Thursday, January 13, 2022

William Moon on Anonymous Companies

Will Moon recently posted an article forthcoming in the Duke Law Journal to SSRN.  It's a fascinating, accessible read and thoughtfully explores privacy as a functional feature of modern business entities.  Many states, Nevada included, allow the principal of a business entity to conduct business without ever disclosing the principal's identity.  Most discussions about using business entities to cloak individual identity focus on how the wealthy and powerful use privacy to avoid accountability and evade responsibility.  Yet not enough attention has been paid to the other side of the coin, how privacy enables economic activity for persons with stigmatized identities or in areas where violent retaliation against a business's disclosed principals may functionally force it to close.

A few years ago, Ann McGinley and I wrote about how some entrepreneurs will trot out persons with favored identities to access capital.  Because white men tend to raise more money, some entrepreneurs will strategically affiliate with white men to raise capital.  A proposal to create an agency for these purposes recently circulated online:


While our article dealt with deploying identity as a facade to raise capital, Moon explores how obscuring identity facilitates business operations.  He showcases different examples of how privacy enables economic activity from incubating morally contestable enterprises such as operating clinical trials for abortion drugs to evading "racialized" market biases.  The article even details how survivors of intimate-partner abuse use business entities to protect their identities while working.  

The paper is a significant contribution to an often unexplored area of business law.  Most discussions of business entities focus on asset partitioning and limited liability.  These essential features matter.  Yet for many people, privacy may also be a significant concern.  Moon's paper provides a balanced exploration of the merits and risks of allowing people to shield their identities behind business entities.

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