DOCSLIB.ORG

Shell Companies

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Shell Companies SHELL COMPANIES CA SRIPRIYA KUMAR Overview SHELL COMPANIES – IMPACT ON AUDITOR WHAT ARE THEY. ECONOMY SAFEGUARDS CA Sripriya Kumar SHELL COMPANY What is a Shell Company A shell corporation is a company or corporation that exists only on paper and has no office and no employees, but may have a bank account or may hold passive investments or be the registered owner of assets – Wikipedia In the initial analysis, it has been found that 'Shell Companies' are characterised by nominal paid-up capital, high reserves and surplus on account of receipt of high share premium, investment in unlisted companies, no dividend income, high cash in hand, private companies as majority shareholders, low turnover and operating income, nominal expenses, nominal statutory payments and stock in trade, minimum fixed asset- https://www.business-standard.com/article/news- ani/analysis-of-shell-companies-reveal-extent-of-financial-irregularity-in-india- 117021001200_1.html CA Sripriya Kumar What is a Shell Company One of the key challenges has also been the lack of a definition of a Shell Company. The OECD definition is as under ”OECD defines ‘shell companies’ as a firm that is formally registered, incorporated, or otherwise legally organised in an economy but which does not conduct any operations in that economy other than in a pass-through capacity” CA Sripriya Kumar What is a Shell Company i.entities with insignificant business or assets; ii.entities set up to mainly facilitate cross-border currency and asset transfers along with transfer of large sums to related entities; iii.firms having no economic rationale in their banking transactions; iv.multiple companies having the same address; v.no physical existence at the given address; vi.high ticket transactions inconsistent with the business of the company; and vii.rotational transactions with no apparent legitimate business group https://economictimes.indiatimes.com/news/economy/policy/govt-regulators-mull- challenge-proof-definition-for-shell-companies/articleshow/64145993.cms?from=mdr CA Sripriya Kumar Low Share Capital Low or Nil Business and High Fixed Assets Operations and low P & L Share Activity Premium High Loans and More or Less Assets and High Advances Liabilities in the Balance Borrowings or Sheet Investments CA Sripriya Kumar No P & L activity, no interest received or paid, dividends Financial Statements received or paid Share Capital and possibly a huge premium Loans and Advances Trade Payables Fixed Assets Investments Loans and Advances CA Sripriya Kumar (S)HELL COMPANY CA Sripriya Kumar Entity to hold another entity’s Convenient to hold bribes as money and transactions with Current Liabilities / loans and No employees / products or pass them as investments or services loans and advances Placement , layering and final Tax Saving devices – Huge integration of funds excess share premiums untaxed until amendment to Directors are usually Sec 56 “namesake” persons with no knowledge or connection to the business Unaccounted money, Tax Loss and Money Laundering CA Sripriya Kumar The Story of Raktabhija The focus has always been on large corporate failures and monitoring large corporates, but even 50 to 100 of these Shell Companies have greater potential to damage the fabric of a clean economy that we all seek to achieve ED SFIO MCA IT SEBI Auditors GOVERNMENT INITIATIVES Taskforce on Shell Companies’ was instituted under the Ministry of Corporate Affairs (MCA) in Feb 2017 . This taskforce has attempted to address the need to define and identity shell companies ED SFIO MCA IT SEBI CA Sripriya Kumar • The Ministry of Corporate Affairs (MCA) has struck off 6.07 lakh, about a third of the total 18.28 lakh registered companies, defunct companies from the official records, as of November 30 as a part of the plan to crack down on shell or paper companies. ( Jan 2019 ) https://www.moneycontrol.com/news/business/economy/one- in-three-companies-in-india-found-defunct-struck-off-official- records-3366571.html • Preliminary lists of Shell companies – 80000+, 16000 stated to have been shared by SFIO / ED / CBDT for further actions . One such list is also circulating in the Public Domain ED SFIO MCA IT SEBI Auditors CA Sripriya Kumar • Reducing the layers of Investment Companies to 2 layers in the Government Companies Act 2013 • Director disqualification for non filing of MCA returns for 3 Initiatives consecutive years • Taxation of Excess share premium in closely held private companies by an amendment to Sec 56(2)(viib) by an amendment to Finance Act 2012 • Amendment to Sec 248 of the Companies Act 2013 on Beneficial Ownership of Shares • Restrictions on deposits – trade advances > 365 days • IT return forms for Directors and shareholders of listed companies to curb dummy directors / investors • Schedule III disclosures on Investments made by Companies CA Sripriya Kumar Government • Enhanced CARO reporting on all Loans and Advances Initiatives obtained by Companies • CARO - transactions not recorded in the books of account have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 • CARO requirement on Internal Audit , no material uncertainty exists as on the date of the audit report that company is capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date • Schedule III disclosures on Investments made by Companies CA Sripriya Kumar AUDITOR SAFEGUARDS Are Auditors taking this seriously ? 143(1) (a) whether loans and advances made by the company on the basis of Inquiries security have been properly secured and whether the terms on which they have been made are prejudicial to the interests of the company or its under members; Companies (b) whether transactions of the company which are represented merely by Act 2013 book entries are prejudicial to the interests of the company; (c) where the company not being an investment company or a banking company, whether so much of the assets of the company as consist of shares, debentures and other securities have been sold at a price less than that at which they were purchased by the company; (d) whether loans and advances made by the company have been shown as deposits; (e) whether personal expenses have been charged to revenue account; (f) where it is stated in the books and documents of the company that any shares have been allotted for cash, whether cash has actually been received in respect of such allotment, and if no cash has actually been so received, whether the position as stated in the account books and the balance sheet is correct, regular and not misleading: CA Sripriya Kumar Auditors Safeguards THE CLIENT Basic • Is the Client still Active as per the MCA records. If the client is struck Safeguards off , then how will the audit be carried out. The Company has to be restored first ? • Are the directors NOT qualified as per MCA records for non filing of financial information for consecutive years although they certify that they are indeed not disqualified THE DIRECTORS • Who are the Directors of the Company. Are they real. Do they exist. Are they aware that they are directors. Insist on meeting the Directors • Exercise caution in obtaining the certificate under Sec 164(2) of the Companies Act 2013. Insist on the certificate to be provided in writing and counter check the certificate with referenceCA to Sripriya MCA Kumar records Auditors Safeguards Basic TRANSACTIONS Safeguards • Understand and appreciate the aging of all balances including Share Capital • Confirmation of all financial Balances as well as contingent liabilities is a must. • Repeat qualifications on inability to obtain confirmation of balances may not be acceptable and should give rise to Professional Skepticism CA Sripriya Kumar SOURCES OF FUNDS Auditors Safeguards Share • Obtain a copy of the Share Purchase agreement Capital • Check once again , although it is an earlier period whether bank funds and were actually received for the Shares allotted Premium • The Share valuation should have been done and a certificate would have been issued. Obtain a copy of such certificate although it may have been an earlier period. Are the projections in line with the actual financial information • Obtain confirmation that the shares are continued to be held by the Share holder for both the share holder being a Corporate or non corporate • If the share holder is a corporate, down load all the MCA data and check if the share holder company is still active or has been struck off by MCA. See if the financial statements have been filed promptly CA Sripriya Kumar Auditors Safeguards Share • The share investment in your client should have been disclosed in Capital the Investments schedule in the financial statements and • Review all Income tax assessment orders of the client Premium • Check is any dividends have been declared. Enquire as to why some one would invest large funds without any expectation of return • Report as appropriate CA Sripriya Kumar Auditors Safeguards • Obtain a schedule of all loans and check if funds were received by the Financial Company in the first place or if the same was only book entries. Loans and • Get the aging of the loan. Advances • Get a copy of the loan agreement. If no such agreement exists, then it would raise a Red flag as to why the lender would advance funds without documentation necessary for future legal recourse • Perform all CARO procedures in relation to loans received with regard to principal and interest charged. If no interest is charged, obtain reasons therefor especially in case loan funds have been received by your client from a Corporate and such loans would have been prejudicial to the interest of the lender of such funds • Is there any violation of the Acceptance of Deposit rules – Is Sec 73 to Sec 76 of Companies Act 2013 complied.
Load more

Recommended publications
  • United States District Court for the District of Columbia
    Case 1:03-cv-02540-RCL Document 59 Filed 03/21/07 Page 1 of 25 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA ) ) Plaintiff, ) ) v. ) Civil Action No. 03-2540 (RCL) ) $6,976,934.65 PLUS INTEREST ) DEPOSITED INTO ROYAL BANK OF ) SCOTLAND INTERNATIONAL, ) ACCOUNT NUMBER 2029-56141070, ) HELD IN THE NAME OF SOULBURY ) LIMITED, AND PROPERTY TRACEABLE ) THERETO, ) ) Defendant, and ) ) SOULBURY LIMITED, ) ) Claimant ) ) __________________________________________) MEMORANDUM OPINION In this civil in rem action, the United States seeks forfeiture of nearly $7 million in defendant funds traceable to deposits in the Royal Bank of Scotland International (“RBSI”), located on the island of Guernsey.1 The funds were deposited in an RBSI account held by a British Virgin Islands company named Soulbury Limited. On December 15, 2003, the United States filed its Complaint and the Clerk of the Court issued a Warrant of Arrest In Rem for the defendant property. The funds were seized on December 17, 2003 from an interbank account held by RBSI at Harris International in New York under the authority of 18 U.S.C. § 981(k), 1Guernsey is one of the semi-autonomous Channel Islands off the British coast. Case 1:03-cv-02540-RCL Document 59 Filed 03/21/07 Page 2 of 25 which under certain circumstances authorizes the seizure of funds held in an interbank account in America if the subject bank has an interbank relationship with an overseas institution in which the defendant funds are held. Soulbury filed its claim to the funds on March 1, 2004 [4&5], an Answer on March 22, 2004 [8], and an Amended Answer on April 7, 2004 [10].
    [Show full text]
  • 18 Shell Euromillions 365% ($ 2147483647) April 5Th
    SHELL FISCAL REPORT Jan FILED BY EUROMILLIONS FRIDAY 5TH OF APRIL 2013 ESCAPED TAX Dec Feb SHELL CORP... SHELL HEAD... SHELL CORP... Netherland… SHELL LIMI... Netherland… Ireland SHELL LIMI... Netherland… 20% 40% 40% 100%0% 0% Switzerlan… SHELL LIMI... SHELL LIMI... Bermuda 20% 40% 40% 20% 40% 40% Cayman isl… SHELL LIMI... 100%0% 0% 100%0% 0% SHELL LIMI... Switzerlan… Netherland… Nov 20% 40% 40% 20% 40% 40% Mar SHELL CORP... SHELL CORP... Ireland Ireland 100%0% 0% 100%0% 0% SHELL LIMI... SHELL LIMI... Netherland… Switzerlan… 20% 40% 40% 20% 40% 40% SHELL LIMI... SHELL LIMI... Bermuda Cayman isl… 100%0% 0% 100%0% 0% SHELL LIMI... SHELL LIMI... Switzerlan… Netherland… 20% 40% 40% 20% 40% 40% SHELL CORP... SHELL CORP... Ireland Ireland 100%0% 0% TAX 100%0% 0% SHELL LIMI... SHELL LIMI... Netherland… Switzerlan… 20% 40% 40% ESCAPED 20% 40% 40% SHELL LIMI... SHELL LIMI... Bermuda Cayman isl… Oct 100%0% 0% 20% 40% 40% Apr SHELL LIMI... SHELL LIMI... Switzerlan… 365% Netherland… 20% 40% 40% 20% 40% 40% SHELL CORP... SHELL CORP... Ireland Ireland 100%0% 0% 100%0% 0% SHELL LIMI... SHELL LIMI... Netherland… Switzerlan… 20% 40% 40% 20% 40% 40% SHELL LIMI... SHELL LIMI... Bermuda Cayman isl… 100%0% 0% 100%0% 0% SHELL LIMI... SHELL LIMI... Switzerlan… Netherland… 20% 40% 40% 20% 40% 40% SHELL CORP... SHELL CORP... Ireland Ireland 20% 40% 40% 100%0% 0% SHELL LIMI... SHELL LIMI... Sep Netherland… Switzerlan… May 20% 0% 80% 20% 40% 40% SHELL LIMI... SHELL LIMI... Bermuda Cayman isl… 100%0% 0% SHELL LIMI..
    [Show full text]
  • Corporation Law
    CORPORATION LAW Leon Getz* The most significant event in the general field of corporation and secu- rities law during 1970 was the enactment of the Ontario Business Corpora- tions Act; I amendments were also made to the Canada Corporations Act, 2 though these were for the most part of lesser interest. Judicial contributions to the law were few and thoroughly unremarkable. In addition, the Ontari6 Securities Commission Merger Report 3 was published. I. ONTARIO BUSINESS CORPORATIONS ACT The new Ontario Business Corporations Act is the product of almost five years' work and reflection that began with the establishment of the Select Committee on Company Law (the Lawrence Committee) in 1965. That Committee published an interim report in 1967, 4 many of the recom- mendations of which were embodied in Bill 125, introduced in 1968, but allowed to die. 5 That Bill was re-introduced, somewhat amended, in 1970, 0 was passed in June, and proclaimed in force on January 1, 1971. One may not necessarily share the enthusiasm of former Premier Robarts, who said, on the first reading of Bill 125, that it represented "the dawn of a new era" and was a "shareholders' bill of rights and a directors' code of ethics." 7 One must nevertheless concede that it is an immensely significant piece of legislation, that is likely to have a profound effect upon legislative developments in the field within Canada, and perhaps outside. It deserves far closer attention than the fairly selective and cursory treatment of some of its more important features that will be given to it here.
    [Show full text]
  • Report on the Misuse of Corporate Vehicles for Illicit Purposes
    Behind the Corporate Veil « USING CORPORATE ENTITIES FOR ILLICIT PURPOSES Behind the Corporate entities underpin most commercial and entrepreneurial activities in market-based economies and have contributed immensely to growing prosperity worldwide over recent Corporate Veil decades. Increasingly, however, governments and regulatory bodies have realised that Behind the Corporate Veil corporate entities ranging from corporations and trusts to foundations and partnerships are USING CORPORATE ENTITIES often misused for money laundering, bribery and corruption, shielding assets from FOR ILLICIT PURPOSES creditors, tax evasion, self-dealing, market fraud, and other illicit activities. Prepared against this background, the OECD report Behind the Corporate Veil: Using Corporate Entities for Illicit Purposes opens ways to prevent and combat the misuse of corporate entities. The report shows that the types of corporate entities misused most frequently are those that provide the greatest degree of anonymity to their beneficial owners. With that in mind, the report offers governments and other relevant authorities a menu of policy options for obtaining information on the beneficial ownership and control of corporate entities in order to combat their misuse for illicit purposes. USING CORPORATE ENTITIES FOR ILLICIT PURPOSES USING CORPORATE This report was prepared by the OECD Steering Group on Corporate Governance and derestricted by the Council under the title Report on the Misuse of Corporate Vehicles for Illicit Purposes. OECD's books, periodicals and statistical databases are now available via www.SourceOECD.org, our online library. This book is available to subscribers to the following SourceOECD themes: Finance & Investment/Insurance & Pensions Governance Taxation Ask your librarian for more details of how to access OECD books online, or write to us at [email protected] www.oecd.org ISBN 92-64-19543-2 21 2001 13 1 P -:HSTCQE=V^ZYXV: © OECD, 2001.
    [Show full text]
  • Part 3. Where Does the Beneficial Owner Hide?
    Part 3. Where Does the Benefi cial Owner Hide? “Vice knows she’s ugly, so puts on her mask.” — Benjamin Franklin 3.1 Introduction Th is study revealed that, in the vast majority of grand corruption cases we analyzed, corporate vehicles—including companies, trusts, foundations, and fi ctitious entities— are misused to conceal the identities of the people involved in the corruption. Of these corporate vehicles, the company was the most frequently used. Investigators confi rmed this misuse, noting that locating information about the person who is in control of a corporate vehicle was essential to any large-scale corruption investigation, and indeed, to almost any large-scale organized-crime investigation. Despite the widespread misuse of corporate vehicles for criminal purposes (including corruption, fi nancing terrorism, money laundering, and fraud), most countries have no coherent strategy to tackle this problem. Th is chapter identifi es the types of corporate vehicles used to conceal the identity of the person involved in the corruption and other obstacles that investigators may face. An overview of each of these corporate vehicles is given in appendix C. 3.2 Corporate Vehicles: Types and Features Th is section describes the various types of corporate vehicles that have been used in grand corruption schemes. We distinguish four distinct categories: • Companies • Trusts • Foundations • Fictitious entities and unincorporated economic organizations. (Fictitious entities is an outlier category, encompassing sole proprietorships, the vari- ous forms of partnerships, and other functionally eff ective equivalents.) We provide an overview of the main characteristics of these corporate vehicles. Th eir precise nature, the ways in which they are misused for criminal ends, and the extent to which they are misused vary from jurisdiction to jurisdiction; nonetheless, our study revealed a num- ber of global similarities.
    [Show full text]
  • Sticky Defaults and Altering Rules in Corporate Law
    SMU Law Review Volume 60 Issue 2 Article 4 2007 Sticky Defaults and Altering Rules in Corporate Law Brett H. McDonnell Follow this and additional works at: https://scholar.smu.edu/smulr Recommended Citation Brett H. McDonnell, Sticky Defaults and Altering Rules in Corporate Law, 60 SMU L. REV. 383 (2007) https://scholar.smu.edu/smulr/vol60/iss2/4 This Article is brought to you for free and open access by the Law Journals at SMU Scholar. It has been accepted for inclusion in SMU Law Review by an authorized administrator of SMU Scholar. For more information, please visit http://digitalrepository.smu.edu. STICKY DEFAULTS AND ALTERING RULES IN CORPORATE LAW Brett H. McDonnell* ORPORATE law scholarship has long debated the extent to which corporate law rules are default or mandatory. It has paid less attention to corporate law's "altering rules," which prescribe what a corporation must do to legally opt out of a given default rule. Altering rules may be more or less sticky; that is, they may make it easier or harder to opt out of a given default rule. They also help allocate au- thority among corporate constituency groups. A descriptive focus on al- tering rules provides a more detailed and nuanced understanding of the contours of corporate law than the simple default/mandatory dichotomy. A normative focus on altering rules demonstrates that, in many cases, it may be desirable to make it moderately hard to opt out of some default rules. These descriptive and normative perspectives provide more regula- tory guidance and shareholder protection than a Teflon altering rule, but still leave the law more flexible than with mandatory rules.
    [Show full text]
  • Shelf Companies
    Understanding the Risks of Shell & Shelf Companies Published on Alvarez & Marsal | Management Consulting | Professional Services (https://www.alvarezandmarsal.com) July 25, 2017 The legitimacy of shell companies has been exhaustively debated due to the heightened regulatory and financial risk in the lack of ownership transparency, the ability to evade tax obligations, and the ease to conceal illegal financial activity. “A year ago… the 11.5 million leaked documents known as the Panama Papers implicated hundreds of wealthy individuals and public officials from around the globe in transferring funds to anonymously owned offshore business entities known as shell corporations. While this practice isn’t technically illegal, many clients of Mossack Fonseca, the Panamanian firm at the center of the controversy, used the anonymous accounts associated with these organizations to conduct illegal activities including tax evasion, money laundering, and dodging sanctions. One year later, it is still legal and permissible for corporations in America to be anonymously owned.” (Ferrarello, 2017) With the recent influx of concern about offshore accounts and the aforementioned Panama Papers, there is a renewed interest in shell and shelf companies. In order to understand the full scope of how both criminal and legitimate organizations use these entity structures for illicit purposes, one must first differentiate between these two corporate vehicles. The Financial Crimes Enforcement Network (FinCEN, 2016) states that shell companies ”[refer] to non-publicly traded corporations, limited liability companies (LLCs), and trusts that typically have no physical presence (other than a mailing address) and generate little to no independent economic value. Most shell companies are formed by individuals and businesses for legitimate purposes, such as to hold stock or intangible assets of another business entity or to facilitate domestic and cross- border currency and asset transfers and corporate mergers” (FinCEN, 2006).
    [Show full text]
  • Traps in the U.S. Inversion Rules for the Unwary Nonresident
    Traps in the U.S. Inversion Rules for the Unwary Nonresident Robert Ladislaw, Esq. [email protected] Inversions U.S. Government Perspective Inversion Transaction: A U.S. parent of a multinational corporate group is replaced with a foreign parent, often in a low-tax jurisdiction such as Bermuda. In addition to removing foreign operations from U.S. taxing jurisdiction, the U.S. corporation may transfer some or all of its foreign subsidiaries directly to the new foreign parent corporation. Joint Committee on Taxation, June 6, 2002. Inversions U.S. Government Perspective Examples of well-publicized inversions in the late 1990’s and early 2000’s: •Ingersoll-Rand (Bermuda/Ireland) •Tyco (Bermuda/Ireland) •Stanley Works proposed (abandoned due to threat of law change) Congress ramps up rhetoric: “In an inversion, a U.S. corporation pretends to move its headquarters to a phony shell corporation that is nothing more than a folder in a filing cabinet or a post box in a tax haven.” Senate Finance Committee Chairman Charles Grassley, May 23, 2003. Congressional Response: New IRC Sec. 7874, effective March 4, 2003 (retroactive, law passed in 2004) IRC Sec. 7874 Foreign corporation directly or indirectly acquires substantially all of the assets of a U.S. domestic corporation or domestic partnership. Stock of foreign corporation is held by former shareholders of the domestic corporation or former partners of the domestic partnership: 60% Test: Inversion gain. 80% Test: Foreign corporation is treated as domestic corporation for all U.S. tax purposes. Exception: “Expanded affiliated group” has substantial business activities in foreign country of incorporation.
    [Show full text]
  • Statementoffice of the Deputy Attorney
    STATEMENT OF JENNIFER SHASKY CALVERY SENIOR COUNSEL TO THE DEPUTY ATTORNEY GENERAL UNITED STATES DEPARTMENT OF JUSTICE BEFORE THE UNITED STATES SENATE COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS HEARING ENTITLED “EXAMINING STATE BUSINESS INCORPORATION PRACTICES: A DISCUSSION OF THE INCORPORATION TRANSPARENCY AND LAW ENFORCEMENT ASSISTANCE ACT” PRESENTED JUNE 18, 2009 Good afternoon, Chairman Lieberman, Ranking Member Collins and distinguished Members of the Committee. I am honored to appear before the Homeland Security Committee to discuss the critical need for greater transparency in corporate formation in this country. Nearly three years ago the Department testified before the Permanent Subcommittee on Investigations of the Committee on Homeland Security and Governmental Affairs about the difficulties that U.S. shell companies often pose to law enforcement efforts—and the need for improved access to beneficial ownership information of these companies. In this context, we use the term “shell company” to refer to a legal entity, established under the laws of a State, that has no independent operations or assets of its own. Unfortunately, since the Committee last examined this issue, the problem has not improved. So I am pleased that the Department has another opportunity to speak with you about this important issue and that the conversation has now moved from framing the problem to developing possible legislative solutions. The term shell company often evokes images of exotic offshore financial centers and money laundering havens. Unfortunately, some of the worst offenders are not “exotic” locales at all, but rather some of our own States. In 2006, we spoke of an unscientific internet search that we conducted using the words “shell corporation”.
    [Show full text]
  • Opinion Regarding Corporate Separateness.Pdf
    Jason H. P. Kravitt Sean T. Scott Mayer Brown LLP 71 S. Wacker Drive Chicago, IL 60606 Matthew D. Ingber Mayer Brown LLP 1675 Broadway New York, NY 10019-5820 Dear Gentlemen: You have asked for my opinion in connection with a potential settlement (the “Potential Settlement”) involving securitization trusts (the “Trusts”) for which Mayer Brown’s client, The Bank of New York Mellon (“BNY Mellon” or the “Trustee”) is trustee or indenture trustee. In particular, I have been asked to consider two legal theories (veil piercing and successor liability) under which the Trustee could potentially seek to recover money from Bank of America Corporation (“BAC”) if certain BAC subsidiaries were liable for damages to the Trusts and unable to meet their respective obligations. In particular, you have asked me to focus on certain business combination transactions between Countrywide Financial Corporation (“CFC”), Countrywide Home Loans, Inc. (“CHL”) and Countrywide Home Loans Servicing (“CHLS”) on the one hand, and BAC and its subsidiary, NB Holdings Corporation (“NB Holdings”) on the other, in 2008, and whether such transactions provide a basis for the Trustee to recover from BAC under either a veil piercing or successor liability theory. Below are my general views of how those doctrines likely would come into play. This memo describes in general terms the law of veil-piercing and successor liability in Delaware, New York and California (as described in Appendix A, any of these could apply) and describes how these laws may apply to a potential case against BAC. This does not constitute legal advice, but gives my general opinions as an academic interested in corporate law and is limited by the available factual record and certain assumptions I make.
    [Show full text]
  • Money Laundering Using Trust and Company Service Providers
    CARIBBEAN FINANCIAL ACTION TASK FORCE FINANCIAL ACTION TASK FORCE GROUPE D’ACTION FINANCIÈRE FATF Report Money Laundering Using Trust and Company Service Providers October 2010 THE FINANCIAL ACTION TASK FORCE (FATF) The Financial Action Task Force (FATF) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering and terrorist financing. Recommendations issued by the FATF define criminal justice and regulatory measures that should be implemented to counter this problem. These Recommendations also include international co-operation and preventive measures to be taken by financial institutions and others such as casinos, real estate dealers, lawyers and accountants. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard. For more information about the FATF, please visit the website: WWW.FATF-GAFI.ORG THE CARIBBEAN FINANCIAL ACTION TASK FORCE The Financial Action Task Force (FATF) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering and terrorist financing. Recommendations issued by the FATF define criminal justice and regulatory measures that should be implemented to counter this problem. These Recommendations also include international co-operation and preventive measures to be taken by financial institutions and others such as casinos, real estate dealers, lawyers and accountants. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard. For more information about the CFATF, please visit the website: WWW.FATF-GAFI.ORG © 2010 FATF/OECD and CFATF. All rights reserved. No reproduction or translation of this publication may be made without prior written permission.
    [Show full text]
  • Loan Out, Personal Service, Shell Corporation Insurance Application
    APPLICATION for: Loan Out Corporation, Personal Service Corporation, Shell Corporation Notice: The Policy for which this Application is made, subject to its terms, applies only to any Claim (as applicable in the Coverage Section for which Application is made) made against any of the Insureds during the Policy Period. The Limit of Liability available to pay damages or settlements shall be reduced and may be exhausted by amounts incurred as Costs, Charges and Expenses (as defined in the Coverage Section for which Application is made), and Costs, Charges and Expenses shall be applied to the retentions. Submission of this Application does not guarantee coverage. General Instructions for completing this Application: 1. The Application must be signed by an executive officer. 2. This Application and all exhibits shall be used for purposes of this coverage only. 3. The terms as used herein shall have the meanings as defined in the Policy. SECTION I. GENERAL INFORMATION 1. Policy Number (if applicable): Name of Applicant: Address: City, State, Zip: Phone No.: Fax No.: Email: SECTION II. PROGRAM DEFINITION Program Definition: This program is designed for individual members of the entertainment industry who have achieved a degree of commercial success which dictates that they incorporate for business conduct purposes. They purchase commercial insurance because they have created a legal corporate entity. Risks that fit this program include; actors, directors, producers, writers, cameramen, singers, musicians, composers, radio/TV broadcasters, athletes, coaches and trainers etc. 2. Describe the applicable fields: 3. List the professional credits of this applicant (i.e., titles of last movies worked on; significant past performances; titles and success of last recordings; major awards received or nominated for; reasons for commercial success, etc.): 4.
    [Show full text]