Are shell companies being used in Nevada to hide criminal activities?
In April of this year one of the largest data leaks in history occurred. Documents and information, nicknamed the Panama Papers, belonging to a Panamanian based law firm, Mossack Fonesca, were released to the public. This data basically detailed how the rich, famous and royal are using shell or inactive companies for the corrupt purposes of hiding money and evading taxes. In the wake of this scandal the head of the U.S. Senate Committee on Finance has zeroed in on the State of Nevada as a state with the potential for this type of shady business to exist.
Many are drawn to incorporate in Nevada due to the privacy it affords businesses. Although they are not illegal by nature, it is suspected that some shell companies have been set up in Nevada for criminal purposes. The Senate has now asked Secretary of State, Barbara Cegavske, for information relating to her offices role in business incorporation.
Cegavske responded to the inquiry by explaining her offices limitations. She explained that while her office does incorporate businesses that they do not require them to file the names of their owners. This is not required by law and she can only request this information if it is required by law enforcement. She also noted that they do not conduct investigations into the illegal activities of business entities even though her predecessor created a task force to look into some of these issues. Although her office is committed to upholding the law, it doesn’t look like they will be involved in investigating shell companies unless a criminal investigation is launched.
If you are incorporating, you want to make sure everything is done right so that you are not accused of forming a shell company to cover up criminal activities. This is one reason why you should always consult with an attorney before filing your application with the Secretary of State. Contact a Las Vegas business planning attorney for information today.