Leo V. Duval Attorney At Law
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Three legitimate reasons to have a shell company

Shell companies are not just for hiding illegal activities. It seems that any story picked up by the media about these legal tools focuses on their use for money laundering or other criminal wrongdoing. However, these structures have legitimate purposes.

Shell companies are legal tools that can serve a number of advantages for the savvy businessman or woman. Three of the most common reasons that an entrepreneur would use a shell company include protection, privacy and practice.

Shell companies and protection from liability

Large companies are exposed to a great deal of liability. If something were to go wrong, the entire company could fail. Instead of putting the whole business at risk, many large companies will actually be a combination of a number of smaller, shell companies. This is one business tool that may be used to mitigate the risk associated with doing business.

Shell companies and privacy

Some businesses will use shell companies to protect their privacy. These legal entities can be used to house intellectual property. In fact, one of the prime examples of legitimate shell company use comes from the story of the popular rum manufacturer Bacardi.

Essentially, the Bacardi family wanted to keep the intellectual property safe from the repercussions of political turmoil in their homeland of Cuba. To meet this need, a shell company was created that housed this information in the Bahamas. This allowed the Bacardi family to keep the information from becoming the property of the Cuban government.

Shell companies and entrepreneurial practice

Since shell companies do not generally require capital, putting together a shell company is also a common way for budding entrepreneurs to practice putting together a business.

Shell companies and allegations of criminal conduct

Unfortunately, even business owners with legitimate business interests in shell companies can face allegations of wrong doing. If these allegations lead to criminal charges it is important to take the charges seriously. Convictions can come with steep monetary fines and potential imprisonment.

Defenses are available. Contact an experienced white collar criminal defense attorney to discuss your options and better ensure your legal rights are protected.

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Leo V. Duval Attorney At Law

885 Annadale Rd | Staten Island, NY 10312 | Phone: 347-690-1777 | Fax: 718-966-5352 | Staten Island Law Office Map