Bringing a client to court: can I stay anonymous? I.e. not disclose my identity?

[PermanentLook]

I operate a US LLC, which offers me complete privacy as it does not have a public register. Currently, only three parties are aware of my identity: my incorporation agent, the US government, and my bank.

Now, I find myself needing to take legal action against a party (hereinafter referred to as "the Defendant") and bring them to court in a EU country.

I'm seeking a way to maintain anonymity. I require a nominee service for shareholding and directorship outside the EU to minimize disclosure of my identity. My concern is potential intimidation tactics from the defendant. I do not want him to know who I am.

Further details:

There are two essential documents I require:

Signing a power of attorney to a lawyer to represent me in court. This document will become part of the legal proceedings and thus will be public. Needs to be notarized and apostilled.

Signing a UBO declaration for my lawyer, as they are legally obligated to verify the UBO ["There is no such a thing like a nominee UBO". Fine. I'm ready to tell a white lie here].

My aim is to disclose as little information as possible to as few parties as possible. Ideally, even the lawyer representing me in court should not know my identity, not even in confidence, let alone the judge.

Additionally, I prefer that all parties aware of my identity reside outside of the EU, and I would like to avoid the UK and Switzerland due to their proximity to the EU.

(I want to emphasize that this is not related to tax evasion. My bank is aware of my identity, and I intend to fulfill all tax obligations to the last cent.)

Therefore, my question is: where can I find a professional nominee service for both shareholding and directorship that operates outside of the EU? I am willing to pay for this service and would prefer to avoid homeless people.

Any advice on how to proceed would be appreciated.

If you are considering referring me to the Mentor Group Gold, a link to a specific relevant post would be much appreciated.

Thank you.

 

[Sols]

Where are you going to sue this person? Ask your lawyers in that jurisdiction how/if you can sue there without disclosing or legal methods to limit disclosure. If you have different venues to choose from, check your options in each one.

Companies can sue other people but in so doing, you may be required to disclose the directors or authorized representatives of the company. You can likely appoint a nominee (lawyer) for that but they are duty bound to know on whose behalf they act. So you're just kicking the can down the road a little. And it's an uphill road, so that can will come rolling back down.

Depending on where the court matter takes place, you may be subject to a discovery process (or similar) during which both sides must provide all requested information that's relevant to the case. If the other party requests information about the authorized representatives, directors, and UBOs of the LLC, then you risk losing the case if you don't provide the information, unless you can convince the judge is irrelevant.

So a lot depends on avenue, how good your opponent is, and what you're suing them for.

You mention you want to sue in the EU and while not all EU is the same, the EU AML Directives apply quite uniformly and would require a nominee to know and be able to disclose on whose behalf they act.

What you're looking for doesn't sound like what's commonly called a nominee. You're looking for someone to help you commit fraud and possibly other crimes such as lying to a court. That person risks heavy sanctions ranging from financial penalties to prison time.

 

[PermanentLook]

Dear Sol,

that is such a great answer: thanks!

I definitely didn't anticipate how risky that was.

I cannot do any "jurisdiction shopping" as the exclusive jurisdiction is clearly stated in the contract.

The UBO rule is the usual 25%+1. If no shareholder has 25%+1 of the votes or dividends, then the UBO can be considered the director or authorized representative.

I only see two ways out of this. One involves truly getting 3 partners in my company, firing me as manager and appointing a nominee who is bound to act strictly by shareholders resolution. That would allow me to legally conceal my identity, respecting the UBO rule by the book. It would also mean to give away 75% of the profits, and it's convoluted, and involves too many people.

But there's another one that I thought about while reading your message, that looks really charming to me. The contract I have with the Defendant is transferable.

That means that another company, let's call it Company B, incorporated for the purpose by a professional trustee, can receive the contract and sue in my stead.

I would (truly and legally) have no shareholding rights and no decision power in Company B. My company will remain a third party in court, and as such will not have to reveal the UBO to the lawyer. Ideally, not even the trustee will know my identity.

As for the discovery process, the Defendant can ask, but I hardly see how he can demonstrate that the UBOs of a third party are relevant to the judgement.

At the same time, while having no specific shareholding or directorship in Company B, a private contract between my company and company B would entitle me to an x% of the profits, should the judge rule in my favor.

Do you believe this would address the problems you rightfully pointed out in your post?

Still, the question remains and becomes even bigger: now I don't need a nominee, I need a trustee

What would be the best jurisdictions to look into, to find suitable ones for the purpose?

 

[Sols]

The UBO rule is the usual 25%+1. If no shareholder has 25%+1 of the votes or dividends, then the UBO can be considered the director or authorized representative.

Says who? The EU is moving forward with UBO at 5% or 15%. Even so, the owners beyond UBO may still require to be disclosed in case of a discovery process.

See New EU measures against money laundering and terrorist financing | News | European Parliament

MEPs agreed that beneficial ownership means having 15% plus one share, or voting rights, or other direct or indirect ownership interest, or 5% plus one share in the extractive industry or a company exposed to a higher risk of money laundering or terrorist financing.

I only see two ways out of this. One involves truly getting 3 partners in my company, firing me as manager and appointing a nominee who is bound to act strictly by shareholders resolution. That would allow me to legally conceal my identity, respecting the UBO rule by the book. It would also mean to give away 75% of the profits, and it's convoluted, and involves too many people.

Assuming your opponent is competent, the discovery process may reveal your timely departure. Appointing a nominee (in the traditional sense) won't change anything as the nominee isn't going to risk getting countersued for your benefit. They will buckle under the slightest pressure.

But there's another one that I thought about while reading your message, that looks really charming to me. The contract I have with the Defendant is transferable.

That means that another company, let's call it Company B, incorporated for the purpose by a professional trustee, can receive the contract and sue in my stead.

I would (truly and legally) have no shareholding rights and no decision power in Company B. My company will remain a third party in court, and as such will not have to reveal the UBO to the lawyer. Ideally, not even the trustee will know my identity.

Some points from the before would still be relevant: a traditional nominee might buckle and the discovery process may show a very convenient transfer of ownership.

Can the party transferred to sue over actions taken by the Defendant prior to the transfer? What does applicable law say about it?

Do you believe this would address the problems you rightfully pointed out in your post?

I say this with no ill intent, but I think you might be underestimating the gravity of the situation and oversimplifying the processes and procedures that follow.

Discovery can be brutal. You may be required to hand over copies of all emails, messages, phone logs, and documents involved in the business or activities the lawsuit is about. Failure to comply with discovery can be grounds to have the case thrown out.

If the courts think you're playing tricks, they're not going to appreciate that.

Still, the question remains and becomes even bigger: now I don't need a nominee, I need a trustee

You need a good lawyer for starters. I'm not saying your plan is impossible. Just manage your expectations. Speak with a lawyer. You can speak with one lawyer about the idea in general and then another lawyer to actually go ahead with the litigation.

Look at at critically, not enthusiastically. Courts are (supposed to be) neutral and interested in facts only.

You're a judge sitting on a case where Company A is suing Person B. Just before the lawsuit, Company A changed owners, but it's suing Person B for things that happened before the sale. If Person B caused damages to Company A, why did the new owners of Company A still proceed with acquiring Company A? Are they actually OK with the damages? Did the former owners not tell Company A about this pending/planned litigation? Why aren't the new owners suing the old owners as well? The ownership change is very strangely timed. And why did Company A go from being owned by a pretty simple structure of owner(s) to now being an opaque structure involving foreign jurisdictions and trustees?

What would be the best jurisdictions to look into, to find suitable ones for the purpose?

If you're suing someone in for example Dutch courts, you have to bring a case that the Dutch courts have jurisdiction over and is compliant with Dutch law. If Dutch law prohibits anonymous lawsuits, you'd be shooting yourself in the foot by hiding your US LLC behind a Nevis LLC owned by a Cook Islands trust, managed by a trustee based in Panama.

TL;DR: Speak with lawyers who understand the intricacies of the relevant jurisdictions and laws. Manage your expectations.

 

[blockchain4ever]

From New EU measures against money laundering and terrorist financing | News | European Parliament

MEPs agreed that beneficial ownership means having 15% plus one share, or voting rights, or other direct or indirect ownership interest, or 5% plus one share in the extractive industry or a company exposed to a higher risk of money laundering or terrorist financing.

What is "the extractive industry or a company exposed to a higher risk of money laundering or terrorist financing"?

 

[Sols]

What is "the extractive industry or a company exposed to a higher risk of money laundering or terrorist financing"?

"Extractive industry" speaks for itself: it's things like mining for minerals and precious stones, drilling for oil/gas, and so on.

Companies "exposed to a higher risk of money laundering or terrorist financing" is a vague term meant to capture companies incorporated in high risk jurisdictions (as defined in EU's lists) and/or companies in certain industries such as financial services, gambling, real estate, accounting/legal services, and many others.

 

[daniels27]

Just one question. Who signed the contract with the client?

 

[Don]

Says who? The EU is moving forward with UBO at 5% or 15%. Even so, the owners beyond UBO may still require to be disclosed in case of a discovery process.

See New EU measures against money laundering and

Recent MEP-s agreement is not so bad as the one you quoted from last year, but only percentage wise.

Deal on a single rulebook against money laundering and terrorist financing | News | European Parliament

On Thursday, MEPs struck a deal with the Council on the last part of the new anti-money laundering package, including new provisions for football clubs.

www.europarl.europa.eu

Negotiators also agreed that beneficial ownership means having at least 25% of shares, or voting rights, or other direct or indirect ownership interest, calculated at every level of the value chain, as well as control or indirect control of an entity.

 

[ShillGates]

sell your legal claim to a third party - a third party you setup for this purpose perhaps