Why are shell companies legal?

[safeinOhio]

Other than corruption, tax evasion or just hiding money, what purpose do they serve?

[SWBTATTReg]

1. Good question and one I wish would be answered. Only time I hear of shell companies, is ...

(1) Panama papers where bunch of shell companies representing wealthy avoiding taxes were created;
(2) Shell companies created to hide ownership of assets for avoiding responsibilities of insurance or taxes;

[safeinOhio]

2. Wikipedia

just had to look it up..mostly up to no good. Need regulated if no just made illegal..



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A shell corporation is a company or corporation that exists only on paper and has no office and no employees, but may have a bank account or may hold passive investments or be the registered owner of assets, such as intellectual property, or ships. Shell companies may be registered to the address of a company that provides a service setting up shell companies, and which may act as the agent for receipt of legal correspondence (such as an accountant or lawyer). The company may serve as a vehicle for business transactions without itself having any significant assets or operations. Sometimes, shell companies are used for tax evasion, tax avoidance, and money laundering, or to achieve a specific goal such as anonymity. Anonymity may be sought to shield personal assets from others, such as a spouse when a marriage is breaking down, from creditors, from government authorities, besides others.
Shell companies do have legitimate business purposes. They may, for example, act as trustee for a trust, and not engage in any other activity on its own account. This structure creates limited liability for the trustee. A corporate shell can also be formed around a partnership to create limited liability for the partners, and other business ventures, or to immunize one part of a business from the risks of another part. Shell companies can be used to transfer assets from one company into a new one, while leaving the liabilities in the former company.

[3Hotdogs]

3. Second paragraph. Thanx.

[lamsmy]

4. Lots of legitimate reasons for shell companies

Other than those listed by Wikipedia. For example if the partners in one company want to bring in new partners without diluting their shares in the original company, or to restructure shareholdings for different operations.

Shell companies per se are not the problem. The fact that the ownership can be hard or impossible to trace is.

[safeinOhio]

5. Then it sounds like ownership

Needs to be easy to trace and open to anyone that wishes to look into it. Otherwise, they are not worth it.
At least there should be a public debate on the laws about shell companies.

[ronatchig]

6. The existence of shells is no less

Useful to immoral behavior than any other corp. Both are used to protect the culpable from the results of their illegal- immoral actions in the pursuit of wealth(the act of taking from others).

Imho. The idea of corporations ,as is used in our world, should be outlawed. Everyone should be personally accountable for their words and deeds. Spreading the money around is merely spreading the blame for the evils done by the greedy and power hungry.

I'll step down off my soap box now.