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Types of the US company registration fraud through examples

Though it is easier to set up business in the States, than in other countries, many things depend on competence, reputation, and reliability or a registered agent. Fraudsters and shady agents often make use of client’s unawareness on different stages of business establishment in the US and intentionally provide low-quality service or deceive the client.

In this article, we share with you some situations our clients experienced before consulting us.

Californian company registration fraud

One of our clients had established a company in California and had been paying a maintenance fee for 3 years to an agent, based in his hometown outside the US. When the owner started to doubt the agent, he addressed us to review his company status. We checked if the company is in the good standing and figured out that the firm hadn't been paying taxes and reporting in the US on both the state and federal level.

So, the local agent-fraudster received money from the client for the establishment of the corporation in California, registered it and was charging the client for maintenance, but paying and reposting nothing to the authorities. It is a must to pay a minimum tax of 800 dollars per year to keep a company in California. And the agent took service tax plus 800 dollars annually during 3 years, rendering no service. In the result, the client had to restore the firm, pay for our company services 2400 dollars of underpaid taxes added, fines and late fees.

Cheap company establishment under one registration number

Even the worse situation is when agents register one company of instance in Delaware or Nevada, make color copies of documents and sell them to 20 clients at a reduced price. They get 20 clients with minimal prices and expenses, but with that 20 companies run their businesses under the same registration number, leading to great legal risks, and you definitely don’t want to experience that. How can it be controlled? Unfortunately, it can’t be. Be aware if the registration company operates for half a year to year, it does not have reputation and experience, and has no lawyers working for them; there is a risk to get in a similar situation.

Opening an account in the US bank for non-resident

When fraudulent registration companies open banking accounts in the US for non-residents, they put their employee as a custodian of the account. Then there are two scenarios. First one – an open fraud, when a considerable sum is transferred to the account a custodian withdraws money and disappears. The second one – that deserves special attention – legal effects caused by custodian actions.

Let us assume a situation when an employee of the agent-company opened an account for you or your firm and appoint himself a custodian. You might know that the employee runs your account. You may trust him and the company and think that nothing will happen. But then, let us say, this manager gets in a road accident in a car and kills a person. What happens next? Next, lawyers start a case and find the account, which he runs and assets on it. The first thing a layer will seize your account through legal action. And then try to prove the person is just a manager of the agent-company, but not the real account owner and has no deal with that money. It will take you many years if you succeed to prove trust at all. If you open an account in the US, only you or your employee should be a custodian, but not employees of the agent, rendering you corporate services.

An American citizen as a nominee director

Usually, a nominee director is appointed to keep your name off the public records. How does it work? Let us say you are a business person from Russia unwilling that competitors or maybe fiscal authorities on a rivals tip get to know you own a business in California. You want to avoid some legal effects in the native country and address us. We recommend you a nominee director who will become an owner or a director for public records. So that if your competitors start looking you up by surname, they won’t find anything.

However, some unfair agents promote their managers, generally the US citizens or residents as nominee directors or owners. But it may lead to an extremely unfavorable situation because accordingly to American laws an American, on the whole, cannot act as a nominee dictor, as he stands under the law. If to compare legislation of Cyprus, Panama and other countries with the American one, the difference between nominee director requirements is huge.  That's why if you are offered an American or a permanent resident of the US as a nominee director, be aware. Even if he steals nothing from you, you may easily have serious legal problems.

How to start the US business and not be deceived

If you indent to establish a company or buy a business in the US, invest money or built partnership on the US territory, contact American Corporate Services, Inc. We will help you to check partners and a business you invest in, using all available opportunities for your benefit.

We will also assist to register, maintain and lead your business, open an account at the US bank, provide legal advice and solution for your business aims.