2000 shell companies at one address in Wyoming(news.yahoo.com)
news.yahoo.com
2000 shell companies at one address in Wyoming
http://news.yahoo.com/special-report-little-house-secrets-great-plains-113759191.html
9 comments
As I was reading the article I thought about how trying to increase regulation of this type of activity would kill entrepreneurship in this country.
The article had a negative slant to it, and there are legitimate benefits to this service.
Perhaps some are upset because only the ultra-wealthy should be allowed such privilege?
http://www.rollingstone.com/politics/news/the-real-housewive...
The article had a negative slant to it, and there are legitimate benefits to this service.
Perhaps some are upset because only the ultra-wealthy should be allowed such privilege?
http://www.rollingstone.com/politics/news/the-real-housewive...
In Italy, you have to have thousands of Euros available to start a limited liability company and it sucks. It's just a complete and total negative in my opinion.
We can all argue about the ideal level of taxation, but don't tax companies until they're actually making money.
We can all argue about the ideal level of taxation, but don't tax companies until they're actually making money.
In the UK setting up a limited company is extremely easy - here is one site offering limited companies for £2.99 in 3 hours:
http://www.eacbs.com/
http://www.eacbs.com/
I've set up my company (Stochastic Technologies) using one of these services and I can attest to it. I paid about 15 GBP, not 3, but it was ready in half an hour. The HMRC (the equivalent of the IRS) people are as polite and accommodating as people who take your money should be, and everything was very straightforward to do.
Can I just ask something on an unrelated note, since you've been down this road: what are the costs of a Limited Company, in the long run? I've read that when tax time arrives, it's nearly impossible for a non-accountant to do, and so it'll cost a minimum of £400 for even the smallest company. Not a crazy amount, of course, but it'd put a dent in the profits of a young startup or side project. What's your experience been like?
That is accurate, I had accountants quote me £1,000 or more for ten invoices a year. It's absolutely crazy for something that takes two hours a year to do, and it seems to me like the space is ripe for disruption.
Fortunately, I found a much, much cheaper accountant. I don't know if it'll come back to bite me in the long run, but it was the only way to keep the company profitable.
Fortunately, I found a much, much cheaper accountant. I don't know if it'll come back to bite me in the long run, but it was the only way to keep the company profitable.
By cheap, is that near to my £400, or even less?
And with some tax planning no company would pay any tax... It's pretty easy to hide profits in the books
I said 'making money' which is a bit ambiguous. At the very least, I think that if there is no income, there should be no taxes. After that... sure, it's complicated.
Point being, thousands of euro to open a company is ludicrous and harmful to aspiring entrepreneurs who are not already wealthy.
Point being, thousands of euro to open a company is ludicrous and harmful to aspiring entrepreneurs who are not already wealthy.
Where does this money go? I opened a company in Cyprus and paid a few thousand Euros, but it turned out that this was all for lawyers and accountants, and what was actually necessary was only filling out a few forms and 10 euros, if I recall correctly.
Minimum 10,000 euros of capital, although you can sort of get around that and "get away" with 2500. Yes, you can invest that in your company, but it's still sort of stupid to have to do it. Also, a notary must be involved, and they have a pretty hefty fee. Also, you must have an accountant involved, and then there are various taxes and fees to pay.
Oh wow, that's... bad.
For startups it wouldn't hurt to just disclose the names of the beneficial owners, right? But that would reduce the advantage for those that want to hide their assets.
The practice of using a "shelf" corporation to convince customers that a newly-formed company has existed for several years hardly seems "100% legit" to me. It may be technically legal, but it's definitely deceptive to one's customers.
To quote Carnivale, "I've never heard an honest man use the word 'legit'."
Wait until you hear about 2711 Centerville Road, Wilmington, Delaware.
Such shady entities registered there include "Level 3 Communications", "California Pizza Kitchen", "The Walt Disney Company", "Dole Food" and "Qualcomm".
Seriously, all those companies are Delaware corporations who maintain their registered office at that address, despite the fact that their CEO has probably never visited that address in their lives.
This is such a common occurrence that it hardly merits notice. Even if you throw in the observation that dubious businesses favor incorporation in Wyoming (which has no corporate income tax, franchise tax or tax on corporate shares), that's still not saying much.
Such shady entities registered there include "Level 3 Communications", "California Pizza Kitchen", "The Walt Disney Company", "Dole Food" and "Qualcomm".
Seriously, all those companies are Delaware corporations who maintain their registered office at that address, despite the fact that their CEO has probably never visited that address in their lives.
This is such a common occurrence that it hardly merits notice. Even if you throw in the observation that dubious businesses favor incorporation in Wyoming (which has no corporate income tax, franchise tax or tax on corporate shares), that's still not saying much.
There's a nice golf course right behind that address. I imagine quite a few CEOs have stopped by.
If you think that's bad, several major 'USA' companies are lobbying USA congress for a tax break as an incentive to return money back to USA from tax havens [0].
[0] http://www.bloomberg.com/news/2011-06-28/biggest-tax-avoider...
[0] http://www.bloomberg.com/news/2011-06-28/biggest-tax-avoider...
Why should the U.S. tax capital, earned outside of the U.S., when it is invested back in America?
In fact, since repatriated capital will be deployed inside the US, likely to produce more profits which can then be taxed... taxing repatriated money is a drag on the economy and reduces future tax income. (I don't know if the effect is large or small, but I think it is large.)
The current proposals don't require the money be invested in America. Most of it will likely be paid out to shareholders as dividends. The article the parent links to provides more discussion.
I'll be registering my company in Delaware. Why the hell wouldn't I?
Because if you don't live in DE, it can be a pain if legal action ever comes up. I've read that the "home court advantage" is very real.
Also, people often establish companies in tax-free states thinking that they'll avoid taxation. But nexus will bite you. By living in a state, or doing work in a state beyond sales, you establish nexus and are responsible for state income tax.
Also, people often establish companies in tax-free states thinking that they'll avoid taxation. But nexus will bite you. By living in a state, or doing work in a state beyond sales, you establish nexus and are responsible for state income tax.
Such special purpose companies[1] are quite common and don't necessarily indicate any "shady" practices.
[1] http://en.wikipedia.org/wiki/Special_purpose_entity
[1] http://en.wikipedia.org/wiki/Special_purpose_entity
Business hackers.
My favorite use of shell corporations in fiction so far is in Accelerando [1] - corporations start out as python scripts:
[1] - http://www.amazon.com/Accelerando-Singularity-Charles-Stross...
[1] - http://www.amazon.com/Accelerando-Singularity-Charles-Stross...
Available for free on the author's website: http://www.antipope.org/charlie/blog-static/fiction/accelera...
It would be good if one could do something along the lines of
from legal.entities import Company
jamestech = Company(address='2711 Wyoming Road')
jamestech.register()
That would be awesome.
from legal.entities import Company
jamestech = Company(address='2711 Wyoming Road')
jamestech.register()
That would be awesome.
If you consider somebody doing an auto-install of Wordpress on a managed host a hacker.
I think this article is inaccurate and overhyped. First of all, I run a similar company that does this in Nevada. We are the "Registered Agent" for thousands of companies. All it means is that we are the address the state can send their "Annual Report" paperwork to and a process server can deliver and have legal docs signed for. The Registered Agent must have an address in the state and be available during business hours. These aren't "shell" companies - every company in NV from Amazon to Zappos has to have an agent.
At some point, I hope people realize that the tax code is for the rich.
I think that is the problem the government has with these services. They are too affordable.
Only $10k for an LLC from 1997, plus $2,500 to have attorney client privilege?
Only the ultra-rich should be allowed to do stuff like this.
Only $10k for an LLC from 1997, plus $2,500 to have attorney client privilege?
Only the ultra-rich should be allowed to do stuff like this.
Pardon me but it only makes sense to do this if you are making mounds of cash. Otherwise the cost for compliance will easily eat up any excess profit. Even very profitable companies don't do this, so you should ask yourself why.
...and there are plenty of shared offices and pseudo-offices in the Embarcadero Center in San Francisco. Unexpected != shady.
I started a Wyoming "close corporation" (unique to WY and awesome for small businesses) last spring, and used FreeRegisteredAgent.com aka Incorp.com as my registered agent. They do the first year free, $99/yr after that. They weren't the fastest responders, but when I dissolved the company a year later they did get back to me, and it didn't prove to be a scam.
I don't have my numbers handy, but in the end I calculated that it would cost something like $1,000 per year to even begin to legitimize a presence in Wyoming. You'd need a mail forwarding service in the state, of which there are few. You'd also almost certainly want a state driver's license, and some of the mail forwarding and registered agent companies will let you use their address for that!
Incidentally, I went with Wyoming because NV and DE have both started charging rather steep annual licensing fees.
(the reason for all this, by the way, is because my plan was to live abroad and do some coding on the side, which puts me in a strange tax situation, and costs had to be extremely low.)
I started a Wyoming "close corporation" (unique to WY and awesome for small businesses) last spring, and used FreeRegisteredAgent.com aka Incorp.com as my registered agent. They do the first year free, $99/yr after that. They weren't the fastest responders, but when I dissolved the company a year later they did get back to me, and it didn't prove to be a scam.
I don't have my numbers handy, but in the end I calculated that it would cost something like $1,000 per year to even begin to legitimize a presence in Wyoming. You'd need a mail forwarding service in the state, of which there are few. You'd also almost certainly want a state driver's license, and some of the mail forwarding and registered agent companies will let you use their address for that!
Incidentally, I went with Wyoming because NV and DE have both started charging rather steep annual licensing fees.
(the reason for all this, by the way, is because my plan was to live abroad and do some coding on the side, which puts me in a strange tax situation, and costs had to be extremely low.)
(I would only contact them a few times a year, but when I did, the lady on the phone would remember me, "Oh hi Derek! How are things in the music biz?")
Their service is 100% legit, they're prompt and friendly, and I recommend them highly.
http://www.wyomingcompany.com/
As most of us know here, there are many valid reasons to set up your corporation in a neutral place that is not your current residence.
Maybe you're online-only and traveling the world.
Maybe you're starting your business in one place for now, but you feel kinda "one foot out the door", and feel you're going to move it somewhere else some day.
Or maybe just because you want to, it's legal, and you need no other reason than that.