Shell is either the best friend of suspicious business executives or a legitimate business entity that helps companies better track assets.
Of course, it depends on who you talk.
Formally, shell companies are commercial entities established to protect or even hide the company's assets in a completely legal way.
In the real world, shell companies often do not have identifiable business operations or generate any real assets, and are used by companies as tools to control or even disguise assets.
Shell companies can be created in many ways.
For example, an anonymous shareholder of a company bought enough shares of Shell to take full control of the company and eventually merge with a private company.
The result is public.
The trading entity is called the shell company because, except for the "shell", there is little left over from the original company that was acquired.
"In the new company, the shareholders have all control, get most of the shares of the listed company, and use this leverage to control the new company --
And control its board.
Structurally, Shell has to register in the country it created.
Shell companies in the United States, for example. S.
Must register with the United States. S.
Securities and Exchange Commission
Companies and other entities that create shell typically employ a registered agent who is very sensible about how Shell operates in its founding country.
Their workload is administrative in nature, dealing with paperwork, and cutting off bureaucratic red tape that is often accompanied by the opening of any company overseas.
Registered Agents must register their names when opening shell companies, as well as the names of nominal owners or directors of shareholders, to complete the registration process.
According to the country that created shell, the price of the company was very different, and the prices of large companies ranged from thousands of dollars to hundreds of dollars.
An in-depth study of Shell reveals how much the company relies on Shell's other lucrative ways.
These benefits are at the top of the list.
Tax avoidance is the key.
Ultimately, the goal of any shell company is to avoid paying taxes to the federal and state governments.
In fact, tax evasion is the real reason for Shell's existence.
Basically, as long as the assets held in the shell company are earned abroad (
From an accounting point of view, they are)
Then these assets are completely legal and cannot be taxed by outside countries.
Companies set up shell companies overseas
From a tax point of view, more efficient coastal venues (
This is why they are called "tax havens ". )
These tax havens are found in popular taxes.
Favorable offshore hotspots such as Panama, the Cayman Islands or Switzerland are well suited to this bill.
Basically, by parking the company's assets on Shell's offshore exchange, a company can conceal the assets from Uncle Sam and greatly reduce their tax burden in the process.
It separates the company from the chaos.
National economic conditions.
By storing the company's assets in Shell, the company can also protect its assets from the impact of an unstable national economy.
Take Greece a decade ago, where the public is making trouble on the streets of the National Economic Belt --
Austerity and inflation and soaring national deficits.
Or, just recently, given Venezuela's sharp economic downturn in the second half of the past decade, people starving and businesses failing.
However, if a regional company puts assets in an offshore shell company, the capital will be protected and the company will not be affected by the toxic national economy that devours the assets of other companies.
Shell, which sells vehicles.
Businesses can also use shell entities to protect assets from taxes by selling shell.
For example, a company may direct assets to a shell company and then sell the shell company to protect the assets of the shell company from taxes.
Suppose a company has a large amount of real estate assets listed as part of a shell company.
In this case, the company can sell shell (
With it, real estate)
Avoid fees and taxes usually associated with property ownership and create more profits for the property.
Enter the foreign market.
In addition to benefiting from lower taxes, shell provides the company with access to potentially lucrative foreign business markets.
For example, the organization that established a shell company in Switzerland, Panama, not only received tax incentives, but also had local personnel in those countries --
You can point the company to contacts for other business opportunities in Latin America or Europe, respectively.
Shell has amazing flexibility in conducting joint business on behalf of shareholders.
Shell can open bank and brokerage accounts, transfer funds within and outside the company, conduct regular financial transactions, purchase real estate and purchase other companies, and hold copyright and royalties.
This is just the beginning.
Shell can also be used to make hostile acquisitions against another company, or to hold assets for the creation of a new company.
Shell can even hide the identity of shareholders, executives and others associated with shell, not only avoiding regulators and tax officials, but avoid more cunning roles such as criminals and fraudsters who may want to steal assets and threaten their security.
Not all shell companies are good.
There is a clear risk of running a shell company: the optical system may be negative.
For the outside world, shell companies may have public relations problems.
If a shell company is used to transferring jobs from major national brands, and there is also a risk of shifting shareholders or customers, then the company may lose its business and suffer in the stock market
Growth stalled.
In the view of shareholders and potential shareholders of a major national brand, it is also disturbing that the suspicious flow of funds abroad.
For example, if a company makes profits abroad and stores them in a shell company, rather than using the money to study new products and hire new workers, for shareholders and investors, this could be a mistake.
They will most likely see the move as self-directed.
This indulgence does not help the company's growth and increase in profits.
Legal troubles.
If a shell company gets the attention of the IRS or federal regulators, it may give a black eye to the underlying company that started the shell company --
Or worse, lead them on the path to litigation.
If a company can't justify its shell company, bad publicity is probably the least important thing about it.
Gray area of "criminal enterprise.
"Although Shell has passed the legal odor test, they can be used for criminal purposes, which may be brought to the attention of law enforcement.
This is not universal, but it is well known that shell companies will launder money and engage in illegal commercial activities such as selling drugs, hiding money from the sale of illegal weapons, or participating in large-
Large-scale sex trading
There is no doubt that shell companies are legal, but even then it is hard to make them pure in the public eye. Shell can play a key role in managing physical assets and controlling the flow and storage of those assets without any prying eyes.
Confidential operations are often considered a huge positive factor in business.
What commercial entities get when they open a shell company is secrecy.
Good or bad.
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