Wyoming's corporation mills manufacture privileged artificial "people" to order

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43 Responses to “Wyoming's corporation mills manufacture privileged artificial "people" to order”

  1. Anonymous says:

    Could other states sue Wyoming for sheltering taxes that would otherwise be due to the states where these corporations do business? For example, could other states put a lien on federal dollars due Wyoming?

  2. Anonymous says:

    The constitution needs an admendment clearly stating that organizations and corporations are not indiviuals and do not have individual rights.

  3. Neon Tooth says:

    From the article:

    “A corporation is a legal person created by state statute that can be used as a fall guy, a servant, a good friend or a decoy,” the company’s website boasts. “A person you control… yet cannot be held accountable for its actions. Imagine the possibilities!”

  4. -DK says:

    This article piqued my interest, as I live in Wyoming. As I read it, I wished I had the corporate psyche that would give me a leg-up so I could properly comment on this posting. But all I can say is “Holy crap! that address is 10 houses away from me!”. (’cause it is).

  5. Allen Garvin says:

    Does it really matter whether you call corporations “persons” or “legal entities”? As far as I know, every country in the world recognizes the basic concept of corporate personhood, though the name varies somewhat. In the US, the body of common law and statutory law overwhelmingly uses the term “person”, and unless inapplicable or specifically saying otherwise, applies to both natural and legal persons.

    As legal persons, corporations (a very broad term, encompassing far more than just for-profit businesses) can, in their own name, enter into contracts, own property, sue or be sued, employ people. It’s hard to see how any economy beyond a basic agricultural-based one could exist without a recognition of groups as legal persons.

    There are some objections to legal persons holding constitutional rights, but would we better off if any government, local, state or federal, could arbitrarily seize the property of any group without having to obtain a warrant, and without having to provide compensation to either bond-holders or share-holders?

  6. billstewart says:

    This is hardly a new thing, except perhaps in Wyoming. The Company Corporation has been helping people start corporations in Delaware since the 1890s, and there are lots of legitimate reasons that a business would want to be a corporation rather than a personal business or a partnership.

    For instance, the standard limited-liability corporation means you can invest in a company and only risk the value of your stock, not everything you own. Because it’s safer for investors, that means that somebody who wants to start a company can raise funds by selling stock, and can do businesses and create jobs in ways they couldn’t if they were limited to loans or bonds.

    As with almost anything, there are unethical people who might find it useful to hide behind, and I did once track a spammer to a mailbox address in Greenville Delaware, which told me not to bother suing them because their entire corporate assets would be pieces of paper in a folder.

  7. Anonymous says:

    Shelf companies are the stock in trade of law firms everywhere, at least in Canada. When a client has a deal in the works and a tight deadline, you don’t want to hold up the entire works arguing over what to call the holding company that will get the shares/assets, or trying to find directors for it. No, you structure the deal, your lawyers take one of the 50 or 100 companies they have previously incorporated JUST FOR THIS PURPOSE, assigns the only shares to their client and you finish the deal. No one but no one cares that 4983987 BC Ltd. (or whatever) sat on a shelf for years before being pressed into service- no one cares about that company at all. Honestly, I am having a lot of trouble understanding why this is noteworthy at all, let alone deserving of this breathless conspiratorial news treatment. If this company is selling customers that they can buy a lack of accountability or liability, they (and their clients) are idiots because that ain’t how it works.

  8. Anonymous says:

    Well, craplice. Never have seen the old home state here on BB before, and now it’s there for shadiness. Son, I am disappoint. In Wyoming, not BB.

  9. Neon Tooth says:

    An interesting article on how behemoths like Google use elaborate financial schemes to rob citizens of billions of dollars:

    http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html

  10. ultranaut says:

    If you can’t beat them, join them:

    1) Automate the incorporation process as much as possible and then let it loose on the world.

    2) Automate the shell games you can play with corporate ownership as much as possible and let it loose on all the corporations generated by your automated incorporation process.

    Eventually artificial “people” will outnumber real people in an insane legal chaos that only a supercomputer can make sense of.

  11. D.R.W. says:

    Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.
    Benito Mussolini

  12. Anonymous says:

    If a corporation can be a person, what about the other way around? Can my family be a corporation? We could start our own business of course, but what about the extreme case: (1) we could rent/purchase office space and move in regardless of zoning laws; (2) my salary and my spouse’s salary could be our income; (3) our kids private school expenses be tax-deductible training costs; (4) failure of my kids to get into an Ivy league school an investment loss; (5) the family car is a deductible expense; (6) etc. Hey lawyers! Let’s get creative!

  13. Rayonic says:

    My first instinct is to outlaw shell companies, but such a law would be difficult to write/enforce. Not to mention dangerous to individual rights if done poorly. (Remember that “Net Neutrality” bill that the EFF came out against?)

    A better solution would be to make criminal charges stick to all participants in a shell company if said company was set up to break the law.

    So if you’re a “director” or “CEO” of a shell company that aids in real estate fraud? Congrats, you’re a co-conspirator.

    The bonus of this approach is that, potentially, existing laws may already apply.

    • Skep says:

      “A better solution would be to make criminal charges stick to all participants in a shell company if said company was set up to break the law.”

      Not really helpful since *hiding* criminal activity is what they can do, thus a law that doesn’t help us reveal who owns such corporations is going to help much.

      We should just make corporations subject to regulations like domain names with a little extra. All owners of private corporations get special breaks from the government in the form of corporate personhood, so it is reasonable for their to be a cost: all the owners of corporations should be publicly listed, for free, on the web, not like those Delaware corporations where even if the owners are listed you have to pay the state of Delaware an exorbitant fee to find out who they are.

  14. Anonymous says:

    Wouldn’t it be great if Artists and Makers could setup cheap shell companies and absolve themselves of all personal liability for their art/creations they way that shareholders of corporations do?

  15. juepucta says:

    This sort of article brings me down. Horribly.

    Not because of what’s reported, that i already knew for the most part. That doesn’t take away form the great investigative reporting done.

    No, i hate this sort of article because i read the comments. And i realize that conservatives (in the US, UK, Canada, the old atavistic left in LatAm, etc) are progressively getting worse and worse.

    Read that comment thread and tremble, because those are the morons that will put a republican in the White House, if not in 2012, in 2016.

    (and immediately enact some BS laws that will only make things worse, but by the time everything comes back to bite them in the ass, the time delay makes it hard for their stunted brains to connect the situation they are in with who they voted for… aaaaand repeat…)

    -G.

    • Micah says:

      No, i hate this sort of article because i read the comments. And i realize that conservatives (in the US, UK, Canada, the old atavistic left in LatAm, etc) are progressively getting worse and worse.

      Forgive me if I’m being dense, but which are the “conservatives”? The ones defending corporations or the ones saying they should be eliminated? Neither position seems to be a hallmark of left or right. Anti-corporation sentiment seems to run in lots of different circles including Marxists, anarchists and some Tea Party types. And the defenders of the corporation seem to hail from a broad spectrum in the middle of those extremes, including both non-radical liberals and pro-business conservatives.

  16. Matt Drew says:

    And our response to this situation is supposed to be … criticize the corporations, entities created by and for the government, and suggest adding more government protection to them in the form of more “regulations” like the ones that let BP off the hook in the Gulf and enshrined “too big to fail” bailouts into law? Or, alternatively, give the government free rein to paw through all business’ private records at will, or impose even more paperwork on companies who are currently struggling to survive, have done nothing wrong, and are only organized as corporations because they don’t know any better or have no other alternatives?

    I’m not seeing either of those as productive suggestions for resolving the issue of corporate abuse and privileges.

    • Neon Tooth says:

      It seems to work in countries that aren’t as much deregulated plutocracies as this one. But yes, “poor corporations………”

    • Palomino says:

      “I’m not seeing either of those as productive suggestions for resolving the issue of corporate abuse and privileges.”

      Then what would YOU suggest? To many like you criticize w/o offering alternative suggestions or possible solutions. Please consider not commenting w/o offering other ideas. Your idea that someone else’s idea is flawed creates wasted space. Keep it to yourself unless you have constructive alternatives to share.

    • Skep says:

      “? Or, alternatively, give the government free rein to paw through all business’ private records at will, or impose even more paperwork on companies who are currently struggling to survive, have done nothing wrong, and are only organized as corporations because they don’t know any better or have no other alternatives?”

      Hybperbolize much?

      Oh, the horrible burden of having to report who actually owns a corporation–why, that would take a corporation, um, literally minutes do to. How awful. How will poor, poor corporations ever survive such and unreasonable burden? And the mere thought of the government pawing through such detailed information as **who owns a company**–why it just gives me the vapors. It makes me clutch my pearls just thinking about it…

      :-p

      Reporting who owns a corporation is trivial to do, and it isn’t some sort of trade secret. Get over yourself.

      • oasisob1 says:

        ‘clutch my pearls’ just sounds dirty.

      • Micah says:

        I’m a corporate lawyer and you’re wrong on several levels.

        First, it’s not always easy to determine who owns a corporation. Public companies, for example, usually have no idea who their shareholders are aside from the biggest ones, who have to comply with SEC filing requirements. And many private companies have complex ownership arrangements involving options, preferences, promotes, profits interests and other structures that help motivate the people involved to do a good job, but are very difficult to describe in a brief yet meaningful way. As I type this, I’m taking a break from a 60+ page agreement that governs the ownership arrangement between just two owners of a newly formed limited liability company.

        Second, there are legitimate reasons why owners might prefer to be quiet about their role. You might want to open a small business, for example, and not want everybody to know that your unpopular rich uncle gave you most of the start up capital in exchange for 50% ownership. Or you might not want your daughter’s potential suitors to be able to look up her daddy’s assets before deciding whether to date her.

        Third, ownership already DOES get reported to the government through tax returns. A corporation that distributes dividends, or a partnership that passes through profits and losses, has to report them to the IRS so the IRS can make sure the shareholders pay tax on the income and/or properly deduct the losses. That information isn’t generally available to the public, but can sometimes be obtained by subpoena where justified.

        • travtastic says:

          You might want to open a small business, for example, and not want everybody to know that your unpopular rich uncle gave you most of the start up capital in exchange for 50% ownership.

          Ethically speaking, how is that even remotely legitimate?

          • Micah says:

            There are situations (such as where the uncle is a truly bad guy–a criminal, a supporter of terrorists, etc.) where I see your point. But there are other situations where I find it hard to see an ethical argument for mandatory disclosure of ownership. The uncle’s lack of popularity might stem from perfectly legit but unpopular political activism (say, vocal support for one political party in a town that heavily leans the other way). Or maybe his race/religion/sexuality/other identity is the source of his unpopularity.

            Or the uncle himself might not want everyone to know how big an ownership stake he demanded so he can preserve his ability to negotiate different deals in the future or not upset other family members who feel he is favoring this particular nephew by helping him go into business.

          • travtastic says:

            Any of these possibilities are basically arguing to decrease the amount of information available to consumers. The only time I can remotely see this as ethical is in some kind of discriminatory situation. In any other case, how is it different than say, a corporation telling its employees to vote a certain way, contrary to what their PR claims they support?

            And let’s be honest, we’re not actually talking about your run-of-the-mill uncle here who’s well-off. If that was the case, loopholes would be closed; that’s not enough money for the money to talk.

  17. Anonymous says:

    Come on people, apply a little basic skepticism to what you read. It’s already perfectly possible to “pierce the corporate veil” in criminal cases like you’re describing. Our lawmakers, prosecutors, and judges are not complete idiots.

    Corporations are just groups of people, people hide stuff and lie. All the newspaper did was find a place where someone is helping people do that.

  18. JonStewartMill says:

    Corporate personhood is doing more to destroy this country than anything else.

    • jimh says:

      Amen. The 1886 landmark decision by Morrison Waite is probably the greatest mistake ever made in the history of the US Supreme Court.
      We can’t really blame corporations for taking advantage of the ruling, because corporations (people) essentially take advantage in this game wherever they can. Don’t hate the player, hate the game.

      We need to either undo the decision, or introduce culpability for the actions of corporation extending to the employees of those corporations and their shareholders. We also need to look seriously at limiting the abilities of corporations who as persons can cross boundaries with impunity, creating the international shell game as we have it today.

    • Bevatron Repairman says:

      Legal personhood, destroying America since 1819! Man it’s been downhill since then!

  19. Cowicide says:

    “A person you control… yet cannot be held accountable for its actions. Imagine the possibilities!”

    Another fine example of conservative self-responsibility in action.

  20. Anonymous says:

    dont worry everyone, the teabaggers and constitution and founding father fetishizing republicans will save us.

  21. mn_camera says:

    If corporations are “people” can we please begin executing them?

    • jimh says:

      Actually, it’s not a bad idea. Revoking corporate charters is a possibility under the law. It’s rarely done. As you can imagine, an Attorney General who sought revocation for even a small multinational would come under huge political pressure, so it’s not hard to see why someone would not want to take up such a position.

    • travtastic says:

      Legally, their operational charters can be revoked, at least at the state level.

      So technically, yes, we could.

  22. zyodei says:

    I’m going to come out and say that for anyone who believes in property rights, the rule of law, and a functioning free market – the elimination of the entity called ‘corporation’ should be a top priority.

    • Micah says:

      I’m going to come out and say that for anyone who believes in property rights, the rule of law, and a functioning free market – the elimination of the entity called ‘corporation’ should be a top priority.

      Assuming you’re not proposing we all return to subsistence farming and individual crafts, we need some sort of organization or arrangement for people to work together. Individuals or families aren’t going to be able to run the internet, build automobiles, produce or distribute energy, etc. So what kind of organization would you propose as an alternative to the corporation?

  23. Anonymous says:

    Matt Drew has the key phrase here

    “entities created by and for the government”

    Government and business have always been one and the same. That is, if you’ve read any history, you’ll see that the wealthy and powerful ( aka businesses, corporations, plutocrats, etc. ) have BEEN the government since day one. It comes as no surprise then that the rules are made for them, because they are made BY them.

    Small business and Ye Olde Independent Shopkeeper are the ones that are actually bound by the rules, as at that level you aren’t really a worthy player( read: rich and powerful enough ). The rest of us are just serfs and always will be ( although we are at a better level of such, relative to the old days. But so to, the powerful are far more so than they were then as well ).

    Simply put, honesty, altruism, fairness, and all that stuff is not a virtue in most people. And the higher one climbs, the less those virtues are, even if there to begin with.

    The sad truth is, people suck. And you’ll never get enough of the average ones to act in any collective interest.

  24. UncaScrooge says:

    This is an international problem, a global problem. You may eradicate stateside tax havens, but the money will simply flow to another secret bank.

    The existence of these sort of tax havens are to a great deal responsible for the general drying up of government tax bases internationally and the misdirection of charitible funds sent to the third world.

    The problem is way beyond simple finger-pointing at two-party ideologies in America.

    Part of the solution is simply letting people know that these sort of shenanigans are going on all the time. And that many big corporations are in bed with the Mafia and drug lords in keeping these tax havens functional and profitable.

    The next time a corporation complains that they are excessively taxed here in America and that they can take their business elsewhere, well, here is part of the reason. Conservatives and Liberals alike should meet these claims with torches and pitchforks.

    • Anonymous says:

      Population densities tell the tale:
      Rank Country people/square kilometer
      1 Macau 18 500
      2 Monaco 17 000
      3 Singapore 7 000
      4 Hong Kong 6 000

      9 Bangladesh 1 100

      We think of Bangladesh as being a place where people are crammed in. And it is, despite being a reasonably-sized country.

      Official residents of Macau and Monaco are mostly rich people who don’t set foot in the country more than once a year, if that.

      Ironically, their bribes to establish residency and accountant and legal fees are probably not cheap, but certainly cheaper than paying their legitimate taxes.

  25. Micah says:

    What’s the big deal here? There are plenty of service companies out there that will help you form a legal entity (corporation, LLC, partnership, whatever) and will serve as the new company’s registered agent, furnish independent directors, etc. It sounds like this is a small time operator who caters to a sketchier clientele than most, but it’s a completely legitimate business.

    Take BoingBoing. Happy Mutants LLC, the Delaware limited liability company that owns BoingBoing according to the footer of every page on this site, lists a service company called Incorporating Services, Ltd. as its registered agent in Delaware. Delaware doesn’t require or publish any additional information about limited liability companies formed or qualified there, and I can’t find any disclosures on boingboing.net as to the ownership or control of Happy Mutants LLC (although last year’s Fast Company article provided a lot of details).

    There are lots of reasons to use a service company–they know the forms really well, you don’t have to worry about changing the address if somebody gets fired or dies, and, yes, privacy. There are of course people out there who try to abuse the system to hide nefarious activities. But there are many, many more legitimate businesses who derive significant legal and economic benefits from having a corporate form, and service companies make “doing it right” a lot easier for all those legit businesses.

  26. yrarbil cilbup says:

    Rescind all corporate charters now and forever. The US founding fathers knew what they were doing is kicking big corporation East India Tea Company out of the country and prohibiting any of its ilk from popping up again here.

    Too bad A Lincoln, while he was presiding over the genocide of native Americans, also fattened his wallet by taking bribes to grant corporations super citizenship, at a cost of our democracy and his paltry legacy of shame.

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