If it is not possible to find out who owns a company, how can the owner really control it? People have to accept that you are the owner, otherwise you don’t really own anything.
From the article: « For example, it’s currently perfectly acceptable for a company just to know who its ultimate owners are, but not to have to tell anyone else.»
What prevents whoever is running the company from just stealing the company, if ownership is not recorded anywhere else?
Just because the ultimate ownership is not publicly available, doesn’t mean that there isn’t legal documentation that could substantiate who the ultimate owners are. Not everything in the world is publicly available.
Also, it is very hard for a company to open a bank account without providing enough information on who the ultimate owners are, as banks are subject to a variety of know your customer (KYC) regulations that are intended to prevent money laundering. Most well established countries where banks operate have very similar KYC regulations.
It’s easy to envisage arrangements under which the ultimate owner of the company can publicly prove his ownership, should he ever need to, but until he does that the ultimate ownership of the company is not not known. It is, however, known to those who need to know (including the company’s directors and shareholders and the company’s bankers).
The real answer is that companies can own other companies ad infinitum so that a “company” can, in reality, be some conglomeration of dozens or hundreds of separate companies. So, while it should be possible to trace the ownership lines, it can become monstrously difficult to do so. Likewise, tracing transactions (for example, to detect money laundering) can involve any arbitrarily convoluted chain of transactions among companies.
For a real life example, I saw this mentioned about the Trump Organization in the news just today (in some article regarding the hearing going on at SCOTUS today about his financial documents): The Trump Organization really consists of some 500 separate LLC companies, intertwined in some intricate way that could take an utterly heroic effort to trace one’s way through, even if all the documents are made public.
BTW, I learned some years ago in a college English class (where we were doing lessons on how to do library research), there exists a big reference book called “Who Owns Whom” or something like that.
It is a huge list of company names. You can look up company names and it tells what company owns it, and what other companies it owns. If you follow the references, you could come up with whole chains of ownership. So it’s doable and has even already been done. But if you wanted the information, you’d still need to go to the effort of flipping through this book to collect the information.
No doubt, it’s all a whole lot more computerized these days than it was back in olden times.
I have no idea how truly complete the listings are. Would such a book include only those companies who voluntarily sent in their names and ownership data? I don’t even know who compiled and published that book. But it should be available in a reference library.
Such a book would of course be out of date very soon after printing, since shares in companies are freely tradeable, and are freely traded. Shares in privately held companies change hands frequently, as well as shares in publicly-quoted companies.
And, even there, you’re only looking at the shareholding. To find out who really owns a company, you need to know not just who has legal title to the shares in the company, but what arrangements (e.g. trusts) may exist between those people and the people on whose behalf they hold the shares. A huge volume of shares are held by people who are acting as trustees for other people. These trusts are generally not registered or accessible on any public registry, and if you try to investigate the existence of these trusts or the identity of the beneficiaries, the first question you are going to be asked is “what business is this of yours”?
I think this is the point I’m trying to get to. Does everyone just accept that you own and control the company because you can prove it if needed? So where are Thore records held and what prevents them from beint tanpered with?
If I understand it correctly, you can create an LLC and refer all contact to your attorney, who filed all the paperwork creating the company for you in the first place. Unless certain circumstances apply (typically criminal cases), she can’t be compelled to reveal that you own it thanks to client privilege, and violating your trust or cheating you can get her disbarred.
I’m unclear on what they were doing on the Netflix show Ozark, but that sounds more like what you’re thinking of. A company was created with no owner of record, and the entire business was stolen when the documentation for the business fell into someone else’s hands.
In Ozark, the casino legal documents show that the Byrds are the owners. But the real owner is down south across the border. Novarro isn’t depending on legal documentation to enforce his rights and profits coming from his investment. He has other means.
I was referring to the strip club they stole from the Dixie mafia types. IIRC, they were able to take it because Marty realized the guy running the place didn’t own it, and there was no company name or listed owner. He got the paperwork and set Ruth running the place, and the body of the previous manager showed up on their dock. Been a while since I’ve seen the show, but I think that’s how it happened.
If by “everybody” you mean everybody in the whole world, no, but that’s not necessary. If by “everybody” you mean the directors and the registered shareholders, yes, they accept it, because you appointed them to do the job they are doing, and you pay them to do it, and (mostly) they are in the business of doing this for reward so they have no interest in destroying their business reputation through an almost certainly unsuccesful attempt to cheat one of their customers. There’ll be correspondence between you and them showing you engaging them to act for you, and them advising you how to achieve what you want, and your correspondence and banking records will show that you paid them for these services. This correspondence is in your files as well as theirs, so they can’t just magic it away.