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Tue Jan 22, 2019, 10:02 AM

Shell Corporations....What are they good for...absolutely nothing.

Anyone running for national office calling for ending them?

https://en.wikipedia.org/wiki/Shell_corporation

Very few reasons to even allow them. Only purpose is to hide money and take away responsibility from rich powerful people.

11 replies, 538 views

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Reply Shell Corporations....What are they good for...absolutely nothing. (Original post)
safeinOhio Jan 2019 OP
beachbum bob Jan 2019 #1
safeinOhio Jan 2019 #2
Poiuyt Jan 2019 #3
safeinOhio Jan 2019 #4
unblock Jan 2019 #5
Wounded Bear Jan 2019 #6
unblock Jan 2019 #7
safeinOhio Jan 2019 #8
unblock Jan 2019 #10
fescuerescue Jan 2019 #9
unblock Jan 2019 #11

Response to safeinOhio (Original post)

Tue Jan 22, 2019, 10:06 AM

1. you answered your own question of what they are good for....and why they remain untouchable

 

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Response to beachbum bob (Reply #1)

Tue Jan 22, 2019, 10:08 AM

2. I've asked some business types the same question.

They go on and on and never really answer my question. That says a lot to silly old me.

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Response to safeinOhio (Original post)

Tue Jan 22, 2019, 10:09 AM

3. Say it again!

Good God, y'all!

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Response to Poiuyt (Reply #3)

Tue Jan 22, 2019, 10:11 AM

4. OK

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Response to safeinOhio (Original post)

Tue Jan 22, 2019, 10:53 AM

5. our business creates what could technically be called "shell companies" all the time.

it has perfectly legitimate uses, although, like many things, it could also be done for illegitimate reasons as well.

we use them to help companies effectively borrow money against assets.

a lender might be unwilling to lend to the company directly due to concerns about the company going bankrupt. or they may be willing to lend, but only at a very high interest rate. yet, the company has some reliable assets to offer as collateral.

to solve this problem, we create a shell company, typically called a "special-purpose entity". the reliable assets are sold to the shell company and the lender can then lend to that shell company. the shell company has no employees.

the lender is willing because the shell company is designed to not get sucked into any bankruptcy of the actual company.

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Response to unblock (Reply #5)

Tue Jan 22, 2019, 10:57 AM

6. So, legalized fraud?



California has been using that kind of shit for years to get around Prop 13 taxes.

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Response to Wounded Bear (Reply #6)

Tue Jan 22, 2019, 11:01 AM

7. nothing fraudulent about it. who is being deceived in this?

the only people who lose out in a bankruptcy is the other creditors who don't get the benefit of those assets that can't be sucked into the bankruptcy -- but those other creditors have to approve the whole arrangement in the first place, or it doesn't happen.

and usually, they are happy to permit it, because the arrangement improves their own chances of getting paid out in full, and the chances of the company avoiding bankruptcy altogether.

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Response to unblock (Reply #7)

Tue Jan 22, 2019, 01:14 PM

8. Used to hide assets from spouses, they get hurt...

Used to avoid taxes, so we have to pay more.

trump has over 500 of them and that says it all.

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Response to safeinOhio (Reply #8)

Tue Jan 22, 2019, 01:26 PM

10. like i said, they can be used for illegitimate purposes.

i'm just saying they also can be used for perfectly reasonable purposes as well.

simply banning them isn't a good solution, at least not without finding some way to preserve the legitimate uses.

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Response to unblock (Reply #7)

Tue Jan 22, 2019, 01:23 PM

9. Alot of people don't understand corporate structuring

They get all weirded out by the term corporate and assume that it's just everyone who works there is evil.

Fact is, our tax structure and liability laws practically require them.

If people were hemmed in and couldn't take risks with a portion of their money, we would be a third world country right now.

Imagine if funders of Google didn't get involved, because they were afraid of risking ALL the money their great-great-great grandfather earned.

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Response to fescuerescue (Reply #9)

Tue Jan 22, 2019, 01:34 PM

11. yes, exactly! thanks!

there are certainly plenty of businesses and individuals and corporate structures that do illegal or immoral things. these are usually the ones that make the news.

but it doesn't mean that every business is evil, nor every corporate structure.

i believe in regulation and enforcement to reduce and deter the inappropriate uses, but i believe in making them available for legitimate uses.

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