Professor Moon contributes to conversation on Anonymous Companies

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Professor William Moon’s recent article contributes to the anonymous companies' conversation The latest article by Professor William Moon contributes to the discussion about anonymous companies.

Professor Moon analyzes jurisdictions that do not require the names of their owners or investors to be public knowledge in "Anonymous Companies," which was published in April 2022 by Duke Law Journal. Through this article, Moon hopes to contribute another perspective on anonymous companies that is not often discussed, thus, creating a well-rounded conversation with a balanced approach on this topic going forward.

Moon has been “thinking about this topic for a very long time” stemming from his work in private practice. The question of why a number of companies chose to form in offshore jurisdictions, such as the Cayman Islands, Bermuda, and the British Virgin Islands led to an interest in the potential benefits and pitfalls of this practice.

Based on existing research and the more recent release of the Panama Papers, Moon’s initial view on anonymous companies was negative, reflecting the popular position in favor of more transparency. Often, the cloaking of a corporation’s principal or investor’s identity is considered to be a move to hide finances or escape accountability. Although he originally believed that anonymous companies should be required to provide transparency, Moon now considers that perhaps anonymous companies fulfill a benevolent or altruistic purpose. Moon’s study fairly explores the pros and cons of allowing people to conceal their identities behind their company name.

Moon found several examples of such behavior, including concealing owners’ identities to reduce racial bias or harassment in the marketplace and launching the first abortion drug in the United States by Danco Laboratories. These companies proved difficult to research, given their anonymous nature and their owners wanting to keep it that way; however, Moon’s research team was able to find these examples through different searches, discussions with other lawyers, and engaging with the existing research on privacy.

When discussing the importance of anonymous companies, Moon notes that “intellectually, the need for privacy” affects the people willing to take on entrepreneurship. The decision to start an anonymous business may not be just about the money. Other factors may be relevant, such as the effect prejudice may play if a certain market knew the owner’s background, race, or identity. Privacy may serve as an essential function of the business.

For those reading his article, Moon hopes that they appreciate the tradeoffs present on both sides of the “anonymous companies” arguments. While some people seem “so committed to the transparency move” in recent policy decisions, he mentioned the importance of being open-minded and the need to present the “policy tradeoffs” when discussing anonymous companies.

He also does not want the conversation to end with his article. The “function of scholarship is to get the discussion ball rolling,” Moon claims, and he hopes that more people become interested in anonymous companies and then continue to contribute to both sides of the conversation.