Anonymous Companies

66 Pages Posted: 10 Jan 2022 Last revised: 1 Jun 2022

See all articles by William J. Moon

William J. Moon

University of Maryland Francis King Carey School of Law

Date Written: January 7, 2022


Hardly a day goes by without hearing about nefarious activities facilitated by anonymous "shell" companies. Often described as menaces to the financial system, the creation of business entities with no real operations in sun-drenched offshore jurisdictions offering "zero percent" tax rates remains in vogue among business titans, pop stars, multimillionaires, and royals. The trending headlines and academic accounts, however, have paid insufficient attention to the legal uses of anonymous companies that are both ubiquitous and almost infinite in their variations.

This Article identifies privacy as a functional feature of modern business entities by documenting the hidden virtues of anonymous companies—business enterprises whose owners are practically untraceable to the general public. Anonymous companies were essential to launch the first abortion drug in the United States at a time when no pharmaceutical company was willing to touch it for fear of backlash by anti-abortion activists. Anonymous companies today serve as "race-neutral" public faces of Black entrepreneurs who conceal their race in order to more equitably compete in a marketplace infected with systemic racism. And anonymous companies are ubiquitous over the internet, enabling survivors of intimate partner violence to become financially self-sufficient entrepreneurs without fear of harassment or stalking.

This Article thus reveals privacy as a prevalent, yet under-theorized function served by modern business entities. In documenting their use in today’s commercial life, this Article makes two contributions to the literature. First, it disrupts prevailing accounts concerning the function of business entities, departing from scholarly accounts that predominantly conceptualize business entities as transactional cost-reducing devices that facilitate the pooling of capital for business ventures. This Article enriches these accounts by showing how protecting the identity of capital contributors from forced public disclosure—what it refers to as identity shielding—can advance important economic and humanistic interests. While the doctrine of limited liability encourages entrepreneurial risk-taking by limiting the amount of capital risk borne by the firm's equity owners, identity shielding encourages the flow of capital to business enterprises by preserving the business owner's ability to control knowledge about oneself to the world. Second, it develops a policy framework that enables a more nuanced discussion balancing the interest in ameliorating the harm inflicted by anonymity, as well as harnessing the promise of identity shielding in promoting entrepreneurial risk-taking and human collaboration.

Keywords: Identity shielding, limited liability, entity shielding, corporate law, LLCs, jurisdictional competition, disclosure, shell companies, anonymous companies, beneficial ownership, business organizations, conflict of laws, private international law, corporate charter competition, Delaware, offshore

Suggested Citation

Moon, William J., Anonymous Companies (January 7, 2022). 71 Duke Law Journal 1425 (2022), U of Maryland Legal Studies Research Paper No. 2022-01, Available at SSRN:

William J. Moon (Contact Author)

University of Maryland Francis King Carey School of Law ( email )

500 W. Baltimore Street
Baltimore, MD 21201-1
United States

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