Brassplate Company - Explained
What is a Brassplate Company?
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What is a Brassplate Company?
A brass plate company refers to a company listed on a nameplate of brass but has no real existence. This type of company is legal but its tangible existence is only from it being listed on a nameplate, brass plate. The brass plate is often hung outside the registered office or address of the company. In many cases, professional service firms, accounting and legal firms associate with brass plate companies. They sometimes rent their street addresses as registered offices for brass plate companies.
How does a Breastplate Company Work?
A legally constituted company that has no real existence or any connection with the state but whose only 'tangible' existence is based on the fact that it is listed on the brass nameplate is a brass plate company. In the European Union, brass plate companies are legitimate companies that have existence in the jurisdiction of incorporation they have the nameplate. A letterbox company is not the same as a brass plate company, although they share some similarities. Letterbox companies trade with general public from their location or registered address while brassplate companies just use legal addresses which they necessarily don't operate from. Both are however different from shell companies, although, a shell company can be a brass company.
Controls on Brassplate Companies
ECJ rulings regard brass plate companies add acceptable legally constituted companies in the EU. Offshore tax havens are largely associated with the term brass plate companies but this term is also used in the media to describe unscrupulous activities such as money laundering, trafficking and others. Onshore firms often avoid any relation with brass plate companies so as not to loss their reputation or be tagged as corporate tax havens. Stronger tax rules is one of the measures through which the spread of brass plate companies is regulated. The criteria for regulating brass plate companies include:
- Having the required number of local tax residents as part of board of Directors
- A company must be audited by a professional firm in the justification
- All records of the company are kept in the jurisdiction.
- Decisions pertaining to the company are made at board meetings held in the jurisdiction.
Examples of Brassplate Companies
Some companies use brass plate techniques for undesirable activities. High-ranking individuals, reputable companies, trusts and others used brass plate cover up affairs involving nefarious and undesirable activities using brass plate. Apple Sales International (ASI) in Ireland, and Orphan SPVs are examples of entities that used brass plate structure for illegal activities. Panama Papers reflected numerous companies and individuals that used brass plate, basically for tax evasion purposes. Apple Sales International (ASI) for instance was accused by the EU Commission for violating the EU State Aid Rules through non-payment of taxes. Orphan SPVs also used brass plate for tax evasion, shadow banking, and others.
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