaware, United States, "home" to over 285,000 Delaware corporations.
  - yieldcrv 3y ago
    that's a decent example, there are other many addresses and other ways of counting straight from ICIJ itself "US lands top spot as world’s biggest enabler of financial secrecy in new index" https://www.icij.org/investigations/pandora-papers/us-lands-top-spot-as-worlds-biggest-enabler-of-financial-secrecy-in-new-index/ https://www.icij.org/investigations/pandora-papers/us-lands-... > Meanwhile, the Cayman Islands, which ranked first in 2020, dramatically dropped to No. 14 in this year’s index, after disclosing new data on the financial services it provides to foreigners. in reality, it should have always been No. 14 or assumed to be operating the way it was, and it was just assumed to be far bigger and shadier than reality. where no information is assumed to mean bad information. that's just not the case. there are robust domestic ways to avoid claims on assets and money even from tax authorities, stigmatizing the entire offshore industry is just protectionist mentality.
dimal 3y ago
How on earth is this legal?
- doublerabbit 3y ago
  First state of America.
- JumpCrisscross 3y ago
  > How on earth is this legal? It massively simplifies reporting requirements. If you’re forming a Delaware entity, you file and go.
- codexb 3y ago
  There's no way to solve this problem short of public, government registration of all cash and assets, which has been done before, but which most people are wary of, and for good reason. There are so many ways that a person can be the beneficiary of a corporation that is not technically "owned" by them, depending on how you define "own". Does the corporation issues stock? Do they have investor agreements? Is it just a loan agreement? You'd have to register all those different documents. Follow that all the way down and you eventually have to register all assets and cash. In the end, there's very little legitimate legal reason to have to know precisely who controls an asset or cash, so long as someone is responsible for the public obligations of taxes, unless there has been some crime.
  - mathgradthrow 3y ago
    >good reason. skeptical of the "good" qualifier.
    - codexb 3y ago
      Historically, registration of assets has been used by government to seize and tax the property of those they opposed.
      - mathgradthrow 3y ago
Scubabear68 3y ago
Precisely right. There are firms that specialize in listing companies in Delaware and become the official “agent” for the firm. Figuring out who actually controls it is nearly impossible.
1vuio0pswjnm7 3y ago
Are there are other sources for details on ownership of Delaware LLCs. https://www.delawarebusinessincorporators.com/blogs/news/beneficial-ownership-information-reporting-rule-fact-sheet https://www.delawarebusinessincorporators.com/blogs/news/ben... "A. 3. Under the Corporate Transparency Act, who can access beneficial ownership information? FinCEN will permit Federal, State, local, and Tribal officials, as well as certain foreign officials who submit a request through a U.S. Federal government agency, to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement. Financial institutions will have access to beneficial ownership information in certain circumstances, with the consent of the reporting company. Those financial institutions' regulators will also have access to beneficial ownership information when they supervise the financial institutions. [Updated January 4, 2024]" https://www.fincen.goc/boi-faqs https://www.fincen.goc/boi-faqs That includes prosecutors and courts. After an authorised person obtains the information on beneficial ownership from the FinCen database, can they transfer it to their agents. If they share the information with others then will they, in every instance, bind those agents to appropriate obligations of confidentiality. What is the penalty if the information gets leaked, accidentally. If it is leaked, then what incentives are there to pursue enforcement. Arguably, for those affected, it's too late. The information has become public. There is no way to put the genie back in the bottle. https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X/part-1010/subpart-J/section-1010.955 https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X/p... This reporting requirement is relatively new. Maybe it really changes nothing. We shall see. But the number of parties who potentially have access to information about Delaware LLCs has increased, IMHO. At this point, is it even possible to know who might have it.
dade_ 3y ago
Recently there was a book written about Delaware and this problem. What’s the Matter with Delaware?: How the First State Has Favored the Rich, Powerful, and Criminal—and How It Costs Us All https://press.princeton.edu/books/hardcover/9780691180007/whats-the-matter-with-delaware https://press.princeton.edu/books/hardcover/9780691180007/wh...
vmfunction 3y ago
>These are great techniques and helpful advice, but note that they are basically of zero use whatsoever in the case of (for instance) a Delaware LLC. Also it will almost impossible to link WY LLC with proxy ownership. Much of what really matters are hidden being the wall of client attorney privileges.

jgalt212 3y ago

very true, but you can glean some clues regarding any entities that came before the Delaware LLC, or another state LLC that has a similar name, or does transactions with the Delaware LLC. Or you can search on those you think may be involved with the Delaware target. Their names often show up in other less opaque filings. So, you man not find the smoking gun, but you can sure gin up a lot of smoke.

nocoiner 3y ago
For sure. By way of further example, if you’re looking into land owned by an LLC (or other entity), the LLC had to be conveyed that land at some point - searching the county grantor/grantee index of deeds will turn up who owned the land before and may be suggestive as to who owns the LLC (or maybe not - maybe ownership of the LLC was conveyed instead of the real property interests specifically to avoid showing up in the county records - it’s a fun puzzle).
lsllc 3y ago
In fact many states require LLCs created in other states to register as a foreign entity if they do any business in that state (incl. having a presence there). For example in Massachusetts [0]: Pursuant to M.G.L. Chapter 156C, §48, a foreign limited liability company doing business in the Commonwealth must submit to the Corporations Division within ten days after it commences doing business in the Commonwealth, an application for registration as a foreign limited liability company ... So even if you form your LLC in Delaware, if you live/work/conduct business in Mass, then you must also register there -- it costs $500/yr and the statute requires that a non-trivial amount of information about the company be supplied including the names/addresses of "managers" for the entity as well as the registered agent. I don't know what the privacy laws for foreign entities in registered in MA are (if any), but I suspect not the same as say Delaware. If you have a footprint in more than one state, you may be required to file as a foreign entity in multiple states. [0] https://www.sec.state.ma.us/divisions/corporations/filing-by-subject/limited-liability/corporations-foreign-limited-liability-company.htm https://www.sec.state.ma.us/divisions/corporations/filing-by...

binarymax 3y ago

I didn't know this until I searched for myself in the linked OpenCorporates site - was surprised to see my Delaware LLC not listed. How/why is this true? IMO it should be straightforward to find the owner/director of a US based corporate entity.

sealeck 3y ago
A lot of jurisdictions do maintain a beneficial owners database (e.g. Companies House in the UK maintains a list of all companies) but often these are not public. For example the ECJ recently made these illegal in the EU (see e.g. https://www.ft.com/content/e4b31a4e-a79d-40f7-8a19-c1e451a95c4b https://www.ft.com/content/e4b31a4e-a79d-40f7-8a19-c1e451a95...).
- Animats 3y ago
  That may clash with the European Directive on Electronic Commerce for businesses which do anything online. If you just have a shell company to own your yacht, that may be entitled to privacy, but if you do transactions online within the EU, the entity has to be properly identified.[1] [1] https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32000L0031:EN:HTML https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX...
throwaway22032 3y ago
Why should it be true?
tomrod 3y ago
Banks require additional paperwork for Delaware-registered LLCs because they can't search the company structure directly at the Secretary of State website (this was explained to me last week).
lobochrome 3y ago
Because the US, after bullying countries like Switzerland, Lichtenstein and Luxembourg to clean house, is now left as the single biggest western tax haven in the world.

yieldcrv 3y ago

from the article: > While often partly obscured by secrecy jurisdictions — such as the British Virgin Islands, Panama, Cyprus, or Cayman Islands ….. I wish people were in a place to see where the ICIJ is misguided, like they play into a sentiment that is widely shared but heavily misunderstood For example, the Cayman Islands was assumed to be super secret and shady and then the results of their information sharing agreement came out and it turns out the Delaware was waaay more heavily used and way more secretive. Jumping the US to the least transparent jurisdiction…. Up from spot number 2. All this offshore money hiding stigma is capturing the minds of people that are being intentionally mislead. Not by the ICIJ theyre just as misled. just the collective apparatus of a more powerful state that does protectionist things for its own industries against smaller nations states. The US has difficulty bullying its constituent member states, and directs all of that angst outwards to anyone competitive, while the US is a bigger market participant in the same behaviors the whole time! for both foreigners looking to hide ownership and money, and citizens, the US onshore offers a catalogue thats at parity or superior to financial services microstates, and flies under all scrutiny

FireBeyond 3y ago
> the Cayman Islands was assumed to be super secret and shady ... it turns out the Delaware was waaay more heavily used and way more secretive Ugland House in the Caymans. 10,000sq ft, 5 stories. Registered offices of forty-two thousand companies. Corporation Trust Center at 1209 North Orange Street, Wilmington, Delaware, United States, "home" to over 285,000 Delaware corporations.
- yieldcrv 3y ago
  that's a decent example, there are other many addresses and other ways of counting straight from ICIJ itself "US lands top spot as world’s biggest enabler of financial secrecy in new index" https://www.icij.org/investigations/pandora-papers/us-lands-top-spot-as-worlds-biggest-enabler-of-financial-secrecy-in-new-index/ https://www.icij.org/investigations/pandora-papers/us-lands-... > Meanwhile, the Cayman Islands, which ranked first in 2020, dramatically dropped to No. 14 in this year’s index, after disclosing new data on the financial services it provides to foreigners. in reality, it should have always been No. 14 or assumed to be operating the way it was, and it was just assumed to be far bigger and shadier than reality. where no information is assumed to mean bad information. that's just not the case. there are robust domestic ways to avoid claims on assets and money even from tax authorities, stigmatizing the entire offshore industry is just protectionist mentality.

dimal 3y ago

How on earth is this legal?

doublerabbit 3y ago
First state of America.
JumpCrisscross 3y ago
> How on earth is this legal? It massively simplifies reporting requirements. If you’re forming a Delaware entity, you file and go.
codexb 3y ago
There's no way to solve this problem short of public, government registration of all cash and assets, which has been done before, but which most people are wary of, and for good reason. There are so many ways that a person can be the beneficiary of a corporation that is not technically "owned" by them, depending on how you define "own". Does the corporation issues stock? Do they have investor agreements? Is it just a loan agreement? You'd have to register all those different documents. Follow that all the way down and you eventually have to register all assets and cash. In the end, there's very little legitimate legal reason to have to know precisely who controls an asset or cash, so long as someone is responsible for the public obligations of taxes, unless there has been some crime.
- mathgradthrow 3y ago
  >good reason. skeptical of the "good" qualifier.
  - codexb 3y ago
    Historically, registration of assets has been used by government to seize and tax the property of those they opposed.
    - mathgradthrow 3y ago

Scubabear68 3y ago

Precisely right. There are firms that specialize in listing companies in Delaware and become the official “agent” for the firm. Figuring out who actually controls it is nearly impossible.

1vuio0pswjnm7 3y ago

Are there are other sources for details on ownership of Delaware LLCs. https://www.delawarebusinessincorporators.com/blogs/news/beneficial-ownership-information-reporting-rule-fact-sheet https://www.delawarebusinessincorporators.com/blogs/news/ben... "A. 3. Under the Corporate Transparency Act, who can access beneficial ownership information? FinCEN will permit Federal, State, local, and Tribal officials, as well as certain foreign officials who submit a request through a U.S. Federal government agency, to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement. Financial institutions will have access to beneficial ownership information in certain circumstances, with the consent of the reporting company. Those financial institutions' regulators will also have access to beneficial ownership information when they supervise the financial institutions. [Updated January 4, 2024]" https://www.fincen.goc/boi-faqs https://www.fincen.goc/boi-faqs That includes prosecutors and courts. After an authorised person obtains the information on beneficial ownership from the FinCen database, can they transfer it to their agents. If they share the information with others then will they, in every instance, bind those agents to appropriate obligations of confidentiality. What is the penalty if the information gets leaked, accidentally. If it is leaked, then what incentives are there to pursue enforcement. Arguably, for those affected, it's too late. The information has become public. There is no way to put the genie back in the bottle. https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X/part-1010/subpart-J/section-1010.955 https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X/p... This reporting requirement is relatively new. Maybe it really changes nothing. We shall see. But the number of parties who potentially have access to information about Delaware LLCs has increased, IMHO. At this point, is it even possible to know who might have it.

dade_ 3y ago

Recently there was a book written about Delaware and this problem. What’s the Matter with Delaware?: How the First State Has Favored the Rich, Powerful, and Criminal—and How It Costs Us All https://press.princeton.edu/books/hardcover/9780691180007/whats-the-matter-with-delaware https://press.princeton.edu/books/hardcover/9780691180007/wh...

vmfunction 3y ago

>These are great techniques and helpful advice, but note that they are basically of zero use whatsoever in the case of (for instance) a Delaware LLC. Also it will almost impossible to link WY LLC with proxy ownership. Much of what really matters are hidden being the wall of client attorney privileges.